When do I need to apply GST?

[Advice from my accountant]

GST on foods

GST on delivery fees (not straight-forward).

  • If delivery of goods to a customer is part of the supply to the customer, and delivery is not a separate fee, GST is charged in accordance with what is being delivered. In your case, that would mean that most (if not all) food is fresh produce and free of GST. The ATO calls this a “supply of delivered goods”.
  • If a separate fee is charged for delivery to the customer, the GST application becomes more variable. The ATO views it as follows:
  • if the business only sells via a delivered method without pickup available, a separate delivery charge has GST in proportion to the GST-inclusive value of goods that are being delivered e.g. If 75% of the total price of the goods is GST-free and 25% of the total price has GST included, then only 25% of the delivery charge will attract GST. To calculate this, add GST to the items that have GST charged against them before calculating the proportions. [NB. Not sure OFN set-up handles this case yet]
  • if the business offers delivery as an additional way clients can obtain the goods, delivery is an extra service and the delivery fee has GST charged at 10%. If you don’t charge GST, then 1/11th of the delivery fee will still be payable to the ATO on the BAS, regardless of any items being delivered being GST free.

If any other services are added to a sale (in any of the above situations), they may attract GST as a service separate to the sale of fresh produce.