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  • Completing your activity statement

    A SAM can only be applied to sales and purchases of trading stock. If you decide to use a SAM, you will still need to separately consider other sales (such as non-stock or capital items) and expenses (such as rent, phone and any capital items) when you complete your activity statement.

    Unless we have told you that you must report monthly, you can choose one of three options for calculating and reporting GST:

    • Option 1: calculating and reporting quarterly
    • Option 2: paying or claiming quarterly but lodging a report annually
    • Option 3: reporting annually and paying a GST instalment amount quarterly.

    If you are eligible to report and pay annually, you report GST using the same method as businesses that use option 3. You are only required to take the steps used in preparing the annual return at the end of the year and pay us the GST owing.

    Find out about:

    See also:

    Business norms method – worked example

    Carlo owns a hot bread shop and has an old cash register that only records the total money received. Carlo's records show that for the current quarterly tax period, his:

    • total stock sales are $120,000
    • total stock purchases are $95,000.

    The standard percentages for hot bread shops are 50% for GST-free sales and 75% for GST-free purchases.

    Using these percentages, Carlo works out that, for the quarter, his:

    • GST-free sales are $60,000 (50% × $120,000)
    • GST-free purchases are $71,250 (75% × $95,000).

    If Carlo wants to work out his GST-free sales and purchases for the whole year, he applies the same percentages to his annual figures, that is, if his:

    • total annual stock sales are $520,000, his GST-free sales would be $260,000 (50% × $520,000),
    • total annual stock purchases are $412,000, his GST-free purchases would be $309,000 (75% × $412,000).

    Find out about:

    Option 1: calculate GST and report quarterly (or monthly)

    If Carlo uses option 1 of GST reporting, he must report and pay (or claim) his GST amounts each quarter.

    Carlo uses the calculation worksheet method to complete his activity statement. Using the information in his records for the quarter, he fills in his calculation worksheet as follows:

    • his stock sales of $120,000 at G1 (Total sales including GST)
    • applying the relevant standard percentage of 50% for sales he writes $60,000 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $60,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $5,454 at G9 (G8 divided by eleven: $60,000 ÷ 11)
    • his stock purchases of $95,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • applying the relevant standard percentage of 75% for purchases he writes $71,250 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $23,750 at G17 (G12 − G16) and G19 (G17+G18)
    • $2,159 at G20 (GST on purchases: G19 divided by eleven, $23,750 ÷ 11).

    Carlo then copies the information from his calculation worksheet to Option 1 of the GST section of his activity statement as follows:

    • his sales of $120,000 at G1 (Total sales)
    • crosses 'Yes' to indicate that the amount at G1 includes GST
    • $60,000 at G3 (Other GST-free sales)
    • his purchases of $95,000 at G11 (Non-capital purchases).

    On the back of the activity statement he fills in the Summary section as follows:

    • $5,454 at 1A (GST on sales) and 8A (Total)
    • $2,159 at 1B (GST on purchases) and 8B (Total).

    Carlo would also fill in labels for any other obligations he has. These may include pay as you go (PAYG) instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Carlo only had the GST obligations noted above, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $3,295 at 9 (payment or refund amount).

    After filling in his activity statement, Carlo lodges it and pays $3,295 by the due date. He does not lodge his calculation worksheet but keeps it with his records.

    Carlo repeats the above steps for each quarter.

    Option 2: pay or claim quarterly but lodge a report annually

    If Carlo selects option 2 of GST reporting, he calculates his GST and pays or claims it quarterly and lodges a GST information report at the end of the financial year.

    His quarterly sales ($120,000), purchases ($95,000) and calculation worksheet are the same as under option 1. Carlo copies the following information from his calculation worksheet to Option 2 of the GST section of his activity statement as follows:

    • his sales of $120,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST.

    On the back of the activity statement he fills in the Summary section as follows:

    • $5,454 at 1A (GST on sales) and 8A (Total)
    • $2,159 at 1B (GST on purchases) and 8B (Total).

    Carlo would also fill in labels for any other obligations he has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary and would result in a payment or refund.

    If Carlo only had the GST obligations noted above, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $3,295 at 9 (payment or refund amount).

    After filling in his activity statement, Carlo lodges it and pays $3,295 by the due date. He does not lodge his calculation worksheet but keeps it with his records.

    Carlo repeats the above steps for each quarter.

    At the end of the financial year, Carlo fills in the labels on his annual GST information report as follows:

    • his GST-free sales are $260,000 (50% × $520,000) so he writes $260,000 at G3 (Other GST-free sales)
    • his total annual stock purchases are $412,000 so he writes this amount at G11 (Non-capital purchases).

    If he had any export sales or capital purchases he would also fill in boxes G2 and/or G10.

    Carlo must lodge his annual GST information report by the due date.

