GST-Free Items in Australia: Complete List

What GST-free actually means

In Australia, most goods and services include 10% GST. However, some supplies are classified as GST-free under Division 38 of A New Tax System (Goods and Services Tax) Act 1999.

A GST-free supply means no GST is included in the price — the customer pays only the base price. The business selling it does not collect or remit GST on that sale.

Critically, businesses making GST-free supplies can still claim input tax credits for the GST they pay on related business purchases. This distinguishes GST-free from input-taxed supplies, where no credits are available.

Division 38 contains 20 subdivisions (38-A through 38-T), each covering a different category. This guide covers every category with practical examples.

Food (Subdivision 38-A)

The default position under section 38-2 is that food for human consumption is GST-free, unless it falls into one of the specific exclusions in Schedule 1 of the GST Act. This is the opposite of most other categories — food starts GST-free and only becomes taxable if it matches an exclusion.

GST-free food

Food that includes GST (Schedule 1 exclusions)

Schedule 1 of the GST Act specifically lists categories of food that are not GST-free, even though they are food for human consumption:

Tricky food items

The GST classification of some food items depends on how they are marketed, served, or prepared:

• Sushi — cold sushi from a takeaway shop is GST-free; hot sushi is taxable
• Muesli bars — a plain muesli bar may be GST-free, but a chocolate-coated muesli bar is confectionery (taxable)
• Bread rolls — GST-free from a bakery or supermarket; taxable if served as part of a restaurant meal
• Plain popcorn kernels — GST-free; flavoured or pre-popped popcorn is a snack (taxable)
• Bottled water — plain still water is GST-free; flavoured or carbonated water is taxable
• Infant formula — GST-free if marketed for children up to 12 months; formula for children 12 months and over is taxable (clarified by GSTD 2026/1, transitional compliance through 30 June 2026)

Health and medical services (Subdivision 38-B)

Health is one of the largest GST-free categories. The rules are spread across sections 38-7 to 38-60, covering medical services, other health services, hospital treatment, aged care, disability support, drugs, medical aids, and private health insurance.

Medical services (section 38-7)

A medical service is GST-free if a Medicare benefit is payable for it, or if it is supplied by (or on behalf of) a medical practitioner and is generally accepted as necessary for appropriate treatment. The supply must be made to the patient directly.

Other health services — 21 listed professions (section 38-10)

Services by the following registered health professionals are GST-free when they provide "appropriate treatment" — using professional skills to preserve, restore, or improve physical or psychological wellbeing:

The practitioner must be registered, accredited, or licensed in their profession. If no registration scheme exists, they must be a member of a relevant professional association.

Drugs and medicinal preparations (section 38-50)

GST-free categories of medications include:

• Prescription-only drugs — Schedules 4 and 8 of the SUSMP (Standard for the Uniform Scheduling of Medicines and Poisons)
• PBS medications — Pharmaceutical Benefits Scheme drugs supplied on prescription
• Pharmacist-only medicines — Schedule 2 SUSMP (can only be supplied by a pharmacist)
• RPBS drugs — Repatriation Pharmaceutical Benefits Scheme drugs for veterans

Over-the-counter vitamins and general supplements are not GST-free unless they are prescription-only.

Medical aids and appliances (section 38-45)

Items listed in Schedule 3 of the GST Act are GST-free if specifically designed for people with an illness or disability and not widely used by people without one. Examples: wheelchairs, hearing aids, prosthetic limbs, insulin pumps, blood glucose monitors, colostomy bags, walking frames, and crutches.

Other GST-free health supplies

• Hospital treatment — GST-free
• Residential aged care — GST-free under the Aged Care Act 1997
• Home care packages — GST-free
• NDIS disability support — GST-free under section 38-38
• Private health insurance — GST-free under section 38-55

Education (Subdivision 38-C)

Education is GST-free under sections 38-85 to 38-110. The scope covers the course itself plus related supplies like materials, excursions, and accommodation.

GST-free education courses

• Pre-school, primary, and secondary education
• University and tertiary courses at accredited institutions
• Vocational education and training (accredited courses under state/territory law)
• Adult and community education courses that are likely to add to employment-related skills
• English language courses for overseas students
• Recognition of prior learning assessments

What is included in a GST-free education supply

• Tuition fees
• Course materials — textbooks and handouts provided as part of the course
• Excursions and field trips that are part of the curriculum
• Boarding school accommodation
• Lease of curriculum-related goods

Education that includes GST

• Hobby and recreational courses — not likely to add to employment skills (e.g., pottery for fun, recreational cooking classes)
• Goods sold separately — textbooks sold outside a course, school uniforms
• Non-curriculum supplies — school canteen food, stationery sold at a school bookshop
• Professional development seminars that are not accredited

Childcare (Subdivision 38-D)

Childcare services approved under family assistance law are GST-free under sections 38-145 to 38-155. This includes:

• Long day care
• Family day care
• Outside school hours care (before and after school, vacation care)
• In-home care
• Occasional care

Supplies directly related to GST-free childcare — such as meals and activities provided as part of the childcare service — are also GST-free. Childcare that is not approved under family assistance law can still be GST-free if it meets specified conditions under section 38-150.

