GST in Australia: The Sales Tax Guide (It's Not Called VAT)
Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer
Australia doesn't have a VAT — it has the Goods and Services Tax (GST): a flat 10% tax on most goods and services. The practical difference visitors notice first: GST is built into the displayed price, so the price on the shelf is the price you pay. No surprise at the checkout.
The basics
10% on most things you buy: clothing, electronics, restaurant meals, processed groceries, professional services.
Included in prices. Retailers must display GST-inclusive prices, and receipts show the GST component separately.
Paid by everyone, including tourists and newcomers — there is no general exemption for visitors on everyday shopping.
What's GST-free
Not everything attracts GST. The main GST-free categories:
Basic fresh food — fruit, vegetables, meat, bread, milk and other unprepared groceries. Prepared meals, restaurant food, and takeaway attract GST.
Most health services and many medical goods.
Education — school, university, and TAFE courses.
If a receipt shows no GST on an item, it's usually because the item is GST-free or the seller isn't registered for GST.
GST and business: the $75,000 threshold
Businesses must register for GST once their turnover reaches $75,000 in any 12-month period ($150,000 for non-profit organisations). Two important exceptions:
Taxi and rideshare drivers must register for GST from the very first dollar — no threshold applies.
Registration is voluntary below the threshold, and some small businesses choose to register to claim GST credits.
A GST-registered business charges 10% GST on its sales, claims GST credits on its business purchases, and reports the difference to the ATO on a Business Activity Statement (BAS).
GST on imports and overseas purchases
GST doesn't stop at the border. Australia extends GST to many goods and digital services sold from overseas — imported services and digital products since 1 July 2017, and low-value imported goods (A$1,000 or less) since 1 July 2018. If you regularly buy from foreign sellers, expect GST to be collected at the point of sale in many cases — check the checkout breakdown rather than assuming the price is GST-free.
Tourists: getting GST back
There is a Tourist Refund Scheme for goods you buy in Australia and take out of the country with you. It has specific conditions and claim points (usually at the airport on departure), so check the current rules before counting on a refund.
Frequently asked questions
Is residential rent subject to GST?
Generally no — residential rent is not subject to GST. (Commercial leases are a different story.)
Why does my receipt show GST on some items but not others?
The GST-free items (basic fresh food, health, education) carry no GST. Also, a seller below the registration threshold who hasn't voluntarily registered won't charge GST at all.
Do I pay GST on secondhand goods bought from a private seller?
Typically no — private sales between individuals don't attract GST. Dealers and businesses selling secondhand goods are a different case.
I'm starting a small side business. When do I need to worry about GST?
Track your turnover over any rolling 12-month period. Once you're approaching $75,000, register before you cross it — and remember rideshare and taxi work has no threshold at all.
Sources
ATO — tax rates for Australian residents: https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents
ATO — your tax return: https://www.ato.gov.au/individuals-and-families/your-tax-return
ATO — businesses and organisations: https://www.ato.gov.au/businesses-and-organisations
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