    Option 3: to pay a GST instalment amount

    Carlo's sales and purchases for the first quarter are $120,000 and $95,000 respectively – the same as in option 1. His annual sales ($520,000) and purchases ($412,000) are the same as in option 2.

    We advised Carlo that his GST instalment amount is $3,333. His activity statement for the first quarter shows this amount in Option 3 of the GST section at G21. As he does not want to vary this amount he writes in $3,333 at 1A in the Summary section.

    Carlo would also fill in labels for any other obligations he has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Carlo only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $3,333 at 9 (payment or refund amount).

    After filling in his activity statement, Carlo lodges it and pays $3,333 by the due date. He repeats this process for each quarter.

    After the end of the financial year, Carlo must lodge an annual GST return by the due date to account for any difference between his total instalments (an estimate) and his actual GST liability for the year. To work out his GST liability for the year, Carlo completes a calculation worksheet as follows:

    • his stock sales of $520,000 at G1 (Total sales including GST). He would also include the sale of other non-stock items here if necessary
    • applying the relevant standard percentage of 50% for sales he writes $260,000 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $260,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $23,636 at G9 (G8 divided by eleven: $260,000 ÷ 11)
    • his stock purchases of $412,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • applying the relevant standard percentage of 75% for purchases he writes $309,000 ($412,000 × 75%) at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $103,000 at G17 (G12 − G16) and G19 (G17+G18)
    • $9,363 at G20 (GST on purchases: G19 divided by eleven: $103,000 ÷ 11).

    Carlo copies the information from his calculation worksheet to the front of his annual GST return as follows:

    • $520,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST
    • $260,000 (50% × $520,000) at G3 (Other GST-free sales)
    • $412,000 at G11 (Non-capital purchases).

    On the back of his annual GST return in the Summary section he writes as follows:

    • $23,636 at 1A (GST on sales) and 2A (Total)
    • $9,363 at 1B (GST on purchases)
    • $13,332 ($3,333 × 4) at 1H (GST instalments)
    • $22,695 at 2B (1B+1D+1F+1H).

    He completes the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 2A is greater than 2B
    • $941 (2A − 2B) at 9 (payment or refund amount).

    You provide these details for the period in which you use option 3. In Carlo's case, the period is the full financial year.

    Stock purchases method – worked example

    Andrew runs a supermarket in which he resells all his goods – he does not convert any GST-free goods into taxable products.

    Andrew works out that his percentage of GST-free purchases is 49% based on a sample of a four-week period between June and July. He then applies that percentage to his GST-free sales and purchases for quarter 1:

    • total stock purchases: $203,000
    • total GST-free purchases: $99,470 (49% × $203,000)
    • total stock sales: $219,500
    • total GST-free sales: $107,555 (49% × $219,500).

    For quarter 2 Andrew can use the same GST-free percentage and calculates:

    • GST-free purchases: $105,350 (49% × $215,000)
    • GST-free sales: $122,500 (49% × $250,000).

    For quarters 3 and 4, Andrew works out that his percentage of GST-free purchases is 45% based on a sample of a four-week period between December and January. He works out his GST-free purchases and sales for quarters 3 and 4 using this new percentage.

    The rest of this example shows what would happen if Andrew selected:

    You fill in the same labels on your activity statement, your annual GST information report or your annual GST return for all three ways of using the stock purchases method.

    Option 1: to calculate GST and report quarterly (or monthly)

    If Andrew uses option 1 of GST reporting, he needs to report and pay (or claim) his GST amounts each quarter. He uses the calculation worksheet method to work out his GST amounts.

    Using the information in his records for the quarter, Andrew fills in his calculation worksheet as follows.

    • his stock sales of $219,500 at G1 (Total sales including GST)
    • $107,555 (49% × $219,500) at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $111,945 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $10,176 at G9 (GST on sales: G8 divided by eleven: $111,945 ÷ 11)
    • his stock purchases of $203,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • $99,470 (49% × $203,000) at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $103,530 at G17 (G12 − G16) and G19 (G17+G18)
    • $9,411 at G20 (G19 divided by eleven: $103,530 ÷ 11).

    Andrew then copies the information from his calculation worksheet to Option 1 of the GST section of his activity statement as follows:

    • his sales of $219,500 at G1 (Total sales)
    • crosses 'Yes' to indicate that the amount at G1 includes GST
    • $107,555 at G3 (Other GST-free sales)
    • his purchases of $203,000 at G11 (Non-capital purchases).

    On the back of the activity statement he fills in the Summary section as follows:

    • $10,176 at 1A (GST on sales) and 8A (Total)
    • $9,411 at 1B (GST on purchases) and 8B (Total).

    Andrew would also fill in labels for any other obligations he has. These may include pay as you go (PAYG) instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Andrew only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $765 (8A − 8B) at 9 (payment or refund amount).

    After filling in his activity statement, Andrew lodges it and pays $765 by the due date. He does not lodge his calculation worksheet but keeps it with his records.

    Andrew repeats the above steps for each quarter.

    Option 2: to pay or claim quarterly but lodge a report annually

    If Andrew selects option 2 of GST reporting, he calculates his GST and pays or claims it quarterly and lodges a GST information report at the end of the financial year.

    His quarterly sales ($219,500), purchases ($203,000) and calculation worksheet are the same as under option 1. Andrew copies the following information from his calculation worksheet to Option 2 of the GST section of his activity statement as follows:

    • his sales of $219,500 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST.

    On the back of the activity statement he fills in the Summary section as follows:

    • $10,176 at 1A (GST on sales) and 8A (Total)
    • $9,411 at 1B (GST on purchases) and 8B (Total).

    Andrew would also fill in labels for any other obligations he has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Andrew only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $765 (8A − 8B) at 9 (payment or refund amount).

    After filling in his activity statement, Andrew lodges it and pays $765 by the due date. He does not lodge his calculation worksheet but keeps it with his records.

    Andrew repeats the above steps for each quarter.

    Andrew prepares the following summary of his annual sales and purchases from the records he must keep under the stock purchases method.

    Andrew's purchases and sales record for the whole year

     Quarter

     

    Purchases 

    Sales

    Total

    GST-free

    GST-free %

    Total

    GST-free (total sales × GST-free %)

    Quarter 1

    $203,000

    $99,470

    49%

    $219,500

    $107,555

    Quarter 2

    $215,000

    $105,350

    49%

    $250,000

    $122,500

    Quarter 3

    $229,000

    $103,050

    45%

    $290,000

    $130,500

    Quarter 4

    $240,000

    $108,000

    45%

    $305,000

    $137,250

    Totals

    $887,000

    $415,870

     

    $1,064,500

    $497,805

    Andrew's GST-free percentage figures are based on his two four-week sample periods:

    • June–July (for quarters 1 and 2)
    • December–January (for quarters 3 and 4).

    At the end of the financial year, Andrew fills in the labels on his annual GST information report as follows:

    • $497,805 at G3 (Other GST-free sales)
    • $887,000 at G11 (Non-capital purchases).

    If he had any export sales or capital purchases he would also fill in boxes G2 and/or G10.

    Andrew must lodge his annual GST information report by the due date.

    Option 3: to pay a GST instalment amount

    Andrew's purchases and sales for the first quarter are the same as in option 1; that is, his:

    • total purchases are $203,000
    • total sales are $219,500.

    Andrew's total purchases and sales for the whole year are the same as shown in option 2, that is, his:

    • annual purchases are $887,000
    • annual sales are $1,064,500.

    We advised Andrew that his GST instalment amount is $1,998. His activity statement for the first quarter shows this amount in Option 3 of the GST section at G21. As he does not want to vary this amount he writes in $1,998 at 1A in the Summary section.

    Andrew would also fill in labels for any other obligations he has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Andrew only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $1,998 at 9 (payment or refund amount).

    After filling in his activity statement, Andrew lodges it and pays $1,998 by the due date shown on the activity statement. He repeats this process for each quarter.

    At the end of the financial year, Andrew must lodge an annual GST return by the due date to account for any difference between his total instalments (an estimate) and his GST liability for the year.

    Andrew completes his calculation worksheet using details of his annual sales and purchases that are summarised from the records he must keep under the stock purchases method as follows:

    • his stock sales of $1,064,500 at G1 (Total sales including GST). He would also include the sale of other non-stock items here if necessary
    • $497,805 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $566,695 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $51,517 at G9 (GST on sales: G8 divided by eleven: $566,695 ÷ 11)
    • his stock purchases of $887,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • $415,870 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $471,130 at G17 (G12 − G16) and G19 (G17+G18)
    • $42,830 at G20 (GST on purchases: G19 divided by eleven: $471,130 ÷ 11).

    Andrew copies the information from his calculation worksheet to the front of his annual GST return as follows:

    • $1,064,500 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST
    • $497,805 at G3 (Other GST-free sales)
    • $887,000 at G11 (Non-capital purchases).

    On the back of his annual GST return in the Summary section he writes as follows:

    • $51,517 at 1A (GST on sales) and 2A (Total)
    • $42,830 at 1B (GST on purchases)
    • $7,992 ($1,998 × 4) at 1H (GST instalments)
    • $50,822 at 2B (1B+1D+1F+1H).

    He completes the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 2A is greater than 2B
    • $695 (2A − 2B) at 9 (payment or refund amount).

    You provide these details for the period in which you use option 3. In Andrew's case, the period is the full financial year.

    Snapshot method – 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% × $121,140)
    • total stock sales for the quarter = $160,000
    • GST-free stock sales for the quarter = $115,200 (72% × $160,000).

    Maria uses the same percentages for quarter 2; that is, the GST-free percentage of her stock purchases is 78% and the GST-free percentage of her stock sales is 72%.

    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%.

    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

    The rest of this example shows what would happen if Maria selected:

    You fill in the same labels on your activity statement, annual GST information report or annual GST return for all three ways of using the snapshot method.

    Option 1: To calculate GST and report quarterly (or monthly)

    If Maria uses option 1 of GST reporting, she needs to report and pay (or claim) her GST amounts each quarter. She uses the calculation worksheet method to work out her GST amounts.

    When you use this option, remember to include:

    • the sale of other non-stock items at G1
    • any export sales at label G2
    • the price of capital items you purchase for your business at label G10
    • the purchase of other non-stock items at label G11.

    Using the information in her records for the quarter, Maria fills in her calculation worksheet as follows:

    • her stock sales of $160,000 at G1 (Total sales including GST)
    • $115,200 (72% × $160,000) at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $44,800 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $4,072 at G9 (GST on sales: G8 divided by eleven: $44,800 ÷ 11)
    • her stock purchases of $121,140 at G11 (Non-capital purchases) and G12 (G10+G11). If she has purchased capital items for her business she includes that amount at G10
    • $94,489 (78% × $121,140) at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $26,651 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $2,422 at G20 (GST on purchases: G19 divided by eleven: $26,651 ÷ 11).

    Maria then copies the information from her calculation worksheet to Option 1 on the front of the GST section of her activity statement as follows:

    • her sales of $160,000 at G1 (Total sales)
    • crosses 'Yes' to indicate that the amount at G1 includes GST
    • $115,200 at G3 (Other GST-free sales)
    • her purchases of $121,140 at G11 (Non-capital purchases).

    On the back of the activity statement she fills in the Summary section as follows:

    • $4,072 at 1A (GST on sales) and 8A (Total)
    • $2,422 at 1B (GST on purchases) and 8B (Total).

    Maria would also fill in labels for any other obligations she has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Maria only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $1,650 at 9 (payment or refund amount).

    After filling in her activity statement, Maria lodges it and pays $1,650 by the due date. She does not lodge her calculation worksheet but keeps it with her records.

    Maria repeats the above steps for each quarter.

    Option 2: to pay or claim quarterly but lodge a report annually

    If Maria selects option 2 of GST reporting, she calculates her GST and pays or claims it quarterly but lodges a GST information report at the end of the financial year.

    Her quarterly sales ($160,000), purchases ($121,140) and calculation worksheet are the same as under option 1.

    Maria copies the information from her calculation worksheet to Option 2 on the front of the GST section of his activity statement as follows:

    • her sales of $160,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST.

    On the back of the activity statement she fills in the Summary section as follows:

    • $4,072 at 1A (GST on sales) and 8A (Total)
    • $2,422 at 1B (GST on purchases) and 8B (Total).

    Maria would also fill in labels for any other obligations she has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Maria only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $1,650 ($4,072 − $2,422) at 9 (payment or refund amount).

    After filling in her activity statement, Maria lodges it and pays $1,650 by the due date. She does not lodge her calculation worksheet with us but keeps it with her records.

    Maria repeats the above steps for each quarter.

    Maria prepares the following summary of her annual purchases and sales from the records she is required to keep under the snapshot method.

    Table: Maria's purchases and sales record for the whole year

     Quarter

     

    Purchases

    Sales

    Total

    GST-free

    GST-free %

    Total

    GST-free

    GST-free %

    Quarter 1

    $121,140

    $94,489

    78%

    $160,000

    $115,200

    72%

    Quarter 2

    $132,000

    $102,960

    78%

    $180,000

    $129,600

    72%

    Quarter 3

    $157,000

    $113,040

    72%

    $220,000

    $140,800

    64%

    Quarter 4

    $149,000

    $107,280

    72%

    $210,000

    $134,400

    64%

    Totals

    $559,140

    $417,769

     

    $770,000

    $520,000

     

    Maria worked out the GST-free percentages for her:

    • purchases from her two four-week snapshot periods in June–July (for quarters 1 and 2) and December-January (for quarters 3 and 4)
    • sales from her two two-week snapshot periods in June–July (for quarters 1 and 2) and December–January (for quarters 3 and 4).

    At the end of the financial year, Maria fills in the following labels on her annual GST information report:

    • $520,000 at G3 (Other GST-free sales)
    • $559,140 at G11 (Non-capital purchases).

    In this example, Maria does not have any export sales or capital purchases. If she did, she would also fill in labels G2 and/or G10.

    Maria must lodge her annual GST information report by the due date.

    Option 3: to pay a GST instalment amount

    Maria's purchases and sales for the first quarter are the same as for option 1; that is, her total quarter 1:

    • purchases are $121,140
    • sales are $160,000.

    Annual purchases and sales are the same as for option 2, that is, her annual:

    • purchases are $559,140
    • sales are $770,000.

