• Business norms percentages No. 5 - rural convenience stores

    Am I eligible as a rural convenience store operator?

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

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

    • sells taxable and GST-free food from the same premises
    • does not sell alcoholic beverages, and
    • has a net simplified GST accounting methods (SAM) turnover of $2 million or less after deducting any
      • fuel sales, and
      •  Australia Post agency business.
         
       

    Your rural convenience store must also:

    • be registered for GST, and
    • not have point-of-sale equipment that can identify and record your mix of taxable and GST-free sales such as groceries, drinks etc (even if you have adequate point-of-sale equipment to identify and record your fuel or Australia Post agency business sales).
    Attention

    For the purposes of simplified accounting, a convenience store (also known as a mixed business, milk bar or deli) derives its 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.

    End of attention

    Before applying the business norms percentages, you must:

    • deduct any fuel or Australia Post agency business sales from total sales
    • deduct any fuel or Australia Post agency business purchases from total purchases, and
    • apply the relevant business norm percentage if you are a
      • converter - for example, you may convert GST-free bread and fillings into sandwiches, or GST-free potatoes and fish into taxable fish and chips, or
      • non-converter - that is, you do not prepare takeaways or hot food.
       

    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.

    Rural convenience store business norms percentages

    Converters

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

    Non-converters

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

    Any fuel and/or Australia Post agency business sales should be included in total sales at box G1 of your activity statement.

    If you do not want to use the business norms simplified accounting method, you can use the stock purchases simplified accounting method (if you are a non-converter) or the snapshot simplified accounting method (if you are a converter).

    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:

    To obtain this information:

    • 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.

      Last modified: 30 Jun 2010QC 16271