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Easier GST reporting for food retailers

food retailers

Easier GST reporting for food retailers

Many small food retailers buy and sell products that are both taxable and GST-free. Depending on the point-of-sale equipment used, identifying and recording these sales can be difficult for business owners.
These methods help you work out the information you need to correctly complete the GST section of your activity statement, however, they can only be applied to sales and purchases of trading stock. If you decide to use a SAM, you will still need to separately consider other sales and expenses when you complete your activity statement.

There are two broad categories of SAMs that apply:

Businesses with a SAM turnover threshold of $2 million or less

Businesses in this category have three choices:

  • Basic norms: You apply the standard percentages to your sales and purchases.
  • Stock purchases: You take a sample of purchases and use this sample.
  • Snapshot: You take a snapshot of your sales and purchases and use this.

Businesses with a GST turnover of $2 million or less

Businesses in this category have two choices:

  • Sales percentage: You work out what percentage of GST-free sales you made in a tax period and apply this to your purchase.
  • Purchases snapshot: You take a snapshot of your purchases and use this to calculate your GST credits.

After electing to use a SAM you cannot change your method of GST accounting in the first 12 months.