Issue
Can the entity, a restaurant, choose to apply a simplified accounting method for retailers under subsection 123-10(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Decision
No, the entity cannot choose to apply a simplified accounting method for retailers under subsection 123-10(1) of the GST Act.
Facts
The entity is a restaurant. The entity does not sell GST-free food. The entity is registered for goods and services tax (GST).
Reasons for Decision
Subsection 123-10(1) of the GST Act provides that an entity may choose to apply a simplified accounting method if it is a retailer of the kind to whom the method is available.
The Commissioner has determined in writing (as per section 123-5 of the GST Act), the eligibility criteria that must be satisfied by food retailers wanting to use a simplified accounting method. This written determination is found in 'Simplified GST Accounting Methods for Food Retailers'.
This document provides that to be eligible to use a simplified accounting method for food retailers, an entity must: • be registered for GST; and • be a retailer who sells both taxable and GST-free food from the same premises; and • have an annual turnover of less than $2 million; and • not have adequate point of sale equipment to identify and record its mix of taxable and GST-free supplies.
The entity does not sell both taxable and GST-free food. Therefore, the entity is not able to choose to apply a simplified accounting method for food retailers under subsection 123-10(1) of the GST Act.