    We advised Maria that her instalment amount is $2,299. Her activity statement for the first quarter shows this amount in Option 3 of the GST section at G21. Maria does not wish to vary this amount so in her activity statement for the first quarter she fills in this amount at 1A in the Summary section, with her total at 8A. She does not fill in 1B.

    Maria would also fill in labels for any other obligations she has. They may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Maria only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $2,299 at 9 (payment or refund amount).

    After filling in her activity statement, Maria lodges it and pays $2,299 by the due date. She repeats this process for each quarter.

    After the end of the financial year, Maria must lodge an annual GST return by the due date to account for any difference between her total instalments and her total GST liability for the year.

    Maria completes her calculation worksheet using details of her annual purchases and sales that are summarised from the records she must keep under the snapshot method as follows:

    • her stock sales of $770,000 at G1 (Total sales including GST). She would also include the sale of other non-stock items here if necessary
    • $520,000 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $250,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $22,727 at G9 (GST on sales: G8 divided by eleven: $250,000 ÷ 11)
    • her stock purchases of $559,140 at G11 (Non-capital purchases) and G12 (G10+G11). If she has purchased capital items for her business she includes that amount at G10
    • $417,769 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $141,371 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $12,851 at G20 (GST on purchases: G19 divided by eleven: $141,371 ÷ 11).

    Maria copies the information from her calculation worksheet to the front of her annual GST return as follows:

    • $770,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST
    • $520,000 at G3 (Other GST-free sales)
    • $559,140 at G11 (Non-capital purchases).

    On the back of her annual GST return in the Summary section she writes as follows:

    • $22,727 at 1A (GST on sales) and 2A (Total)
    • $12,851 at 1B (GST on purchases)
    • $9,196 ($2,299 × 4) at 1H (GST instalments)
    • $22,047 at 2B (1B+1D+1F+1H).

    She completes the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 2A is greater than 2B
    • $680 (2A − 2B) at 9 (payment or refund amount).

    The amount of $9,196 ($2,299 × 4) is the total of the GST instalments Maria has paid for the financial year. These are the amounts Maria has shown at 1A on her quarterly activity statement.

    As the amount at 2A (GST on sales) is greater than the amount at 2B (GST on purchases + instalments paid) Maria must pay the additional amount of $680 to us by the due date.

    Sales percentage method – worked example

    Anita owns a small supermarket. She resells most of her goods and only converts about 2% of items into taxable sales (mostly cooked chickens). She decides to use the sales percentage method to calculate her GST.

    Anita works out her sales for quarter 1:

    • total stock sales are $200,000
    • total GST-free sales are $60,000.

    From these figures Anita works out that 30% of her stock sales are GST-free. This means 30% of her purchases for that quarter will also be GST-free:

    • stock purchases are $100,000
    • total GST-free purchases are $30,000 (30% × $100,000).

    Anita examines her sales for each quarter and works out her GST-free percentages for each quarter are:

    • quarter 1 – 30%
    • quarter 2 – 35%
    • quarter 3 – 37%
    • quarter 4 – 32%.

    Anita works out that her:

    • annual sales are $900,000
    • annual purchases are $470,000
    • annual GST-free sales are $303,400
    • annual GST-free purchases are $158,750.

    The rest of the example shows what would happen if Anita selected:

    Option 1: to calculate GST and report quarterly (or monthly)

    If Anita uses option 1 of GST reporting, she needs to report and pay (or claim) her GST amounts each quarter. She uses the calculation worksheet method to work out her GST amounts.

    Using the information in her records for the quarter, Anita fills in her calculation worksheet as follows:

    • her stock sales of $200,000 at G1 (Total sales including GST)
    • $60,000 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $140,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $12,727 at G9 (GST on sales: G8 divided by eleven: $140,000 ÷ 11)
    • her stock purchases of $100,000 at G11 (Non-capital purchases) and G12 (G10+G11). If she has purchased capital items for her business she includes that amount at G10
    • $30,000 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $70,000 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $6,363 at G20 (GST on purchases: G19 divided by eleven: $70,000 ÷ 11).

    Anita then copies the information from her calculation worksheet to Option 1 on the front of the GST section of her activity statement as follows:

    • her sales of $200,000 at G1 (Total sales)
    • crosses 'Yes' to indicate that the amount at G1 includes GST
    • $60,000 at G3 (Other GST-free sales)
    • her purchases of $100,000 at G11 (Non-capital purchases).

    On the back of the activity statement she fills in the Summary section as follows:

    • $12,727 at 1A (GST on sales) and 8A (Total)
    • $6,363 at 1B (GST on purchases) and 8B (Total).

    Anita would also fill in labels for any other obligations she has. These may include pay as you go (PAYG) instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anita only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $6,364 at 9 (8A − 8B: payment or refund amount).

    After filling in her activity statement, Anita lodges it and pays $6,364 by the due date. She does not lodge her calculation worksheet but keeps it with her records.

    Anita repeats the above steps for each quarter.

