Items not covered under GST (exempt or non-taxable) primarily include essential, unprocessed goods, and specific services, such as fresh fruits/vegetables, milk, bread, salt, grains, water, and electricity. Other exempt items include printed books, healthcare services, education services, and residential property sales.
List of Goods Exempted from GST
GST-Free Items:
Certain goods and services are exempt from GST due to their essential nature. This exemption applies based on the type of supply, not the supplier. Example: Healthcare services, educational services, and public utility services (e.g., water supply) are exempt from GST.
Key items exempted from GST:
Prepared foods and snacks: Vegetable trays, pre-made meals, salads, sandwiches, chips, candy, granola bars, etc. Dining: Restaurant meals (dine-in, takeout, or delivery). Beverages: Beer, wine, cider, and sake.
Fresh milk and pasteurized milk are fully exempt from GST. Further, milk products like curd, lassi, buttermilk, and paneer also are exempt from GST if sold in form apart from those pre-packaged and labeled.
GST is a 10% tax added to most goods and services sold in Australia, but not everything in the food and beverage sector is treated equally. Some items are GST-free, while others are fully taxable, and understanding the difference can have a direct impact on your pricing, bookkeeping, and compliance.
Daily food items like UHT milk, roti, paratha, paneer, and packaged snacks brought under 5% or Nil GST, easing household expenses. Reforms promote affordability, healthier lifestyles, and improved ease of living for youth and households.
By zero rating it is meant that the entire value chain of the supply is exempt from tax. This means that in case of zero rating, not only is the output exempt from payment of tax, there is no bar on taking/availing credit of taxes paid on the input side for making/providing the output supply.
GST on tea ranges from 0% to 5%, while coffee and spices attract 5% to 12% GST. Processed or packaged spices may attract a higher GST rate. Proper classification under the correct HSN code ensures compliance.
How to Avoid GST on Overseas Purchases Legally
Common Examples of GST Exempt Transactions:
Financial services – Most banking services, interest payments, and insurance premiums. Residential rent – Rental income from residential properties. Donated goods and services – Items or services that are given away without payment.
Examples of GST-free foods
cooking ingredients, such as flour, sugar and baking mixes that don't contain any taxable ingredients. dry preparations marketed for the purpose of flavouring milk. fats and oils marketed for culinary purposes. unflavoured milk, cream, cheese and eggs.
List of exempted goods under GST in India:
Office supplies, equipment, rental costs, and professional services are examples of expenses on which input tax can be claimed. Further, input tax cannot be claimed on the following expenses: private use, non-business entertainment, and motor vehicle expenses.
Beverages containing milk GST reduced from 12% to 5% Ice cream – GST reduced from 18% to 5% Milk cans – GST reduced from 12% to 5%
Charging GST Correctly: A Breakdown of Your Sales
Barista-Made Drinks: You must charge 10% GST on all hot and cold drinks prepared by your staff. This includes every coffee, tea, hot chocolate, and chai you sell.
Example: If the pre-GST price is $100 and the GST rate is 10%, the GST amount is $100 x 10% = $10. Total price: To find the total price, add the GST amount to the pre-GST price: $100 + $10 = $110.
Fresh eggs are exempt from GST (0%) under Chapter 4, as they are classified as unprocessed food products. However, processed or powdered eggs may attract 5% GST, depending on their use and packaging.
UHT milk and packed paneer are now 0% GST, while ghee and cheese are 5%. Stay updated on dairy tax reforms. Major GST 2.0 Update (2026): Significant savings are now available. Essential dairy products such as UHT milk and packaged paneer are exempt from GST, while the GST rate on ghee and cheese has been reduced to 5%.
Unbranded honey is exempt (0%), while packaged and labeled honey is taxed at 5% GST. What is the HSN code for honey? The HSN code is 0409 for natural honey.