Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods

Administered by Department of the Treasury

Legislation au F2017L01274 In force Legislative Instrument

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Explanatory Statement

 

Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods

 

General outline of determination

  1. The determination is made under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act).
  2.                Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any determination of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such determination.
  3.                The determination provides eligible retailers with the choice to use a simplified accounting method (SAM) to help work out their net amount by estimating the proportion of their sales and purchases of trading stock that are GST-free.
  4.                The determination is a legislative instrument for the purposes of the Legislation Act 2003.

 

Date of effect

5.                  The determination commences on the day after registration.

 

What is the determination about?

6.                  Division 123 of the GST Act allows the Commissioner to create SAMs that some retailers and small enterprise entities can choose to apply with a view to reducing their costs of complying with the requirements of GST.

7.                  Retailers that sell food that is subject to GST and food that is GST-free may find it time consuming and costly to identify GST-free sales of trading stock (referred to as GST-free trading sales in the determination) and GST-free purchases of trading stock (referred to as GST-free trading acquisitions in the determination) without adequate point-of-sale equipment[1]. The Commissioner has made the determination to create three SAMs to assist eligible retailers to estimate their GST-free trading sales and/or GST-free trading acquisitions. They are:

(a)   the business norms method;

(b)   the stock purchases methods; and

(c)    the snapshot methods.

8.        The business norms method allows eligible retailers of food to estimate the proportion of their sales and purchases that are GST-free for a tax period by applying business norms percentages to their total trading sales and trading stock acquisitions.

9.        The stock purchases methods allow eligible food retailers that are resellers to estimate their GST-free trading sales and, in some case, GST-free trading acquisitions by using information relating to their GST-free trading acquisitions under one of these three methods: 

(a)   “every tax period” method;

(b)   “two sample periods” method; and

(c)    “5% GST-free stock estimation basis” method.

 

10.    The snapshot methods are similar to the stock purchases methods but it applies to both resellers and converters. It allow eligible food retailers to estimate their GST-free trading sales and GST-free trading acquisitions by using one of these three methods:

(a) “two sample periods” method;

(b) “every tax period” method; and

(c) “5% GST-free stock estimation basis” method.

 

11.    Retailers are only eligible to choose a SAM under the determination if they:

(a)  sell food that is subject to GST and food that is GST-free from the same premises;

(b)   have a SAM turnover[2] that is $2 million or less;

(c)    do not have adequate point-of-sale equipment; and

(d)   satisfy the requirements for that particular SAM. 
 

Background

12.  The determination replaces Simplified GST Accounting Methods Legislative Instrument (No. 1) 2007 F2007L02577 (the previous determination). The previous determination is repealed on commencement of the determination.

13.              The determination is substantially the same as the previous determination. It corrects some minor errors and clarifies a number of matters. If you were eligible to use a particular SAM specified in the previous determination, you will continue to be eligible to use that SAM under the determination.

 

What is the effect of this determination

14.  Eligible retailers that choose to use a particular SAM set out in the determination do not have to work out the actual GST-free trading sales and/or GST-free trading acquisitions that they make. They can estimate their GST-free trading sales and GST-free trading acquisitions for each tax period by using one of the SAMs.

15.  Compliance Cost Impact: Minor – There will be no or minimal impacts for both implementation and ongoing compliance costs. The determination simply continues the policy in the previous determination.

 

Consultation:

16.              Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the Commissioner is satisfied that appropriate and reasonably practicable consultation has been undertaken.

17.              Broad consultation was undertaken. Drafts of the determination and explanatory statement were published on the ATO Legal database at ato.gov.au seeking feedback and comments for a period of two weeks. Tax professionals, tax associations and legal publishers regularly review the Legal database. Additionally, consultation on the drafts of the determination and explanatory statement was also announced on 'What we are consulting about' at ato.gov.au. No comments were received by the due date.

18.              Targeted consultation was also undertaken with key stakeholders including the Pharmacy Guild of Australia, Pharmaceutical Society of Australia, the Department of Health, National Retail Association of Australia and Australian Retailers Association.  Feedback received assisted with the update of the determination.  

