Australia Proposes Continued GST Rules for Restaurants, Cafés and Caterers

The ATO has released draft LI 2026/D19 to replace the existing GST determination for eligible restaurants, cafés and catering businesses, allowing the current simplified GST framework to continue after the 2016 instrument is repealed. Eligible businesses must remain GST-registered, operate in the relevant sector and stay within the small enterprise turnover threshold. The draft is under consultation and would take effect after registration.

The Australian Taxation Office (ATO) has released draft legislative instrument LI 2026/D19, which would replace the existing 2016 GST determination for restaurants, cafés and catering businesses. The current instrument is scheduled to sunset on 1 October 2026, and the new determination would continue the regulatory framework after its replacement.

The draft specifically covers  restaurants, cafés and catering businesses that are registered for GST throughout the relevant tax period. To qualify, their GST turnover must also not exceed the small enterprise turnover threshold, which is currently AUD 2 million under the GST Act.

For affected retailers, the proposal is primarily about continuity rather than introducing new operational requirements. Eligible businesses would remain able to use the simplified GST framework for determining their GST position instead of having to individually classify the GST treatment of every trading-stock purchase. The draft applies to monthly, quarterly and annual GST tax periods.

From a compliance perspective, restaurants, cafés and caterers using this treatment should confirm that they remain GST registered, operate an eligible type of business and stay within the applicable turnover threshold. Under the GST Act, a business choosing a simplified accounting method must notify the Commissioner in the approved form and generally cannot revoke that choice within 12 months.

The draft determination is currently subject to consultation. Once finalised and registered, it would commence on the day after registration. Businesses using the existing arrangement should therefore monitor the final instrument ahead of the October 2026 sunset of the current rules.