Document ID: chunk:federal_register_of_legislation:F2016L01534:body:0:p2
Version: federal_register_of_legislation:F2016L01534
Segment Type: other
Provision Reference: 
Character Range: 2702–5614

financial year, the first sample period must be in the first two months of trading.

                   Note: "first two months of trading" means the first two months where the entity started selling food to its customers.

      (2) Work out the amount of trading stock purchased during each sample period

      Calculate the amount of trading stock that the entity purchased during each sample period in 5(1) using one of the following methods:

          (a) If the entity accounts on a cash basis, the amount is the total consideration the entity provides during the sample period for trading stock purchases.

          (b) If the entity does not account on a cash basis, the amount is the total price of trading stock for which the earlier of the following occurs during the sample period:

                         the entity provides any of the consideration; or

                         an invoice was issued for the acquisition.

      (3) Work out the percentage of GST-free trading stock purchases for the sample period

         (a)  From the amount of trading stock calculated at 5(2), determine the amount which relates to GST-free acquisitions.

         (b)  Divide the total amount of GST-free acquisitions from 5(3)(a) by the total trading stock acquisitions from 5(2) and express the result as a percentage. This is the percentage of the entity's GST-free trading stock that it purchased for the sample period.

      (4) Work out the input tax credits the entity can claim for each tax period using the GST-free trading stock purchases percentage

         (a)  Calculate the amount of trading stock that the entity purchased during a tax period by using one of the following methods:

         (i) If the entity accounts on a cash basis, the amount is the total consideration the entity provides during the tax period for trading stock purchases.

         (ii) If the entity does not account on a cash basis, the amount is the total price of any trading stock for which the earlier of the following occurs during the tax period:

                        the entity provides any of the consideration; or

                        an invoice was issued for the acquisition.

         (b)  The amount of GST-free trading stock for each tax period is calculated as follows:

           (i) GST-free trading stock purchases for tax periods in July to December are calculated by multiplying the percentage of GST-free trading stock from the sample period during 1 June to 31 July (of the same calendar year) worked out in 5(3)(b) with the amount of trading stock the entity purchased in each tax period worked out in 5(4)(a);

           (ii) GST-free trading stock purchases for tax periods in January to June is calculated by multiplying the percentage of GST-free trading stock from the sample period during 1 December to 31 January (of the same financial year) worked