{"id":"F2016L01534","name":"Goods and Services Tax: Simplified Accounting Method Determination (No. 38) 2016 for Restaurants, Cafes and Caterers – purchases snapshot method","slug":"goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":95193,"registerId":"commonwealth-F2016L01534-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Goods and Services Tax: Simplified Accounting Method Determination (No. 38) 2016 for Restaurants, Cafes and Caterers – purchases snapshot method","content":"Legislative Instrument\n\nGoods and Services Tax: Simplified Accounting Method Determination (No.38) 2016 for Restaurants, Cafes and Caterers – purchases snapshot method\n\nI, Deborah Jenkins, Acting Deputy Commissioner of Taxation, make this determination under subsection 123-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).\n\nDeborah Jenkins\n\nActing Deputy Commissioner of Taxation\n\nDated: 13/09/2016\n\nName of determination\n\n    This determination is the Goods and Services Tax: Simplified Accounting Method Determination (No. 38) 2016 for Restaurants, Cafes and Caterers – purchases snapshot method.\n\nCommencement\n\n    2. This determination commences the day after registration.\n\nRepeal of previous determination\n\n    3. A New Tax System (Goods and Services Tax) Act 1999 Simplified Accounting Method Determination (No. 1) 2006 (the previous determination) - F200L02632, registered on 9 August 2006, is repealed on commencement of this determination.\n\nDetermination (Which entities are covered by this determination?)\n\n4. An entity may choose to use the simplified accounting method (SAM) in Clause 5 to work out its input tax credits for acquisitions of trading stock for a tax period if:\n\n(a) it is registered for GST throughout the tax period; and\n\n(b) during the tax period, it operated a restaurant, café or catering business; and\n\n(c) its GST turnover does not exceed the small enterprise turnover threshold.\n\nNote: This method can be used irrespective of whether the entity has adequate or inadequate point-of-sale equipment.\n\nMethod\n\n5. The steps for this SAM are as follows:\n\n(1) Choose a sample period\n\n(a) For each financial year, select a continuous four\\-week sample period during 1 June to 31 July, and select another continuous four-week sample period during 1 December to 31 January. For each sample period, record the amounts and the GST status of the entity’s trading stock purchases.\n\nNote: Two new calculations of the GST-free percentage must be done (about every six months) to calculate the amount of GST-free trading stock for the tax period(s) in each financial year.\n\n(b) For an existing business that starts to use this SAM where the start date is not from 1 June to 31 July or from 1 December to 31 January, the first sample period can be either:\n\n(i) a continuous four-week period in the tax period in which the entity starts to use the SAM, or\n\n(ii) a continuous four-week period during either 1 June to 31 July or 1 December to 31 January, whichever has just elapsed.\n\n(c) If the entity starts its business part way through the financial year, the first sample period must be in the first two months of trading.\n\nNote: “first two months of trading” means the first two months where the entity started selling food to its customers.\n\n(2) Work out the amount of trading stock purchased during each sample period\n\nCalculate the amount of trading stock that the entity purchased during each sample period in 5(1) using one of the following methods:\n\n(a) If the entity accounts on a cash basis, the amount is the total consideration the entity provides during the sample period for trading stock purchases.\n\n(b) If the entity does not account on a cash basis, the amount is the total price of trading stock for which the earlier of the following occurs during the sample period:\n\n the entity provides any of the consideration; or\n\n an invoice was issued for the acquisition.\n\n(3) Work out the percentage of GST-free trading stock purchases for the sample period\n\n(a) From the amount of trading stock calculated at 5(2), determine the amount which relates to GST-free acquisitions.\n\n(b) Divide the total amount of GST-free acquisitions from 5(3)(a) by the total trading stock acquisitions from 5(2) and express the result as a percentage. This is the percentage of the entity’s GST-free trading stock that it purchased for the sample period.\n\n(4) Work out the input tax credits the entity can claim for each tax period using the GST-free trading stock purchases percentage\n\n(a) Calculate the amount of trading stock that the entity purchased during a tax period by using one of the following methods:\n\n(i) If the entity accounts on a cash basis, the amount is the total consideration the entity provides during the tax period for trading stock purchases.\n\n(ii) If the entity does not account on a cash basis, the amount is the total price of any trading stock for which the earlier of the following occurs during the tax period:\n\n the entity provides any of the consideration; or\n\n an invoice was issued for the acquisition.\n\n(b) The amount of GST-free trading stock for each tax period is calculated as follows:\n\n(i) GST-free trading stock purchases for tax periods in July to December are calculated by multiplying the percentage of GST-free trading stock from the sample period during 1 June to 31 July (of the same calendar year) worked out in 5(3)(b) with the amount of trading stock the entity purchased in each tax period worked out in 5(4)(a);\n\n(ii) GST-free trading stock purchases for tax periods in January to June is calculated by multiplying the percentage of GST-free trading stock from the sample period during 1 December to 31 January (of the same financial year) worked out in 5(3)(b) with the amount of trading stock the entity purchased in each tax period worked out in 5(4)(a);\n\n(iii) If the entity’s tax period is a financial year then add the amounts of GST-free trading stock from:\n\n(1) July to December, calculated by multiplying the percentage of GST-free trading stock from the sample period 1 June to 31 July (of the same calendar year) worked out in 5(3)(b) to with the amount of trading stock the entity purchases from July to December worked out in 5(4)(a); and\n\n(2) January to June, calculated by multiplying the percentage of GST-free trading stock from the sample period 1 December to 31 January (of the same financial year) worked out in 5(3)(b) with the amount of trading stock the entity purchases from January to June worked out in 5(4)(a).