Business norms percentages No. 2 - convenience stores that convert food

Am I an eligible convenience store operator?

You may be eligible to use the business norms percentages to estimate your GST-free sales and purchases if your convenience store:

• sells milk, bread, soft drinks, cigarettes, confectionery, ice-cream or groceries
   
• does not sell fuel or alcoholic beverages, and
   
• converts GST-free food into taxable food (for example, you prepare hamburgers or sandwiches).
   

Your convenience store must also:

• be registered for GST
   
• have a simplified GST accounting methods (SAM) turnover of $2 million or less
   
• not have point-of-sale equipment that can identify and record your mix of taxable and GST-free sales, and
   
• sell taxable and GST-free food from the same premises.

For purposes of simplified accounting, a convenience store (also known as a mixed business, milk bar or deli) derives its business income mainly from the sale of mixed business product lines (such as bread, milk, dairy products, cigarettes, confectionery, and grocery lines). This definition does not include stores where the majority of sales are of takeaway food items.

If you meet all of the eligibility requirements, you can use the business norms percentages to estimate your GST-free sales and purchases at the end of each tax period, rather than having to record every transaction at the point of sale.

If you operate a convenience store that does not convert food and you want to use the business norms simplified GST accounting method, refer to Business norms percentages No. 3 - convenience stores that do not convert food (NAT 3188).

Convenience stores business norms percentages - converter

The business norms percentages for convenience stores that convert food are:

• GST-free sales - 22.5%
   
• GST-free purchases - 30%.

If you do not want to use the business norms simplified accounting method, you can use the snapshot simplified accounting method.

If you do not want to use any of the simplified accounting methods you must work out the amount of GST payable by accounting for each of your transactions.

More information

For more information refer to:

• Simplified GST accounting methods (NAT 3185)
   
• Completing your activity statement - business norms percentages method (NAT 16013)
   
• GST food guide (NAT 3338)
   
• Cash and non-cash accounting (NAT 3136)
   
• Simpler GST accounting for the food and grocery industry (NAT 7162).

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