A New Tax System (Goods and Services Tax) Act 1999 Simplified GST Accounting Methods Determination (No. 1) 2004

Administered by Department of the Treasury

Legislation au F2005B02065 Not in force Legislative Instrument

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COMMONWEALTH OF AUSTRALIA

A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999

DETERMINATION

 

Under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999, I make the following determination:

 

Citation

  1. This determination may be cited as the A New Tax System (Goods and Services Tax) Act 1999 Simplified GST Accounting Methods Determination (No. 1) 2004.

 

Commencement and application

2.                   (1) This determination commences on 1 April 2004.

(2) This determination does not revoke or vary any previous determination made by the Commissioner or a delegate of the Commissioner.

(3) This determination applies in relation to net amounts for tax periods starting on or after 1 January 2004.

 

Defined terms

3.                   Some terms in this determination are shown in bold italics when first used. They are defined in clause 7.

4.                   Terms in this determination that are defined in the GST Act have the same meaning as in the GST Act.

 

Eligibility

5.                   A government entity may choose to use the simplified accounting method specified in clause 6 to calculate its net amount, in so far as the net amount relates to supplies and acquisitions made through a sub-entity of the government entity, if:

(a)                the government entity is a retailer; and

(b)               the government entity is registered; and

(c)                through the sub-entity, the government entity sells both taxable and GST‑free food at the same premises in the course or furtherance of carrying on the government entity’s enterprise; and

(d)               the sub-entity’s main activity is selling food and it mainly sells the food in an unchanged form; and

(e)                the sub-entity’s annual turnover would not exceed $1 million (if it were calculated as though the sub-entity were a separate entity); and

(f)                the sub-entity is located in a prison or other institution where people are lawfully detained; and

(g)               the sub-entity does not have point-of-sale equipment that can:

(i)      identify and record each separate supply as being GST-free or taxable; and

(ii)      identify and record the total amount of its GST-free sales and the total amount of its sales.

The government entity’s notice of its choice must specify the sub‑entities for which the government entity chooses to use the simplified accounting method.

 

Simplified Accounting Method

6. The simplified accounting method is, in working out the government entity’s net amount, either:

(a)                the GST payable by the government entity on the taxable supplies made through each sub-entity to which its choice applies must be estimated using method A; or

(b)               the GST payable by the government entity on the taxable supplies made through each sub-entity to which its choice applies, and the government entity’s entitlement to input tax credits on creditable acquisitions made through each of those sub-entities, must be estimated using method B.

The government entity’s notice of its choice must specify whether it chooses to use method A or method B. The government entity may not choose to use method A for some sub-entities and method B for other sub‑entities.

 

Definitions

7. In this determination:

four-week sample period means any continuous four-week period that occurs between either:

(a)                1 June - 31 July (to cover the tax periods that begin between the first day of that July and the last day of the following December inclusive); or

(b)               1 December - 31 January (to cover the tax periods that begin between the first day of that January and the last day of the following June inclusive).

GST Act means the A New Tax System (Goods and Services Tax) Act 1999.

method A is:

1. Record the total stock purchases for the sub-entity.

2. Record the total creditable stock purchases for the sub-entity.

3. Divide the total creditable stock purchases (2) by the total stock purchases (1) to calculate the percentage of creditable purchases.

4. Apply this percentage to the total sales made by the sub‑entity and then multiply by 1/11th to estimate the GST payable on those sales for the tax period.

method B is:

1. Record your total stock purchases for the sub-entity for a four-week sample period.

2. Record your total creditable stock purchases for the sub-entity for the four-week sample period.

3. Divide the total creditable stock purchases (2) by the total stock purchases (1) to calculate the percentage of creditable purchases.

4. Apply this percentage to the total stock purchases by the sub‑entity to estimate the creditable purchases for each of the tax periods covered by the four‑week sample period and then multiply by 1/11th to estimate the input tax credit entitlement on those purchases for each of those tax periods.

