GST on Gourmet Food in Australia: A General Guide for Online Sellers

Every example and amount on this page is illustrative. It shows the method and is not a benchmark, a quote or advice.

How GST applies to gourmet food sales

GST is a tax of 10% on most goods, services and other items sold or consumed in Australia. A business registered for GST collects the GST portion, one-eleventh of the sale price, from taxable sales and reports it to the ATO. GST registration is required once GST turnover is $75,000 or more; business.gov.au says you must register within 21 days of knowing you will exceed that threshold (Source: business.gov.au (Australian Government)).

For a gourmet food store, the key question is the GST treatment of each sale, not simply whether the product is marketed as gourmet. Taxable, GST-free and input-taxed sales have different reporting and credit consequences. Product classification can depend on the precise item, sale arrangement and other facts, so do not apply a broad category assumption without checking the applicable rules.

Low value imported goods have a customs value of A$1,000 or less. GST applies to most retail sales of these goods to Australian consumers.

What the tax does to your price

GST changes the amount paid at checkout, but it is not the seller’s revenue. For illustration only, if a customer pays $55 for a gourmet food order, the GST component is $5 because GST is one-eleventh of the sale price. Assuming no eligible GST credits, the seller would remit $5 to the ATO and record $50 as sales revenue, not $55.

The seller’s margin is calculated from revenue after separating GST. If the product cost is $30, gross profit is $20 ($50 revenue − $30 product cost), and gross margin is 40% ($20 ÷ $50). Treating the full $55 checkout amount as revenue would understate the margin to 36.4% and make the tax look like profit. Gross profit also is not the final amount retained: payment fees, fulfilment, wages, advertising and other operating costs still reduce net profit. Use the product pricing calculator to test the customer price, GST component, revenue and margin together.

Inclusive and exclusive prices

A GST-inclusive price is the amount the customer pays at checkout. It is usually the clearest format for consumer-facing gourmet food prices. A GST-exclusive price shows the selling price before GST and is useful for trade, wholesale or business quotes, provided the quote states that GST will be added. The Australian Government describes GST as 10% and says registered businesses collect the GST portion from the sale price (Source: business.gov.au (Australian Government)).

For illustration only, a jar listed at $44 including GST has an ex-GST selling price of $40 and $4 GST. The $44 is the customer’s payable price; $40 is the sale value before GST; and $4 is the amount collected for GST. If you set a $40 ex-GST price, adding 10% produces a $44 inclusive price. Use the product pricing calculator to check both views before publishing prices (Source: business.gov.au (Australian Government)).

Read the margin calculation carefully

Read the calculation from dollars first, then percentages. Suppose the customer pays $55 for a gourmet food order. The GST component is $5, leaving $50 as sales revenue before costs. If the product cost is $22 and payment, marketplace or shipping fees total $6, the amount left is $22. That is the dollar profit in this simplified example, not every percentage shown beside it.

Check the margin basis before comparing results. Product margin uses revenue less product cost: ($50 − $22) ÷ $50 = 56%. A margin after the listed fees is ($50 − $22 − $6) ÷ $50 = 44%. If someone divides the $22 remaining by the customer’s $55 checkout price, the result is 40%, which is a margin on the GST-inclusive selling price. It answers a different question.

The selling price tells you what the customer paid; the GST line identifies the amount collected for the tax obligation; product cost tests gross economics; and fees show what the transaction consumed. Use product margin when reviewing item pricing, and the after-fee margin when deciding whether the order or channel is commercially worthwhile. An online product pricing calculator can help keep those bases separate.

Records worth keeping

Keep a record trail that lets you explain both the GST treatment and the profit from each order. Retain supplier and customer invoices, receipts, credit notes, import documents and payment records in a searchable format. Link each document to the relevant order, SKU or purchase.

For every product, retain the classification decision and supporting details: product description, ingredients, recipe, packaging, bundle components, supplier information and whether GST was included, excluded or not charged. This matters when a hamper combines products with different treatments.

Your sales records should show order date, order number, products, quantities, selling price, delivery charge, discounts, GST amount, payment, cancellation, return and refund status. Purchase records should show stock costs, freight and other business purchases, with the GST amount where applicable.

Keep adjustment records for refunds, returns, discounts, damaged stock, cancelled orders and corrections, plus the working papers behind each adjustment. Retain BAS and other GST reporting calculations, reconciliations to your store and bank, and evidence of payments or refunds. Export records regularly rather than relying only on a platform account.

When to ask an adviser

Ask a tax or accounting adviser when the GST treatment is not clear from the individual product alone. This is especially important for mixed-product hampers containing items with different classifications, or when shipping is bundled into a single advertised price. An adviser can review the whole transaction rather than relying on a product-by-product assumption.

Get advice before selling imported goods. business.gov.au says the A$1,000 threshold is based on customs value, which excludes transport and insurance costs. Also seek advice before listing on a marketplace, changing a recipe or packaging, or introducing a new product line. If you are unsure whether to register, business.gov.au says registration is required once GST turnover is $75,000 or more, within 21 days of knowing the threshold will be exceeded (Source: business.gov.au (Australian Government)).

• Ask an adviser to confirm whether a hamper, bundle, shipping charge or marketplace arrangement changes the GST classification or reporting treatment.
• Have recipes and packaging reviewed when an ingredient, serving format or product description changes the basis for classification.
• Document the adviser’s conclusion and the assumptions used, then update pricing and bookkeeping rules when the product or sales channel changes.

GST pricing decisions depend on the product, transaction structure, customer price and records supporting the treatment. Use the worked example to understand how each figure connects, then confirm classifications, registration obligations and reporting treatment with an Australian tax adviser before changing prices or filing a BAS.