Do you remember hearing people talking about going to the vat at a farm and getting a jug of milk, skimming off the cream and drinking the fresh milk?
Ever wonder why we don’t hear of this happening now?
Believe it or not, GST had something to do with this.
When GST was being introduced and discussions around fresh food being GST free, the farming industry raised concerns that their income would be GST free, however their expenses would include GST. This effectively meant their cashflow was going to be impacted.
To overcome this, milk at the farm gate was declared unfit for human consumption, and therefore the farmers would receive GST on their income.
I’m sure there are other reasons that milk can no longer legally be sold straight from the farm. But GST was the start of it.
Our GST rules around food are overly complicated and even brought down a prime minister.
Here are a few examples of the stranger
So how does a small food business selling a variety of GST inclusive, GST free product keep up with their reporting?
There are five Simplified Accounting Methods (SAMS) that can be used, which basically allow the business to use averages to calculate their GST sales and purchases. See which one suits you best here.
So back to milk, do you think flavored milk includes GST?
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