IN THIS ARTICLE
- Main GST free products and services
- Exports of goods
- Other exports
- Sale of a business as a going concern
- Cars, car parts and leasing
Main GST free products and services
Most basic foods, some education courses and some medical, health and care products and services are GST free, often referred to as exempt from GST.
Things that are GST free include:
- most basic food
- some education courses, course materials and related excursions or field trips
- some medical, health and care services
- some menstrual products
- some medical aids and appliances
- some medicines
- some childcare services
- some religious services and charitable activities
- supplies of accommodation and meals to residents of retirement villages by certain operators
- cars for disabled people to use, when certain requirements are met
- water, sewerage and drainage
- international transport and related matters
- precious metals
- sales through duty-free shops
- grants of land by government
- international mail
- sales of businesses as going concerns
- some telecommunications supplies
- eligible emissions units.
- GST food list
- GST Rulings and Determinations
Exports of goods
Exported goods are GST free if they are exported from Australia within 60 days of one of the following, whichever occurs first:
- the supplier receives any payment for the goods
- the supplier issues an invoice for the goods.
In the case of goods paid for by instalments, the payment or invoice must be for the final instalment.
Suppliers can apply to us to extend the 60-day period.
Other exports generally include supplies of things other than goods for consumption outside Australia, such as:
- various rights
- other professional services.
A supply of a service is usually GST free if the recipient of the service is outside Australia.
There are specific rules that determine if the supply is GST free.
- GSTR 2019/1 Goods and services tax: supply of anything other than goods or real property connected with the indirect tax zone (Australia)
- GSTR 2018/2 Goods and services tax: supplies of goods connected with the indirect tax zone (Australia)
- GSTR 2002/6 Exports of goods
- GST definitions
Sale of a business as a going concern
The sale of a business as a going concern is GST free if all the following apply:
- before the sale, the buyer and seller agree in writing that the sale is of a going concern
- the buyer is registered or required to be registered for GST
- everything necessary for the business to continue operation is supplied to the buyer
- the seller carries on the business until the day it is sold (date of settlement)
- payment is made for the sale.
- Sale of a business as a going concern – supporting information
- GSTR 2002/5 When is a ‘supply of a going concern’ GST free?
- GST definitions
Cars, car parts and leasing
If you are eligible to purchase a car GST free, you are also entitled to:
- lease a car GST free, providing you meet the other conditions relating to intended use
- purchase car parts (such as batteries, tyres and disc brake pads) GST free.
Petrol, oil or accessories such as mudflaps are not GST free.
If you satisfy the eligibility criteria, complete a Declaration for an exemption of GST on a car or car parts and present it to your car or car parts supplier.
An eligible veteran with a disability can also get an approved form from the Department of Veterans’ Affairs to apply for a rebate on the purchase of a motorcycle and motorcycle parts.
If you do not have a declaration for exemption before you purchase your car or car parts, the dealer or supplier may charge you GST. You may be able to get a refund of the GST after you have purchased your car or car parts. However, it is simpler for you if you provide the declaration before you make your purchase. Under tax law, we are unable to provide you with a direct refund of the GST you paid on either your car or car parts.
Find out about
- Purchasing a car
- Leasing a car
- Car parts
- Eligibility for tax concessions on cars for people with a disability
- Medical aids and car appliances
- Declaration for an exemption of GST on a car or car parts – person with a disability who is gainfully employed
- Declaration for an exemption of GST on a car or car parts – disabled veterans
- Motorcycle GST rebate scheme (for disabled veterans)
Purchasing a car
An eligible person is exempt from paying GST on a car up to the value of the ‘car limit.
The ‘car limit’ figure is set annually. You must pay GST on any amount above that limit.
The value of the car you purchase does not include the value of any modifications made solely to adapt the car for you to drive or be driven in.
If the value of a modified car exceeds the car limit, you must pay GST on the value above the car limit. You do not pay GST on the value of the modifications made to the car.
Leasing a car
If you are eligible to purchase a car GST free, then you can also lease a car GST free, if both of the following apply:
- the lease is for a minimum of two years, or you use the car to travel 40,000 kilometres from the date you lease it
- you intend to use the car for the prescribed purpose for the whole of that period – for example, an eligible person with a disability must also plan to use the car for their personal transport to or from gainful employment for the whole period.
Under a novation arrangement, you may agree with the lessor and the finance company to take over all or part of the lessee’s rights and obligations under a lease.
Whether a car is GST free under a novation arrangement depends on the type of arrangement you entered.
If you lease it under a partial novation arrangement the car is GST free. Under a partial novation lease your employer does not lease the car, but you lease it directly.
If it is subject to a full novation arrangement the car is not GST free. Under a full novation arrangement your employer leases the car.
See also: Vehicles purchased under novated leases
If you are eligible to purchase a car GST free, you are also entitled to purchase certain car parts GST free, including items such as:
- disc brake pads
- oil filters
- petrol filters
- liquid petroleum gas (LPG) conversion kits
- spark plugs
- water and fuel pumps
- radiator hoses
- head and tail-light globes.
Items that are not car parts are not GST free, these include:
- oil and grease
- hydraulic fluid
- radiator or petrol additives
- refrigerant gas
- brake fluid
Accessories are not car parts and are not GST free, these include:
- pin striping
- roof racks
- CD players.
Parts that are not specifically for cars are not GST free. For example, parts specifically for trucks, vans, buses, motorcycles and other machinery.
Car parts purchased by a business for sale to eligible people are not GST free for the business.
- must pay GST when it purchases the car parts and can later claim a GST credit (if registered for GST) on their activity statement
- can sell the car parts GST free to eligible people when presented with a completed declaration.
Car parts supplied to you during a repair of your car, and the cost of labour services in fitting those parts to your car, are GST free. This is because the supply of car parts and labour to an eligible person is treated as a single GST free ‘sale of car parts’.
If car parts are supplied to you when you service your car and those parts are integral to the servicing of your car then those parts and the labour services in fitting those parts are not GST free. A car service, which typically involves mostly labour services with some integral parts, such as spark plugs or filters, is a taxable sale and incurs GST.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.