    Option 2: to pay or claim quarterly but lodge a report annually

    If Anita selects option 2 of GST reporting, she calculates her GST and pays or claims it quarterly but lodges a GST information report at the end of the financial year.

    Anita's quarterly sales ($200,000) and purchases ($100,000) are the same as under option 1. Anita copies the information from her calculation worksheet to Option 2 of the GST section of her activity statement as follows:

    • her sales of $200,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST.

    On the back of the activity statement she fills in the Summary section as follows:

    • $12,727 at 1A (GST on sales) and 8A (Total)
    • $6,363 at 1B (GST on purchases) and 8B (Total).

    Anita would also fill in labels for any other obligations she has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anita only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $6,364 ($12,727 − $6,363) at 9 (payment or refund amount).

    After filling in her activity statement, Anita lodges it and pays $6,364 by the due date. She does not lodge her calculation worksheet but keeps it with her records.

    Anita repeats the above steps for each quarter.

    Anita prepares the following summary of her annual purchases and sales from the records she must keep under the sales percentage method.

    Anita's purchases and sales record for the whole year

     Quarter

     

    Purchases

    Sales

    Total

    GST-free (total purchases × GST-free %)

    GST-free %

    Total

    GST-free (total sales × GST-free %)

    Quarter 1

    $100,000

    $30,000

    30%

    $200,000

    $60,000

    Quarter 2

    $120,000

    $42,000

    35%

    $230,000

    $80,500

    Quarter 3

    $135,000

    $49,950

    37%

    $250,000

    $92,500

    Quarter 4

    $115,000

    $36,800

    32%

    $220,000

    $70,400

    Total

    $470,000

    $158,750

     

    $900,000

    $303,400

    At the end of the financial year, Anita fills in the labels on her annual GST information report as follows:

    • $303,400 at G3 (Other GST-free sales)
    • $470,000 at G11 (Non-capital purchases).

    In this example, Anita does not have any export sales or capital purchases. If she did, she would also fill in labels G2 and/or G10.

    Anita must lodge her annual GST information report by the due date.

    Option 3: to pay a GST instalment amount

    Anita's purchases and sales for the first quarter ($100,000 and $200,000 respectively) are the same as shown under option 1.

    Her annual purchases ($470,000) and sales ($900,000) are the same as shown under option 2.

    We advised Anita that her instalment amount is $6,530.

    This amount is shown at G21 in Option 3 in the GST section on the front of her activity statement for the first quarter. As she does not want to vary this amount she writes in $6,530 at 1A in the Summary section on the back of the activity statement.

    Anita would also fill in labels for any other obligations she has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anita only had GST obligations, she would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $6,530 at 9 (payment or refund amount).

    After filling in her activity statement, Anita lodges it and pays $6,530 by the due date. She repeats this process for each quarter.

    At the end of the financial year, Anita must lodge an annual GST return by the due date to account for any difference between her total instalments (an estimate) and her total GST liability for the year.

    Anita completes her calculation worksheet using details of her annual purchases and sales that are summarised from the records she must keep under the sales percentage method as follows:

    • her stock sales of $900,000 at G1 (Total sales including GST). She would also include the sale of other non-stock items here if necessary
    • $303,400 at G3 (Other GST-free sales) and G5 (G2+G3+G4)
    • $596,600 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $54,236 at G9 (GST on sales: G8 divided by eleven: $596,600 ÷ 11)
    • her stock purchases of $470,000 at G11 (Non-capital purchases) and G12 (G10+G11). If she has purchased capital items for her business she includes that amount at G10
    • $158,750 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $311,250 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $28,295 at G20 (GST on purchases: G19 divided by eleven: $311,250 ÷ 11).

    Anita copies the information from her calculation worksheet to her annual GST return as follows:

    • $900,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST
    • $303,400 at G3 (Other GST-free sales)
    • $470,000 at G11 (Non-capital purchases).

    On the back of her annual GST return in the Summary section she writes as follows:

    • $54,236 at 1A (GST on sales) and 2A (Total)
    • $28,295 at 1B (GST on purchases)
    • $26,120 ($6,530 × 4) at 1H (GST instalments)
    • $54,415 at 2B (1B+1D+1F+1H).

    She completes the 'Payment or refund?' section as follows:

    • cross 'No' to indicate that 2B is greater than 2A
    • $179 (2B − 2A) at 9 (payment or refund amount).

    You provide these details for the period you use option 3. In Anita's case, the period is the full financial year.

    Purchases snapshot method – Worked example

    Anil is a restaurant owner who only makes taxable sales. He decides to use the purchases snapshot method to calculate his GST-free purchases.

    First four-week sample period
    (applies to quarters 1 and 2)

    Second four-week sample period
    (applies to quarters 3 and 4)

    Anil takes a snapshot of his stock purchases for the sample period and finds that 70% of them are GST-free.