5. Apply the same percentage to the total sales by the sub‑entity for each of those tax periods and then multiply by 1/11th to estimate the GST payable on those sales for each of those respective tax periods.

sub-entity of an entity means an organisation that:

(a)                is part of the entity’s enterprise(s); and

(b)               is not a separate entity; and

(c)                is not registered; and

(d)               can be separately identified by reference to the nature of the activities carried on through the organisation or the location of the organisation.

 

Signed this 31st day of March 2004

 

 

 

 

 

Signed by Eileen Clancy

Assistant Deputy Commissioner

Goods and Services Tax Program

Delegate of the Commissioner

Overview

The A New Tax System (Goods and Services Tax) Act 1999 was enacted to introduce a Goods and Services Tax (GST) in Australia, replacing various forms of indirect taxation and creating a unified federal indirect tax system. The legislation was designed to address the need for a comprehensive and streamlined tax system that would simplify compliance and reduce the burden on businesses. The Act was enacted by the Parliament of Australia and its policy objective was to establish a modern and efficient tax framework that would enhance economic efficiency and support revenue generation for federal and state governments. The Simplified GST Accounting Methods Determination (No. 1) 2004, made under the authority of the Act, aims to provide eligible government entities with simplified methods to calculate their net GST amounts for certain sub-entities involved in the sale of food, particularly those located in prisons or other institutions where people are lawfully detained. This determination seeks to ease the compliance burden for these entities by allowing them to use simplified accounting methods for GST calculation, provided certain conditions are met.

Scope and Application

The A New Tax System (Goods and Services Tax) Act 1999 Simplified GST Accounting Methods Determination (No. 1) 2004 applies to government entities that meet specific criteria and wish to employ a simplified accounting method for calculating their net GST amounts. The Act applies to government entities that are registered, operate a sub-entity that sells both taxable and GST-free food in the same premises, and whose sub-entity's main activity is selling food in an unchanged form. The sub-entity must have an annual turnover not exceeding $1 million and be located in a prison or other institution where people are lawfully detained, and it must lack point-of-sale equipment that can distinguish between taxable and GST-free food sales. The simplified accounting method applies to net amounts for tax periods starting on or after 1 January 2004, without revoking or varying any previous determinations. The methods available under this determination are specified as method A and method B, which can be used for estimating GST payable on taxable supplies and input tax credits on creditable acquisitions. The methods are detailed in the determination and require the government entity to specify which method and which sub-entities the method applies to in its notice of choice.

Key Provisions

The A New Tax System (Goods and Services Tax) Act 1999 Simplified GST Accounting Methods Determination (No. 1) 2004 provides government entities with options for calculating their net amounts for goods and services tax (GST). Specifically, under clause 5, eligible government entities can choose to use a simplified accounting method to determine their net amount relating to supplies and acquisitions made through a sub-entity. This choice is available if the government entity is a retailer, is registered for GST, and sells both taxable and GST-free food through a sub-entity, among other criteria (section 5). The simplified accounting method allows the government entity to estimate the GST payable on taxable supplies made through the sub-entity, or both the GST payable and the entitlement to input tax credits on creditable acquisitions (section 6). The government entity must select either method A or method B for all applicable sub-entities and cannot use both methods concurrently. Method A involves calculating the GST payable based on the total stock purchases and sales of the sub-entity, while method B requires a more detailed analysis, using a four-week sample period to estimate the GST payable and input tax credits (section 6 and clause 7). To comply with this determination, the government entity must notify the Commissioner of their choice of method and the specific sub-entities to which the chosen method applies (section 6). The determination provides detailed instructions on how to apply each method, including recording stock and creditable stock purchases and applying the calculated percentages to estimate GST payable and input tax credits (clause 7). Failure to comply with the requirements of this determination may result in penalties. Although the determination does not explicitly state penalties, non-compliance with GST obligations generally can result in civil or criminal penalties under the A New Tax System (Goods and Services Tax) Act 1999. Civil penalties can include fines and interest on unpaid GST, while criminal penalties may include imprisonment, particularly for wilful or persistent non-compliance. The specific penalties and consequences will depend on the nature and extent of the non-compliance.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.