Document ID: chunk:federal_register_of_legislation:F2015L01578:body:0:p2
Version: federal_register_of_legislation:F2015L01578
Segment Type: other
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Character Range: 2902–5816

method.

Simplified Accounting Method

   6. The simplified accounting method is, in working out the government entity's net amount, either:

         (a)           the GST payable by the government entity on the taxable supplies made through each sub-entity to which its choice applies must be estimated using method A; or

         (b)           the GST payable by the government entity on the taxable supplies made through each sub-entity to which its choice applies, and the government entity's entitlement to input tax credits on creditable acquisitions made through each of those sub-entities, must be estimated using method B.

   The government entity's notice of its choice must specify whether it chooses to use method A or method B. The government entity may not choose to use method A for some sub-entities and method B for other sub‑entities.

Definitions

   7. The following expressions are defined for the purposes of this determination:

   four-week sample period means any continuous four-week period that occurs between either:

          (a)          1 June - 31 July (to cover the tax periods that begin between the first  day of that July and the last day of the following December inclusive); or

         (b)          1 December - 31 January (to cover the tax periods that begin between the first day of that January and the last day of the following June inclusive).

   GST Act means the A New Tax System (Goods and Services Tax) Act 1999.

   method A is:

     1. Record the total stock purchases for the sub-entity.

     2. Record the total creditable stock purchases for the sub-entity.

         3. Divide the total creditable stock purchases (2) by the total stock purchases (1) to calculate the percentage of creditable purchases.

         4. Apply this percentage to the total sales made by the sub‑entity and then multiply by 1/11th to estimate the GST payable on those sales for the tax period.

   method B is:

         1. Record your total stock purchases for the sub-entity for a four-week sample period.

         2. Record your total creditable stock purchases for the sub-entity for the four-week sample period.

         3. Divide the total creditable stock purchases (2) by the total stock purchases (1) to calculate the percentage of creditable purchases.

         4. Apply this percentage to the total stock purchases by the sub‑entity to estimate the creditable purchases for each of the tax periods covered by the four‑week sample period and then multiply by 1/11th to estimate the input tax credit entitlement on those purchases for each of those tax periods.

         5. Apply the same percentage to the total sales by the sub‑entity for each of those tax periods and then multiply by 1/11th to estimate the GST payable on those sales for each of those respective tax periods.

   sub-entity of an entity means an organisation that:

     (a)