    Anil's records show the following for quarters 1 and 2 following this snapshot:

    • total stock purchases  
      • quarter 1: $65,000
      • quarter 2: $67,000
       
    • GST-free stock purchases  
      • quarter 1: 70% × $65,000 = $45,500
      • quarter 2: 70% × $67,000 = $46,900
       
    • GST credits for trading stock  
      • quarter 1: ($65,000 − $45,5000 = $19,500) × 1 ÷ 11 = $1,773
      • quarter 2: ($67,000 − $46,900 = $20,100) × 1 ÷ 11 = $1,827
       
    • total sales  
      • quarter 1: $110,000
      • quarter 2: $116,000
       
    • GST payable on sales  
      • quarter 1: 1 ÷ 11 × $110,000 = $10,000
      • quarter 2: 1 ÷ 11 × $116,000 = $10,545.
       

     

    When Anil takes another snapshot of his stock purchases for the second sample period, he notices some seasonal fluctuation. As a result, the new GST-free percentage of stock purchases is 68%.

    Anil's records show the following for quarters 3 and 4 following this second snapshot:

    • total stock purchases  
      • quarter 3: $74,000
      • quarter 4: $76,000
       
    • GST-free stock purchases  
      • quarter 3: 68% × $74,000 = $50,320
      • quarter 4: 68% × $76,000 = $51,680
       
    • GST credits for trading stock  
      • quarter 3: ($76,000 − $50,320 = $23,680) × 1 ÷ 11 = $2,153
      • quarter 4: ($74,000 − $51,680 = $24,320) × 1 ÷ 11 = $2,211
       
    • total sales  
      • quarter 3: $125,000
      • quarter 4: $129,000
       
    • GST payable on sales  
      • quarter 3: 1 ÷ 11 × $125,000 = $11,364
      • quarter 4: 1 ÷ 11 × $129,000 = $11,727.
       
     

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

    • annual stock purchases = $282,000
    • annual stock sales = $480,000
    • annual GST-free purchases = $194,400.

    The rest of the example shows what would happen if Anil selected:

    Option 1: to calculate GST and report quarterly (or monthly)

    If Anil uses option 1 of GST reporting, he needs to report and pay (or claim) his GST amounts each quarter.

    Using the information in his records for quarter 1, Anil completes the labels on his calculation worksheet as follows:

    • his stock sales of $110,000 at G1 (Total sales including GST)
    • $0 at G3 (Other GST-free sales)
    • $110,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $10,000 at G9 (GST on sales: G8 divided by eleven: $110,000 ÷ 11)
    • his stock purchases of $65,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • $45,500 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $19,500 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $1,773 at G20 (GST on purchases: G19 divided by eleven: $19,500 ÷ 11).

    Anil then copies the information from his calculation worksheet to Option 1 on the front of the GST section of his activity statement as follows:

    • his sales of $110,000 at G1 (Total sales)
    • crosses 'Yes' to indicate that the amount at G1 includes GST
    • $0 at G3 (Other GST-free sales)
    • his purchases of $65,000 at G11 (Non-capital purchases).

    On the back of the activity statement he fills in the Summary section as follows:

    • $10,000 at 1A (GST on sales) and 8A (Total)
    • $1,773 at 1B (GST on purchases) and 8B (Total).

    Anil would also fill in labels for any other obligations he has. These may include pay as you go (PAYG) instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anil only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $8,227 (8A − 8B) at 9 (payment or refund amount).

    After filling in his activity statement, Anil lodges it and pays $8,227 by the due date shown on the activity statement. He does not lodge his calculation worksheet but keeps it with his records.

    Anil repeats the above steps for each quarter.

    Option 2: to pay or claim quarterly but lodge a report annually

    If Anil selects option 2 of GST reporting, he calculates his GST and pays or claims it quarterly and lodges a GST information report at the end of the financial year.

    His quarterly sales ($110,000), purchases ($65,000) and calculation worksheet are the same as under option 1. Using the information on his calculation worksheet, Anil completes option 2 on the front of his activity statement as follows:

    • his sales of $110,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST.

    On the back of the activity statement he fills in the Summary section as follows:

    • $10,000 at 1A (GST on sales) and 8A (Total)
    • $1,773 at 1B (GST on purchases) and 8B (Total).

    Anil would also fill in labels for any other obligations he has. These may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anil only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $8,227 (8A − 8B) at 9 (payment or refund amount).

    After filling in his activity statement, Anil lodges it and pays $8,227 by the due date shown on the activity statement. He does not lodge his calculation worksheet; rather, he keeps it with his records.

    Anil repeats the above steps for each quarter.

