• Worked example

    Maria is a convenience store owner who sells a variety of items, including groceries, newspapers, fresh fruit, vegetables, sandwiches and other takeaway food. She decides to use the snapshot method to calculate her GST-free sales and purchases.

    Maria has taken a snapshot of her stock purchases in quarter 1 and knows that 78% of them are GST-free. She works out that 72% of her stock sales are GST-free.

    Maria's records show the following:

    • total stock purchases for the quarter = $121,140
    • GST-free stock purchases for the quarter = $94,489 (78% x $121,140)
    • total stock sales for the quarter = $160,000, and
    • GST-free stock sales for the quarter = $115,200 (72% x $60,000).

    Maria's figures for quarter 2 are the same as for quarter 1; that is, the GST-free percentage of her stock purchases is 78% and the GST-free percentage of her stock sales is 72%.

    Seasonal fluctuation

    However, when Maria takes another snapshot of her stock purchases and stock sales for quarters 3 and 4, there has been some seasonal fluctuation:

    • GST-free percentage of stock purchases for quarters 3 and 4 is 72%
    • GST-free percentage of stock sales for quarters 3 and 4 is 64%.

    Annual figures

    Maria's figures for the whole year are as follows:

    • annual stock purchases = $559,140
    • annual stock sales = $770,000
    • annual GST-free purchases = $417,769
    • annual GST-free sales = $520,000

    Maria then chooses one of the following three options for calculating and reporting GST:

      Last modified: 25 Jun 2014QC 19058