As an experiment, it is worth taking a look at your next grocery receipt to discover the items that are GST applicable or exempt. The GST has been in place in Australia since 2000; it is a goods and services tax, therefore items that are considered to be ‘luxury’ or non-essential incur an additional tax cost. When an item has GST applied the supermarket receipt has an asterisk * beside it.
However GST does not apply to items that are considered ‘essential’. These include bread, cereal, milk, eggs, meats, fruits and vegetables, fish, water, fruit juices, infant food and many ingredients required to prepare meals or products from first principles (flour, sugar, cheese, spreads/ oils, sauces etc). See full list of foods below.
Essentially, by choosing foods in as close to their raw or natural state, we are staying within a naturally healthy eating pattern and we are able to save money by avoiding the 10% GST. Natural foods with their fibre and protein also make us feel full and naturally limit our kilojoule intake.
Or another way of looking at it is that the GST is a marker for calorie dense food i.e. processed food. Processed or convenience foods are known for containing high amounts of fat, kilojoules, salt , artificial flavourings, preservatives and other additives. Take away food, restaurant meals and alcohol are all processed foodstuffs, are calorie dense and we can be sure that they are much higher in kilojoules. If fact an average restaurant meal has 2,200 kilojoules of energy more than an average home prepared meal.
There are exceptions to this simple guide. All breakfast cereals are GST exempt whether natural as in oats or high in sugar content such as the commercial brands. This exemption was made during public debate when the GST was imposed in 2000. We would be better off if that exemption had not been granted.
Another tip to approach the supermarket can be to do most of your shopping around the outside aisles – in doing this, you would spend most of your time in the fruit and vegetable, breads and cereals and meat/ dairy sections thereby choosing the healthier foods and avoiding the GST mark-ups.
For further information, see the Australian Tax Office’s GST food guide.
GST-Free and Taxable Food Items
GST-free food
GST does not apply to items that are considered ‘essential’. The following foods are GST-free:
- fruit, vegetables, fish and soup (fresh, frozen, dried, canned or packaged)
- bread and bread rolls without a sweet coating (such as icing) or filling
- all meats for human consumption (except prepared meals or savoury snacks)
- cooking ingredients, such as flour, sugar, pre-mixes and cake mixes
- fats and oils for cooking
- unflavoured milk, cream, cheese and eggs
- spices, sauces and condiments
- bottled drinking water, fruit or vegetable juice (of at least 90% by volume)
- tea and coffee (unless ready-to-drink)
- baby food and infant formula
- spreads for bread (such as honey, jam and peanut butter)
- breakfast cereals.
Taxable food
The GST is applied to food items that are considered ‘luxury’ or non- essential items. These include items that have been pre-prepared by a third party (i.e. take away or restaurant foods) or have undergone a degree of processing. The following foods are taxable:
- bakery products such as cakes, pastries, pies, sausage rolls (but not including bread and bread rolls)
- biscuits, crispbreads, crackers, cookies, pretzels, cones and wafers
- savoury snacks, confectionery, ice-cream and similar products
- carbonated and flavoured beverages (including flavoured milk, flavoured water and sports drinks) unless 100% fruit or vegetable juice
- all food and beverages sold in restaurants or for consumption on the premises
hot food (takeaway) - food marketed as prepared meals and some prepared food, including platters
- any food not for human consumption
- pet food or any food labelled or specified for animals.
Source: ATO GST Food Guide
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