• ## 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: