GST update: Impact on prepared meals and salad products
GST update: Impact on prepared meals and salad products
The Australian Taxation Office (ATO) has recently released Goods and Services Tax (GST) Determination (GSTD 2025/1) titled ‘Supplies of food of a kind marketed as a prepared meal’.
This determination has been released in response to the Federal Court’s decision in Simplot Australia Pty Ltd v Commissioner of Taxation and provides guidance on the GST treatment of certain food products. This determination may have implications for businesses supplying ‘prepared meals’, particularly salad-based products.
What’s changing?
The determination clarifies that certain food products marketed as ‘prepared meals’ are subject to GST and provides further guidance on the types of packaged salads that may now be taxable if they meet the definition of a prepared meal.
Within GSTD 2025/1, the ATO outlines a four-step method to assist taxpayers in determining the GST treatment of certain food types, which includes the following steps:
- Determining whether the product is a sufficient quantity for a meal
- Determining whether the product is covered by the Detailed Food List
- Applying a compliance approach for certain salad products
- Determining whether the product is of a kind that, as a matter of common sense and common experience, is marketed as a prepared meal.
The steps are detailed in GSTD 2025/1.
Transitional compliance period
To assist businesses in adjusting, the ATO has introduced a transitional compliance approach until 31 December 2025. This allows time to review GST treatment and update contracts where necessary. Products impacted include:
- Salad products
- Prepared meals
- Uncooked wraps.
How BDO can help
We recommend affected entities review their product list to confirm whether the current GST treatment still aligns with the ATO’s approach outlined in GSTD 2025/1.
If you need support to understand how this determination might impact your tax obligations, reach out to our indirect tax experts today. Our team can assist by conducting a detailed review of your product list in the context of this determination and advising on any required changes.
