• How to complete the GST section of your activity statement

    Attention

    You can only use the stock purchases method if you:

    • are a reseller (you sell the products you purchase in an unchanged form), and
    • have a SAM turnover of $2 million or less.
    End of attention

    If you sell the goods you purchase in an unchanged form, the percentage of your GST-free sales will be the same as the percentage of your GST-free purchases.

    To use this method, you must examine your purchases over a four-week period and work out what percentage of your purchases is GST-free. You then apply this percentage to your total sales to calculate your GST-free sales.

    You must work out the percentage twice during the year to allow for seasonal fluctuations, or you could do it at the end of every tax period.

    You fill in the same labels on your activity statement, your annual GST information report or your annual GST return, regardless of whether you:

    • examine your purchases for a sample period
    • examine your purchases every tax period
    • use the 5% GST-free stock estimation basis.

    If you report and pay annually, you:

    • are only required to take the steps used in preparing the annual return at the end of the year. After calculating the GST you are liable to pay, you must pay the GST to us.
    • report GST using the same method as businesses that report GST annually and pay GST in quarterly instalments.
      Last modified: 20 May 2014QC 19057