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Primary Producers

  • If you are only a hobby farmer and are not carrying on an enterprise, you cannot be registered for GST.
  • Exports are GST-free.
  • Livestock sales are taxable, but slaughtered stock for human consumption are GST-free as “food.” Delivery of livestock to a procession is a taxable supply. Live crustaceans and molluscs are treated as food and are GST-free if supplied for human consumption.
  • At auctions, the GST inclusive or GST exclusive nature of the sale will need to be disclosed.
  • Unprocessed grains, cereal and sugar are not GST-free as “food”. Nor are edible plants still under cultivation.
  • Food fit for human consumption sold at the farm gate is GST-free, except for unprocessed cow’s milk which is subject to GST
  • “No strings attached” subsidies are not subject to GST. If conditional, this may be a taxable supply by the recipient.
  • If you live on the farm, expenses will need to be apportioned to reflect the business usage in order to calculate input tax credits.
  • Tax invoices may be provided by the recipient, rather than the supplier, for certain types of agricultural supply.
  • Special rules for accounting for GST apply to agricultural pooling contracts.
  • A concessional rule applies to primary producers using the small business instalments system.
  • Where a live animal is exported (e.g. for breeding purposes) and then re-imported, the importation will only be subject to GST on the increase in value of the animal.
  • A simplified accounting method may be used if GST-free food and other taxable items are sold at the same location.
  • Grants of unimproved Crown land are GST-free. Sales of farms as going concerns are GST-free.
  • The sale of farm land, even if it is not a going concern, may also be GST free.
  • The sale of subdivided farm land to associates to use for residential purposes may be GST-free.
  • A forward contract to sell a commodity at a fixed price on a given date is not an input taxed financial supply and will be taxable.
  • Entities engaged in an approved mining, agriculture, forestry or fishing joint venture can have it approved as a GST joint venture with simplified GST accounting rules.
  • An accruals basis primary producer who receives a prepayment for produce will be liable for GST on the total invoice amount when the invoice is issued, but a cash basis producer will only be liable for GST on the actual amount received.
  • An input tax credit of 1/11th of the cost can be claimed on the purchase of a dairy quota. The subsequent sale of the quota can be GST-free if it is sold as part of a going concern.
  • Rent charged to workers on accommodation supplied to them is input taxed, so no GST applies and no input tax credits can be claimed for repairs.
  • As between the landowner and the sharefarmer, it would normally be desirable that both parties be registered, so that the GST on internal transactions can be cancelled out by input tax credit entitlements.
  • GST applies to the services of registered contractors, but not employees.
  • Wine producers may be liable for wine equalisation tax, though significant rebates apply.
  • Primary producers may be entitled to a partial refund of luxury car tax on specified vehicles.

Our dedicated team can assist you with all your accounting and GST related matters. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.

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The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.