Document ID: chunk:federal_register_of_legislation:F2015L01587:body:0:p2
Version: federal_register_of_legislation:F2015L01587
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Character Range: 2634–4878

Services Tax) Act 1999 (Simplified GST Accounting Methods) Determination 2001).

Simplified Accounting Method

  6.  (1) The simplified accounting method is as follows:

      (a) If you account on a cash basis, calculate the total consideration you provide during the tax period for the goods you purchase. If you do not account on a cash basis, calculate the total consideration for those goods you purchase for which an invoice was issued, or any part of the consideration was provided, during the tax period.

      (b) Calculate the total consideration for the sales of goods you make during the tax period that are GST-free supplies.

      (c) Calculate the total consideration for all of the sales of goods you make during the tax period, whether taxable supplies or GST-free supplies.

      (d) Divide the total at (b) by the total at (c) and express the result as a percentage.

      (e) Multiply this percentage by the total at (a). (The result is an estimate of your GST-free purchases.)

      (f) Subtract (e) from (a). (The result is an estimate of your taxable purchases.)

      (g) Multiply (f) by 1/11th.  The result is your input tax credit entitlement for the purchases mentioned in paragraph (a). Your net amount for the tax period is otherwise worked out in the normal way.

    (2) Paragraphs (1)(a), (b) and (c) do not apply to goods that are:

      (a) not held by you for the purposes of sale or exchange in the ordinary course of business; or

      (b) not part of the range of food and domestic goods commonly sold at supermarkets or convenience stores; or

      (c) held by you in substantially greater quantity or variety than is common for supermarkets or convenience stores; or

      (d) alcoholic beverages.

   (3) If your GST return for a tax period for which a choice to use this method  is not in effect takes into account an input tax credit for a purchase covered by paragraph 5(1)(a) for an earlier tax period, your net amount for that earlier tax period is increased by the amount of that credit.

Definitions

  7. Terms in this determination that are defined in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning in this determination as they have in that Act.