    Anil prepares the following summary of his annual purchases and sales from the records he is required to keep under the purchases snapshot method:

    Anil's purchases and sales record for the whole year

     Quarter

    Purchases

    Sales

    Total

    GST-free

    GST-free %

    Total

    GST

    Quarter 1

    $65,000

    $45,500

    70%

    $110,000

    $10,000

    Quarter 2

    $67,000

    $46,900

    70%

    $116,000

    $10,545

    Quarter 3

    $74,000

    $50,320

    68%

    $125,000

    $11,364

    Quarter 4

    $76,000

    $51,680

    68%

    $129,000

    $11,727

    Total

    $282,000

    $194,400

     

    $480,000

    $43,636

    At the end of the financial year, Anil fills in the following labels on his annual GST information report:

    • $194,400 at G3 (Other GST-free sales)
    • $282,000 at G11 (Non-capital purchases).

    If he had any export sales or capital purchases he would also fill in boxes G2 and/or G10.

    Anil must lodge his annual GST information report by the due date.

    Option 3: to pay a GST instalment amount

    Anil's purchases and sales for the first quarter are the same as for option 1:

    • total purchases for quarter 1 = $65,000
    • total sales for quarter 1 = $110,000.

    Annual purchases and sales are the same as for option 2:

    • annual purchases = $282,000
    • annual sales = $480,000.
    Anil's purchases and sales record for the whole year

     Quarter

    Purchases

    Sales

    Total

    GST-free

    GST-free %

    Total

    Quarter 1

    $65,000

    $45,500

    70%

    $110,000

    Quarter 2

    $67,000

    $46,900

    70%

    $116,000

    Quarter 3

    $74,000

    $50,320

    68%

    $125,000

    Quarter 4

    $76,000

    $51,680

    68%

    $129,000

    Total

    $282,000

    $194,400

     

    $480,000

    We advised Anil that his GST instalment amount is $10,500. His activity statement for the first quarter shows this amount in Option 3 of the GST section at G21. As he does not want to vary this amount he writes in $10,500 at 1A and 8A in the Summary section on the back of the activity statement. He leaves 1B and 8B blank.

    Anil would also fill in labels for any other obligations he has. They may include PAYG instalments and PAYG withholding obligations. These amounts would also be recorded in the summary, and would result in a payment or refund.

    If Anil only had GST obligations, he would complete the 'Payment or refund?' section as follows:

    • cross 'Yes' to indicate that 8A is greater than 8B
    • $10,500 at 9 (payment or refund amount).

    After filling in his activity statement, Anil lodges it and pays $10,500 by the due date shown on the activity statement. He repeats this process for each quarter.

    After the end of the financial year, Anil must lodge an annual GST return by the due date to account for any difference between the total instalments he has paid and the amount of GST he is liable to pay for the year.

    Anil completes his calculation worksheet using a summary of his annual sales and purchases details. He obtains these figures from the records he is required to keep under the purchases snapshot method. He shows:

    • his stock sales of $480,000 at G1 (Total sales including GST). He would also include the sale of other non-stock items here if necessary
    • he would include any export sales at G2 but leaves G3 (Other GST-free sales) blank
    • $480,000 at G6 (Total sales subject to GST: G1 − G5) and G8 (G6+G7)
    • $43,636 at G9 (GST on sales: G8 divided by eleven: $480,000 ÷ 11)
    • his stock purchases of $282,000 at G11 (Non-capital purchases) and G12 (G10+G11). If he has purchased capital items for his business he includes that amount at G10
    • $194,400 at G14 (Purchases without GST in the price) and G16 (G13+G14+G15)
    • $87,600 at G17 (Total purchases subject to GST: G12 − G16) and G19 (G17+G18)
    • $7,964 at G20 (GST on purchases: G19 divided by eleven: $87,600 ÷ 11).

    Using the information on his calculation worksheet, Anil completes his annual GST return as follows:

    • $480,000 at G1 (Total sales)
    • cross 'Yes' to indicate that the amount at G1 includes GST
    • $0 at G3 (Other GST-free sales)
    • $282,000 at G11 (Non-capital purchases).

    On the back of his annual GST return in the Summary section he writes as follows:

    • $43,636 at 1A (GST on sales) and 2A (Total)
    • $7,964 at 1B (GST on purchases)
    • $42,000 ($10,500 × 4) at 1H (GST instalments)
    • $49,964 at 2B (1B+1D+1F+1H).

    He completes the 'Payment or refund?' section as follows:

    • cross 'No' to indicate that 2B is greater than 2A
    • $6,328 (2B − 2A) at 9 (payment or refund amount).

    You provide these details for the period you use option 3. In Anil's case, the period is the full financial year.

    Increasing adjustments if you revoke your election

    If you include a purchase in your trading stock purchases for a tax period and later revoke your election to use a SAM, you may need to make an increasing adjustment to the activity statement you completed while you were using the SAM. The increasing adjustment ensures you do not claim two GST credits for the same purchase.

    This could happen if you didn't have a tax invoice when you included the purchase in your trading stock purchases when using a SAM, but you received the tax invoice after you revoked the method and started claiming GST credits under the normal attribution rules.

      Last modified: 30 May 2017QC 16262