GST treatment
Scenario:
ATO suggests that bottled drinking water is GST-free, and if the fruit and vegetable juices’ content is greater than 90%, they are GST-free and GST taxable otherwise. I own a cafe, and buy bottled juices then put them in the fridge and sell them to customers. It is noted that taxable food includes all food and beverages sold in restaurants or for consumption on the premises. 99% of the patrons sit down and eat the food that is sold, but I also sell takeaway coffees and customers could also buy drinks in the bottle and take those away.
I need some advice on whether or not the sale of bottled juices and water in a café setting is GST-free.
Explanation:
As mentioned above, certain food and beverages will be treated as GST-free supplies within GST law. However, s 38-3 of the GST Act treats all food and beverage sold by cafes and restaurant as taxable no matter whether the food is consumed on the premises or sold as a takeaway.
So, your café should include GST to all goods it sells.