Exports (Subdivision 38-E)

Exports are GST-free to prevent double taxation (the importing country typically applies its own consumption tax). This is a fundamental design principle of GST systems worldwide.

Exports of goods (section 38-185)

Goods exported from Australia are GST-free if they leave Australia within 60 days of the earlier of receiving payment or issuing an invoice. If the 60-day deadline is missed, GST applies retrospectively.

Services and intangibles (section 38-190)

Services supplied for consumption outside Australia are generally GST-free. Key tests apply around where the service is "effectively used or enjoyed." Updated guidance in GSTR 2025/1 and GSTR 2025/2 (replacing earlier rulings) clarifies the rules for supplies to non-residents.

Other GST-free export-related supplies

• Lease of goods for use outside Australia
• Tooling used by non-residents to manufacture goods for export
• Repairs of goods under warranty (for export)

Water and sewerage (Subdivision 38-I)

Essential water and sewerage services are GST-free under sections 38-285 to 38-295.

• Water supply — GST-free unless supplied in containers with a capacity of less than 100 litres. Mains water and bulk tank supply are GST-free. If transport is bundled contractually with water supply, the entire supply remains GST-free.
• Sewerage — accepting and treating sewage at treatment plants is GST-free. Removal of waste from residential premises not connected to sewers is also GST-free. Standalone collection/transport services without treatment are not GST-free.
• Drainage — storm water drainage and septic tank emptying are GST-free.

Going concerns (Subdivision 38-J)

The sale of a business as a going concern can be GST-free under section 38-325. This is commonly used in business sales and commercial property transactions. All five conditions must be met:

1. The supply is for consideration (not a gift)
2. The buyer is registered for GST, or required to be registered
3. Both parties agree in writing that the supply is of a going concern
4. The seller supplies all things necessary for continued operation of the enterprise
5. The seller carries on the enterprise until the day of supply (settlement date)

If any condition is not met, the supply is not GST-free and the standard GST rules apply. This commonly catches sellers who wind down operations before settlement or fail to get the written agreement in place.

Other GST-free categories

Division 38 includes several additional categories. While individually smaller, they are important for the businesses and individuals they affect.

Religious services (Subdivision 38-F)

Supplies of religious services by a religious institution are GST-free if the service is integral to the practice of that religion. This covers worship services, spiritual counselling by clergy, and religious ceremonies (baptisms, religious weddings, funeral rites). Commercial activities by religious organisations — bookshop sales, hall hire, cafe operations — are not GST-free.

Charitable activities (Subdivision 38-G)

• Supplies by charities and gift-deductible entities for nominal consideration (significantly below market value)
• Supplies of second-hand goods donated to charities
• Supplies of retirement village accommodation

Farm land (Subdivision 38-O)

The supply of farm land is GST-free if the farming business has been carried on for at least 5 years before the sale and the buyer intends to continue farming. The land must have the essential characteristics of farm land with farming as the predominant activity.

International transport (Subdivision 38-K)

International freight transport (from a place of export in Australia to a destination outside Australia, or vice versa) is GST-free. International passenger transport (flights and voyages) is also GST-free.

Other subdivisions

• Precious metals (38-L) — first supply after refining, when supplied by a refiner to a dealer for investment
• Inwards duty free shops (38-M) — supplies through duty free on arrival
• Government grants of land (38-N)
• Cars for disabled people (38-P) — specially modified vehicles
• International mail (38-Q)
• Telecommunications — global roaming (38-R)
• Eligible emissions units (38-S) — carbon credits
• Inbound intangible consumer supplies (38-T)

GST-free vs input-taxed supplies

Both GST-free and input-taxed supplies mean the customer pays no GST. The difference — which is critical for businesses — is whether you can claim input tax credits.

Common input-taxed supplies

• Residential rent — landlords cannot claim GST credits on rental property expenses
• Financial services — bank fees, loan interest, insurance premiums (most)
• Sale of existing residential premises — no GST, no credits (new residential premises are taxable)
• Precious metals — subsequent supplies after the first post-refining supply

Common GST classification mistakes

These are the errors the ATO sees most often — and the ones most likely to trigger a review or adjustment:

1. Assuming all food is GST-free — snacks, confectionery, biscuits, prepared meals, and hot takeaway food all include GST. Businesses in food service need to classify each item individually.
2. Charging GST on GST-free health services — if you are a registered health professional providing appropriate treatment to a patient, your services are GST-free. Some practitioners incorrectly add GST to all invoices.
3. Confusing GST-free with input-taxed — claiming input tax credits on expenses related to input-taxed supplies (like residential rental properties) is incorrect and will be adjusted by the ATO.
4. Missing the 60-day export deadline — if goods are not exported within 60 days, the supply becomes taxable retrospectively.
5. Failing to meet going concern conditions — all five conditions must be satisfied. The written agreement is often forgotten, and sellers sometimes wind down before settlement.
6. Not apportioning mixed supplies — if a single invoice includes both GST-free and taxable items (common in food businesses and education), GST must be calculated on the taxable portion only.
7. Incorrect BAS reporting of GST-free sales — GST-free sales go in G1 but not 1A. Input-taxed sales are excluded from G1 entirely.

Quick reference: all GST-free categories