Is There GST on Food in Australia?

Most basic food in Australia is GST-free. Bread, fresh fruit, vegetables, raw meat, eggs, milk, rice, flour, canned fish — none of these attract the 10% GST. But the moment food is prepared, heated, or sold for eating on the spot, GST kicks in. So is there GST on food in Australia? It depends on the type. A raw chicken breast from the butcher? GST-free. A hot rotisserie chicken from the same shop? That’s taxed.

The rules come from Schedule 1 of the GST Act, and the ATO maintains a detailed food list that spells out exactly which items fall on each side. If you want a broader view of everything that’s exempt beyond just food — health, education, exports, and more — we cover that in our complete guide to GST-free items in Australia.

This post breaks down the food rules specifically: what’s free, what’s taxed, and the grey areas that trip up small businesses and consumers every day.

The Basic Rule: Unprocessed Food Is GST-Free

The starting position under Australian GST law is straightforward: food for human consumption is GST-free. That’s the default. It only becomes taxable if it falls into one of the categories listed in Schedule 1 of the GST Act.

So anything you’d find in the fresh section of a supermarket — raw vegetables, fruit, uncooked meat, seafood, eggs — carries zero GST. Same goes for pantry staples: flour, sugar, rice, pasta, cooking oil, spices, dried lentils, canned tomatoes, frozen peas.

Dairy follows the same logic. Plain milk, cream, butter, cheese, and unflavoured yoghurt are all GST-free. Plain bottled water — still, non-carbonated, no additives — is also GST-free.

Tea, coffee, and cocoa powder sold as dry goods for home preparation? GST-free. Spreads like jam, peanut butter, and honey? GST-free.

The pattern is clear: if you’re buying ingredients and making something yourself at home, the ATO doesn’t tax it.

What Food IS Taxed at 10% GST

This is where it gets interesting — and where most of the confusion lives. The ATO lists specific categories of food that ARE taxable, and they cover more than you’d expect.

Restaurant and dine-in meals. Any food or drink consumed on the premises where it’s sold attracts GST. Doesn’t matter if the food itself would normally be GST-free — the moment you sit down and eat it at a café, restaurant, pub, or food court, it’s taxed. A bread roll from the supermarket shelf is GST-free. The same bread roll served with butter at a café? GST applies.

Hot takeaway food. Anything heated above the surrounding air temperature and sold for takeaway is taxable. A hot meat pie from the bakery, a kebab, fish and chips, a hot coffee — all taxed. There’s one exception worth knowing: food that happens to still be warm because it was freshly baked (like a loaf of bread straight from the oven) is GST-free, as long as it doesn’t fall into another taxable category.

Prepared meals. Food marketed as a ready-to-eat meal — think frozen dinners, pre-made salads in sealed containers labelled as meals, and meal kits marketed as complete dishes — attracts GST. Soup is the one exception here. Canned or packaged soup is GST-free, even though it’s technically a prepared food. The ATO carved out soup specifically.

Confectionery. Chocolate, lollies, chewing gum, and anything marketed as confectionery or as an ingredient for making confectionery is taxable. Cocoa powder marketed for confectionery use? Taxed. Cocoa powder marketed as a drinking chocolate? GST-free. Same product, different marketing — different GST treatment. That quirk catches a lot of business owners off guard.

Snack foods. Potato chips, corn chips, pretzels, pork crackling, savoury snacks, muesli bars, health food bars, and sports bars are all taxable. Salted, roasted, or flavoured nuts and seeds also attract GST — though plain, raw, unsalted nuts are GST-free.

Biscuits and bakery items. Biscuits, crackers, cookies, crispbreads, wafers, cakes, pastries, pies, sausage rolls, and sweet bread rolls (with icing or sweet filling) are all taxable. Plain bread and bread rolls without sweet coating or filling stay GST-free. A glaze on a bread roll doesn’t count as a sweet coating, so glazed rolls are still GST-free. But add icing, and it crosses the line.

Ice cream. Ice cream, gelato, frozen yoghurt, ice cream cakes, and flavoured ice blocks are taxable — whether they’re sold frozen or not.

Carbonated and flavoured drinks. Soft drinks, energy drinks, flavoured milk, flavoured water, sparkling water, and sports drinks all attract GST. Fruit juice is only GST-free if it contains at least 90% juice by volume and is non-carbonated. Drop below 90% juice content, or add carbonation, and GST applies.

The Grey Areas That Catch People Out

The ATO rules sound logical until you start hitting the edges. Here are the real-world scenarios that trip up small business owners, café operators, and even accountants.

Sushi rolls. A pack of sushi from Woolworths, sold cold and sealed in the fridge section? Generally GST-free if it’s not marketed as a prepared meal. The same sushi made fresh and handed to you at a sushi train restaurant? Taxed — because it’s consumed on premises.

Smoothies and juices. A bottle of cold-pressed juice with 90%+ fruit content, sold off-the-shelf in a bottle? GST-free. The same juice blended fresh at a juice bar and handed to you? Taxed, because it’s prepared on the spot for immediate consumption.