 

Legislative references:

A New Tax System (Goods and Services Tax) Act 1999

Acts Interpretation Act 1901

Legislation Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

National Health Act 1953 


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: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods

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 eligible food retailers with a choice of using a simplified accounting method to help them to work out their net amount. It does so by allowing them to estimate their GST-free trading sales and GST-free trading stock acquisitions for a tax period.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms as it is considered to be minor or machinery in nature and does not substantially change the law.

 

Conclusion

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

[1] This term is defined in section 8 of the determination.

[2] This term is defined in section 8 of the determination.

 

Overview

The Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods was enacted under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999. This determination aims to provide eligible food retailers with the flexibility to use simplified accounting methods (SAMs) to estimate the proportion of their sales and purchases of trading stock that are GST-free. This is particularly beneficial for retailers who may find it time-consuming and costly to identify GST-free sales and purchases without adequate point-of-sale equipment. The three methods provided are the business norms method, the stock purchases methods, and the snapshot methods, each tailored to assist retailers in managing their GST obligations more efficiently. This legislative instrument, developed under the authority of the Legislation Act 2003, seeks to reduce compliance costs and administrative burdens for eligible retailers.

Scope and Application

The Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods, made under the A New Tax System (Goods and Services Tax) Act 1999, is designed to assist eligible retailers in determining their net GST liability more efficiently. The determination allows eligible retailers to use simplified accounting methods (SAMs) to estimate their GST-free trading sales and acquisitions of trading stock, rather than accounting for these transactions individually. Eligible retailers are those who sell both GST-inclusive and GST-free food from the same premises, have a SAM turnover of $2 million or less, lack adequate point-of-sale equipment, and meet the specific requirements for the chosen SAM. The three available methods are the business norms method, the stock purchases method, and the snapshot method, each catering to different operational needs and structures of the retailers. The determination applies to retailers across Australia and is a legislative instrument under the Legislation Act 2003. It supersedes the previous Simplified GST Accounting Methods Legislative Instrument (No. 1) 2007 while maintaining the same policy intent with minor corrections and clarifications.

Key Provisions

The Goods and Services Tax: Simplified Accounting Methods Determination 2017 for Retailers who sell Food – Business Norms, Stock Purchases and Snapshot Methods (the Determination) provides eligible food retailers with the choice of using a simplified accounting method (SAM) to work out their net amount by estimating the proportion of their sales and purchases of trading stock that are GST-free (section 6). This is achieved by offering three distinct methods: the business norms method (section 8), the stock purchases methods (section 9), and the snapshot methods (section 10). These methods allow eligible retailers to estimate their GST-free trading sales and/or GST-free trading acquisitions, instead of calculating the actual GST-free trading sales and/or GST-free trading acquisitions. Retailers are only eligible to choose a SAM under the Determination if they meet certain criteria (section 11). These criteria include selling food that is subject to GST and food that is GST-free from the same premises, having a SAM turnover of $2 million or less, not having adequate point-of-sale equipment, and satisfying the requirements for the particular SAM they wish to use. The Determination replaces the Simplified GST Accounting Methods Legislative Instrument (No. 1) 2007 and is substantially the same as the previous Determination, with minor corrections and clarifications. The Determination imposes certain obligations on eligible retailers who choose to use a SAM. They must ensure that they meet the eligibility criteria (section 11) and that they apply the chosen SAM correctly and consistently for each tax period. The Determination also requires retailers to maintain records and documentation to support their estimates under the chosen SAM. The Commissioner of Taxation may require these records and documentation for review and audit purposes. Failure to comply with the Determination or the GST Act may result in penalties and consequences. The GST Act provides for various penalties and enforcement measures for non-compliance, including fines, interest on unpaid GST, and criminal prosecution for serious or repeated breaches. The maximum penalties for GST-related offences can vary depending on the nature and severity of the offence. However, the Determination itself does not specify any specific penalties or consequences for non-compliance with its provisions. Instead, it relies on the general penalties and enforcement measures provided under the GST Act.

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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.