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Food retailers can use the simplified accounting methods to calculate their GST. There are four different methods that can be used depending on the food retailer’s business. They include:
- Business norms method - where the retailer applies standard percentages to their sales and purchases to estimate their GST-free sales and purchases. Retailers who use this method must have an annual turnover that is $1m or less.
- Stock purchases method - where the retailer takes a sample of purchases and uses this sample to estimate their GST-free purchases and sales. Retailers who use this method must have an annual turnover that is $2m or less.
- Snapshot method - where the retailer takes a snapshot of their purchases and sales to estimate their GST-free purchases and sales. Retailers who use this method must have an annual turnover that is $2m or less.
- Sales percentage method – where the retailer calculates the percentage of GST-free sales made in a tax period and applies this percentage to estimate their GST-free purchases (trading stock only). Retailers who use this method must have an annual turnover that is $2m or less.
In all these cases the annual turnover thresholds, as outlined above, are calculated on a
GST-exclusive basis.
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