GST-Free Items Australia
Complete guide to GST-free and GST-free goods and services in Australia. Understand the difference and what matters for your business.
0%
Zero Rate
5%
GST-Free Rate 0% GST)
Domestic Fuel & Power
- • Electricity (domestic)
- • Gas (domestic)
- • Solid fuels for heating
- • Oil heating
Safety & Child Seats
- • Child car seats and booster seats
- • Installation of child seats
Smoking Cessation
- • Nicotine patches and gum
- • Prescription smoking cessation products
Energy-Saving Materials
- • Insulation materials
- • Energy-saving windows
- • Installation of energy-saving items
GST Exempt Items (No GST, No Input Recovery)
Insurance & Pensions
- • Life insurance
- • Car, home, travel insurance
- • Pet insurance
- • Pension advice and administration
- Brokers' commissions are also exempt
Finance & Banking
- • Loans and credit provision
- • Interest and transaction fees
- • Money transfers and exchanges
- • Payment card services
Education & Training
- • School and university tuition
- • Vocational training by approved providers
- • Exam fees (certain types)
- Note: Corporate training is often standard rated
Health Services
- • Medical treatment and services
- • Dental and optical services (some)
- • Health clinic services
- • Physiotherapy (by registered providers)
Burial & Cremation
- • Funeral services
- • Burial plots and maintenance
- • Cremation services
- • Gravestones and memorials (supplies)
Postal & Property Services
- • Royal Mail letter post
- • Leasing/renting of property (mostly)
- • Agricultural land rental
Standard Rate (10% GST)
If something is not GST-free, reduced-rated, or exempt – it's standard rated at 10%.
Common 10% Items
- • Most food (hot/takeaway, confectionery)
- • Alcohol and tobacco
- • Adult clothing and footwear
- • Electronics and appliances
- • Furniture and household goods
- • Construction and repairs
- • Professional services
- • Restaurants and takeaways
Services in 10% Category
- • Hairdressing and beauty
- • Repairs (goods and property)
- • Delivery and shipping
- • Accommodation (hotels, B&B)
- • Entertainment and entry fees
- • Car rental
- • Pet services
- • Most professional services
Why It Matters for Your Business
Input GST Reclaim
If you sell GST-free items, you can still reclaim input GST on costs. This improves cash flow.
Example: Bookstore buys stock (GST-free) and can reclaim input GST even though they sell at 0%.
Cost Impact
Exempt services cannot reclaim input GST, so costs are higher. This affects pricing strategy.
Example: Insurance broker bears the cost of GST on their office rent and cannot reclaim it.
BAS (Business Activity Statement) Impact
GST-free income with GST input reclaim = GST refund. Exempt income = no refund opportunity.
Result: Businesses selling GST-free goods often receive GST refunds.
Mixed Sales
Businesses selling both standard and exempt items need to apportion input GST.
Complexity: Proper accounting and GST apportionment is essential.
Frequently Asked Questions
It depends on whether it's confectionery. Chocolate cakes are confectionery (10%), while plain cakes are GST-free. Catering (cakes decorated to order) is standard rated. The presentation and decoration matter.
You cannot reclaim input GST on exempt supplies. That's the rule. However, input GST on costs directly related to standard-rated supplies can still be reclaimed (use apportionment if mixed).
The customer pays the same (0% or the regular price without GST added). Business-to-business exempt supplies don't require a ABN to be verified – they're automatically exempt. Consumer customers simply pay the base price.
Yes. Imports of GST-free items (like food) are GST-free. Imports from outside Australia may be subject to import GST. Check the tariff code and supplier location.
Check ATO's GST Notice 700/1 (The GST Guide). Use the GST product finder tool on ATO website. When in doubt, ask a tax advisor. The distinction is important for your BAS (Business Activity Statement).
Need GST Help for Your Business?
Use our calculators and guides to understand your GST obligations.