\n\n(c) For each tax period, subtract the amount worked out at 5(4)(b) from the amount worked out at 5(4)(a).\n\n(d) Multiply the amount worked out at 5(4)(c) by 1/11th. This is the entity’s input tax credit entitlement for the trading stock acquisitions for the tax period. The entity’s net amount for the tax period is otherwise worked out in accordance with Division 17 of the GST Act.\n\n6. If:\n\n a creditable acquisition has been included in paragraph 5(4)(a) for a tax period; and\n\n the entity’s GST return for a subsequent tax period (where you are not using the method specified in this determination) includes an input tax credit for an acquisition covered by paragraph 5(4)(a) for an earlier tax period;\n\nthen the entity’s net amount for that earlier tax period is increased by the amount of that credit.\n\n7. The entity does not need to hold a tax invoice for an acquisition for it to be included in the calculation of its input tax credit entitlement for trading stock purchases for a tax period whilst using the method specified in this determination.\n\nDefinitions\n\n8. Expressions used in this determination have the same meaning as in the GST Act.","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":5,"scope_assessment":{"changed":true,"description":"This instrument repeals the 2006 SAM determination (clause 3) and re-establishes a purchases-snapshot SAM that applies to GST-registered entities operating restaurants, cafés or catering businesses with GST turnover at or below the small enterprise threshold (clause 4). The instrument itself restates the covered categories and procedural method; it does not, within its text, set out line-by-line differences from the repealed determination, so the change is formally the repeal and replacement while the stated covered cohort is the same in this instrument."},"complexity_factors":["Sampling windows and timing rules: two separate continuous four-week sample periods each year with special start rules for new or part-year businesses (clause 5(1)(a)–(c)).","Different measurement bases for trading stock purchases depending on accounting method (cash basis v. non-cash) (clauses 5(2) and 5(4)(a)).","Two-stage percentage calculation and application: compute GST-free percentage for each sample then apply it to half-year tax periods (clauses 5(3) and 5(4)(b)).","Aggregation rules for entities whose tax period is a financial year require combining July–December and January–June calculations (clause 5(4)(b)(iii)).","Adjustment mechanism when credits are later claimed under a different method increases the earlier tax period net amount (clause 6).","Recordkeeping and evidentiary change: inclusion of acquisitions in the SAM calculation does not require holding a tax invoice (clause 7), shifting documentary proof rules.","Simple mathematical conversion to input tax credit using the 1/11th fraction after allocation (clause 5(4)(d)).","Formal repeal of the prior 2006 determination on commencement (clause 3) — administrative transition risk for entities shifting methods."],"plain_english_summary":"This instrument sets a simplified accounting method (the “purchases snapshot” SAM) for calculating GST input tax credits on trading stock for restaurants, cafés and catering businesses. It replaces an earlier 2006 determination and applies to GST-registered entities whose GST turnover does not exceed the small enterprise threshold.\n\nIt works by having the business sample two four-week purchase periods each year, calculate the percentage of GST-free stock in those samples, and apply those percentages to each tax period’s purchases to work out input tax credits; it changes record‑keeping and allocation timing."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"This is a straightforward replacement determination that maintains the same scope as its predecessor (Simplified Accounting Method Determination No. 1 of 2006). It continues to serve the same narrow purpose: providing a simplified GST calculation method specifically for restaurant, café and catering businesses. The determination has not expanded beyond its original intent of reducing compliance burden for small food service entities through snapshot sampling methods."},"complexity_factors":["Nested conditional logic in Clause 5 with multiple sub-clauses (5(1) through 5(4)) containing further nested sub-paragraphs (i, ii, iii) and sub-sub-paragraphs","Dual accounting system requirements - different calculation rules for cash basis vs non-cash basis entities appearing in both 5(2) and 5(4)(a)","Temporal complexity with six different timing scenarios: standard financial year, mid-year business starts, mid-year method adoption, and annual tax period variants","Cross-references to external legislation including Division 17 of the GST Act and the undefined 'small enterprise turnover threshold'","Mathematical formula chain requiring five sequential calculations (sample selection → purchase calculation → percentage calculation → application → credit calculation)","Anti-overlap provision in Clause 6 requiring tracking of credits across subsequent tax periods when switching methods","Implicit definitions requiring knowledge of GST Act terminology including 'creditable acquisition', 'net amount', 'consideration', and 'input tax credits'"],"plain_english_summary":"This rule lets small restaurants, cafés and caterers (GST-registered with turnover under $10M) use a simplified “snapshot” method to estimate GST credits on food purchases. Instead of tracking every invoice year-round, they record purchases during two four-week periods (one in winter, one in summer) to derive percentages that are applied across the year, reducing paperwork and suiting businesses without detailed POS systems. It works for cash or accrual accounting."}},"importantCases":[],"_links":{"self":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a","history":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a/history","analysis":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a/analysis","conflicts":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a/conflicts","importantCases":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a/important-cases","documents":"/api/acts/goods-and-services-tax-simplified-accounting-method-determination-no-38-2016-for-restaurants-cafes-a/documents"}}