A New Tax System (Goods and Services Tax) Act 1999 Simplified GST Accounting Methods Determination (No. 28) 2015

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Legislation au F2015L01578 Not in force Legislative Instrument

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Goods and Services Tax: Simplified GST Accounting Methods Determination (No. 28) 2015

 

Explanatory Statement

 

General Outline of Instrument

  1. This determination is made under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999.
  2. This determination replaces the A New Tax System (Goods and Services Tax) Simplified Accounting Method Determination (No. 1) 2004 (the previous instrument). 
  3. The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

Date of effect

4.        The instrument commences on the day after registration.

5.        The instrument does not apply retrospectively.

 

What is this instrument about:

6.        Division 123 of the GST Act allows the Commissioner to determine a Simplified Accounting Method (SAM) for particular retailers and small enterprise entities. This determination sets out a SAM for eligible government entities. 

7.        The SAM contained in the determination will facilitate the quick and simple calculation by eligible government entities of their net amounts by using either a simplified accounting method A or method B, that is:

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.

8.        The two methods are described below:

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

2)   Record the 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.

 

What is the effect of this instrument?

9.        This instrument will allow eligible government entities to adopt a SAM that will reduce their costs to comply with the GST legislation

10.    Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.

 

Background:

11. This instrument replaces A New Tax System (Goods and Services Tax) Simplified Accounting Method Determination (No. 1) 2004. The replaced instrument is repealed on the commencement of this determination.

 

Consultation:

12. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate.  One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law. 

13.      Because there is no substantive change from the previous instrument therefore the instrument is considered minor or machinery in nature.

14.      As such, no further consultation has been undertaken in the development of this instrument.

 

 

James O’Halloran

Deputy Commissioner of Taxation

15 September 2015

 

 

 

 

 

Statement of Compatibility with Human Rights

 

This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 28) 2015

 

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

This Legislative Instrument provides that government entity may choose to use the simplified accounting method specified in clause 6 of the legislative instrument 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 and satisfies all the requirements in the legislative instrument. 

 

Human rights implications

This instrument does not engage any of the applicable rights or freedoms.  It allows eligible government entities to adopt a simplified accounting method that will reduce their costs of complying with the GST legislation.

 

Conclusion

This instrument is compatible with human rights as it does not raise any human rights issues.

 

Overview

The Goods and Services Tax: Simplified GST Accounting Methods Determination (No. 28) 2015 was enacted under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 by the Australian Parliament. The purpose of this legislative instrument is to provide eligible government entities with a streamlined method for calculating their net GST amounts, thereby addressing the need for a simpler and more cost-effective accounting process for GST compliance. The determination introduces two simplified methods, A and B, which facilitate quicker and less complex calculations for government entities, ultimately reducing the administrative burden and costs associated with GST compliance. This instrument is designed to be minor or machinery in nature, with minimal impact on compliance costs, and does not require further consultation as it does not substantially alter the existing GST legislation.

Scope and Application

The Goods and Services Tax: Simplified GST Accounting Methods Determination (No. 28) 2015 provides a framework for eligible government entities to use a simplified accounting method (SAM) for calculating their net GST amounts. This legislative instrument, made under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999, aims to facilitate the quick and simple calculation of GST payable on taxable supplies and input tax credits for eligible government entities. This determination allows these entities to choose between two methods: method A, which estimates GST payable based on total stock purchases and sales, and method B, which estimates both GST payable and input tax credit entitlements using a four-week sample period. The instrument does not apply retrospectively and is designed to reduce compliance costs for these entities. It is a minor legislative instrument that does not require further consultation due to its nature and lack of substantive changes from the previous instrument, the A New Tax System (Goods and Services Tax) Simplified Accounting Method Determination (No. 1) 2004, which is repealed upon the commencement of this determination.

Key Provisions

The Goods and Services Tax: Simplified GST Accounting Methods Determination (No. 28) 2015 provides two simplified accounting methods (SAMs) for eligible government entities to use when calculating their net GST amounts. Method A allows government entities to estimate their GST payable on taxable supplies by applying a percentage derived from their creditable stock purchases to their total sales and then multiplying by 1/11th. Method B involves a more detailed estimation process where the percentage is applied to both creditable purchases and total sales over a four-week sample period, again multiplied by 1/11th. These methods are intended to simplify the accounting process for government entities and reduce compliance costs. Eligible government entities must adhere to the requirements set forth in the determination when choosing to use either Method A or Method B. This includes recording total stock purchases and creditable stock purchases for the relevant period, calculating the percentage of creditable purchases, and applying this percentage to estimate GST payable or input tax credit entitlements. These calculations must be conducted for each sub-entity to which the government entity’s choice applies. There are no specified offences or penalties directly associated with this determination. However, any failure to comply with the GST Act, including the use of these simplified methods, could result in civil or criminal penalties as prescribed elsewhere in the GST Act. For instance, providing false or misleading statements could lead to fines or imprisonment, depending on the severity of the breach. The instrument is designed to be minor in nature, meaning it does not substantially change existing law and does not require extensive consultation. As such, it is considered a minor legislative instrument under the Legislative Instruments Act 2003. The instrument also aligns with human rights as it does not engage any of the applicable rights or freedoms, facilitating easier compliance without infringing on any recognised human rights.

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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.