Business norms percentages No. 7 - cake shops

Am I an eligible cake shop operator?

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

• has a cash flow which is mainly from sales of cakes, pastries, or similar products (as opposed to products of bakeries or bread shops), and
   
• does not operate as a cafe.

Your retail cake shop 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.

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.

Cake shop business norms percentages

• GST-free sales: 2%
   
• GST-free purchases: 95%

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 you are liable to pay by accounting for each of your transactions.

More information

For more information refer to:

• Simplified GST accounting methods (NAT 3185)
   
• GST - completing your activity statement - business norms 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).

To obtain this information:

• visit our website at www.ato.gov.au
• phone 13 28 66, or  
• write to us at
  Australian Taxation Office
  PO Box 3524
  ALBURY  NSW  2640.

If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call. If you have a hearing or speech impairment and have access to appropriate TTY or modem equipment, phone 13 36 77. If you do not have access to TTY or modem equipment, phone the Speech to Speech Relay Service on 1300 555 727.