Protein bars vs muesli bars. Both are taxable. Doesn’t matter how “healthy” the marketing is — the ATO classifies health food bars, sports bars, and muesli bars as snack foods under Schedule 1.

Vitamins and supplements. Nutritional supplements in capsule, tablet, or caplet form are taxable. The ATO doesn’t consider them food for human consumption. Protein powder, however, sits in a different spot — its GST treatment depends on how it’s marketed. If it’s marketed as a food ingredient (like adding it to smoothies), it may be GST-free. If it’s marketed as a nutritional supplement, it’s taxed.

Infant formula. Stages 1 and 2 (marketed for babies up to 12 months) are GST-free. Stages 3 and 4 (marketed for toddlers 12 months and over) are taxable. The ATO clarified this in GSTD 2026/1.

Platters. A cheese platter, antipasto board, or fruit arrangement sold as a ready-to-serve platter is taxable — even if every individual item on it would be GST-free when sold separately. The “platter” presentation and packaging is what pushes it into the taxable category.

Bread from a bakery. Fresh bread sold warm because it just came out of the oven is GST-free — the warmth is incidental. But a heated bread roll sold at a café as part of a meal, or a toasted sandwich, is taxable because it’s been deliberately heated for consumption.

How This Affects Your Business

If you run a café, food truck, bakery, or any business that sells a mix of GST-free and taxable food, you’ll need to classify every item correctly on your BAS. Getting it wrong means either overcharging customers or underpaying the ATO — both create problems.

For businesses with GST turnover under $2 million that sell mixed taxable and GST-free food, the ATO offers Simplified Accounting Methods (SAMs). These let you estimate your GST split using formulas instead of classifying every single item individually. It’s worth asking your BAS agent or accountant about.

When you’re ready to work out the GST on a specific price, use our GST calculator — enter any amount and it’ll show you the GST component instantly. And if you need to understand the formulas behind the calculation, our guide to calculating GST walks through every method step by step.

Quick Reference: GST-Free vs Taxable Food

GST-Free (0% GST):
Fresh fruit, vegetables, raw meat, seafood, eggs, plain milk, cream, cheese, butter, bread (no sweet filling or coating), flour, sugar, rice, pasta, cooking oil, spices, canned and frozen vegetables, canned fish, soup, plain bottled water, tea, coffee, cocoa (for drinking), fruit juice (90%+ juice, non-carbonated), infant formula stages 1–2, baby food, spreads (jam, peanut butter, honey), dried fruit (not crystallised or glacé).

Taxable (10% GST):
Restaurant and dine-in meals, hot takeaway food, confectionery, chocolate, lollies, chips, savoury snacks, biscuits, crackers, cakes, pastries, pies, sausage rolls, ice cream, muesli bars, flavoured milk, soft drinks, energy drinks, sports drinks, carbonated water, flavoured water, prepared meals (except soup), platters, infant formula stages 3–4, pet food, nutritional supplements (capsules/tablets), food consumed on premises.

Frequently Asked Questions

Is bread GST-free in Australia?

Plain bread and bread rolls without a sweet filling or sweet coating are GST-free. Bread with icing is taxable, but a glaze doesn’t count as a sweet coating. Freshly baked bread that’s still warm from the oven is also GST-free — the warmth is incidental, not deliberate heating. Bread served at a restaurant or café is taxable because it’s consumed on premises.

Is milk GST-free in Australia?

Plain, unflavoured milk is GST-free. Flavoured milk — chocolate, strawberry, iced coffee — is taxable because the ATO treats it as a flavoured beverage rather than basic food. Cream, cheese, butter, and unflavoured yoghurt are also GST-free.

Is there GST on takeaway food?

It depends. Hot takeaway food is always taxable — pies, fish and chips, hot coffee, kebabs. Cold takeaway food that isn’t a prepared meal can be GST-free. A cold sandwich from a servo fridge? Likely GST-free if it’s not marketed as a meal. A hot chicken burger handed over the counter? Taxed.

Is bottled water GST-free?

Plain still water with no additives is GST-free. Sparkling water, flavoured water, and carbonated water are all taxable. Water served at a restaurant as part of a meal is also taxable because it’s consumed on premises.

Why is a rotisserie chicken taxed but raw chicken isn’t?

Raw chicken is basic food for preparation at home — GST-free. A rotisserie chicken has been heated above the surrounding air temperature for consumption, making it hot takeaway food under the ATO rules. That’s taxable at 10%.

Is fruit juice GST-free?

Only if it’s non-carbonated and contains at least 90% juice by volume. Drop below 90% juice content, or add carbonation, and GST applies. A cold-pressed 100% orange juice from the supermarket shelf is GST-free. An orange-flavoured fizzy drink with 50% juice is taxed.

Are vitamins and supplements taxed?

Yes. Nutritional supplements in capsule, tablet, or caplet form are taxable. The ATO doesn’t classify them as food for human consumption. This applies to vitamins, minerals, fish oil capsules, and similar products.

Is there GST on coffee?

Coffee beans, ground coffee, and instant coffee sold as dry goods for home preparation are GST-free. A hot coffee bought at a café is taxable — it’s a hot beverage sold for immediate consumption.