GST on Food: What is Tax-Free? (Cafe Guide)

GST in hospitality is messy. If you get your "GST-Free" settings wrong in your POS, you will underpay the ATO and face fines later.

The Golden Rules

• Taxable (10% GST): All hot food, all drinks (soft drink, coffee), and all food eaten on premises.
• GST-Free: Basic food items like milk, bread, bottled water (natural only), and fruit juice (if >90% juice).

The "Sandwich" Trap

A cold sandwich sold to take away is GST-Free. If you toast that same sandwich, it becomes GST Taxable. Your POS needs a button to toggle this!