Question 1

What is GST classification?

Accepted Answer

GST classification determines whether a good or service is taxable (10% GST applies), GST-free (0% GST, but you can still claim input tax credits), or input-taxed (no GST charged and no input tax credits). The classification is based on Division 38 of the GST Act 1999 and various ATO rulings.

Question 2

What is the difference between GST-free and input-taxed?

Accepted Answer

Both GST-free and input-taxed supplies have no GST charged to the buyer. The key difference is that for GST-free supplies, the seller can claim input tax credits on related business expenses, while for input-taxed supplies (like financial services and residential rent), the seller cannot claim input tax credits.

Question 3

What are common GST classification mistakes?

Accepted Answer

The most common mistakes involve food classification — fresh food is GST-free but prepared/ready-to-eat food is taxable. Hot takeaway food is always taxable. Other frequent errors include assuming all health services are GST-free (cosmetic procedures are taxable) and confusing new residential property (taxable) with existing residential (input-taxed).

Question 4

How do I check if my product or service is taxable?

Accepted Answer

Use the search tool above to find your specific item. You can search by name, category, or keyword. Each result shows the GST status, applicable ATO ruling reference, examples, and known exceptions. For borderline cases, consult the referenced ATO ruling or seek professional advice.

Question 5

What if my sale includes both taxable and GST-free items?

Accepted Answer

This is called a mixed supply. You need to apportion the price between the taxable and GST-free components and charge GST only on the taxable portion. For example, a hamper containing both basic food (GST-free) and confectionery (taxable) requires apportionment. Use our Invoice GST Calculator to handle mixed supplies on a single invoice.

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