I run a café — do I really have to check the GST on every single stock invoice?

Friday's deliveries are on the bench: a case of soft drink, twenty kilos of rice, cooking oil, napkins, coffee beans, cling film. Some of those invoices carry GST and some don't, and every quarter someone in the family sits down to work out which is which before the BAS goes in. If nobody does it carefully, the GST credits on that BAS are a guess — and a guess is exactly what the ATO can ask you to justify.

There is an official shortcut, it has existed for years, and plenty of small restaurant and café owners have never been told about it. It's worth understanding this month, because the legal instrument it lives in has a date on it: 1 October 2026.

What the method actually does

It's called a simplified accounting method — a SAM — and the one built for this industry is the purchases snapshot method. Division 123 of the GST Act lets the Commissioner determine these methods for retailers who sell food, and the ATO's explanation of why this one exists is worth quoting plainly: restaurants, cafés and catering businesses commonly buy trading stock that is a mixture of taxable and GST-free goods, they make numerous low-value purchases, and identifying the GST status of every purchase in every tax period 'can create a disproportionate compliance burden' for a business without the inventory systems, software or staff to do it.

So instead of classifying every invoice, you classify four weeks of them. You work out what proportion of your trading stock purchases in a four-week sample period was GST-free, then apply that proportion to your total trading stock purchases for each tax period until the next sample. Your GST credits on stock are one-eleventh of what remains after the estimated GST-free portion comes out. Two sample periods a financial year.

Note what it doesn't cover. The method applies only to trading stock purchases — rent, equipment, professional fees and everything else are worked out under the normal rules, and so is the GST on your sales. That's deliberate: as the ATO puts it, very few if any sales by a restaurant or café are likely to be GST-free, so the sales side was never the hard part. It's the shopping that's messy.

Who is eligible

Three conditions, all of which have to hold. You must be registered for GST throughout the tax period. The business must be a restaurant, a café or a catering business during that tax period — this method is available to those three only; supermarkets, grocers and bakeries have their own. And your GST turnover must not exceed the small enterprise turnover threshold of $2 million.

One practical filter sits behind that: the method is for businesses that buy both taxable and GST-free food. If effectively everything you buy carries GST, there is nothing to estimate.

The sample period, and the dates most people miss

The windows are fixed. For tax periods falling between 1 July and 31 December, you take any continuous four-week period between 1 June and 31 July of that year. For tax periods between 1 January and 30 June, you take a four-week period between 1 December and 31 January. Each sample should be typical of your stock buying — sampling the four weeks you were closed for renovations produces a percentage you then live with for six months.

There is a way in mid-year. A new business can use a four-week period within its first two months of trading, and an existing business that starts using the method partway through the year — which is what starting in September looks like — can take a four-week period during the tax period in which it starts. That percentage then applies until the earlier of 30 June or 31 December.

One genuinely useful consequence: under this method you don't have to hold tax invoices for your trading stock purchases in order to calculate those GST credits. You must still keep records — receipts and invoices explaining how you worked the figure out. It removes the classification work, not the paperwork.

You have to tell the ATO, and you're in for a year

This is not something you can quietly switch on in your bookkeeping software. If you decide to use a SAM you must notify the ATO of which method you're using — there is a form, 'Election to use a simplified GST accounting method' — and the choice takes effect from the start of the tax period stated on your notice.

Then it locks. You can only use one SAM at a time. You can only revoke your choice after using it for at least 12 months, and once you stop you can't choose a different SAM for another 12 months. If you stop meeting a condition — turnover passes $2 million, say — you must stop using the method from the start of the next tax period and tell the ATO.

The other misconception costs more often: people assume the sample percentage covers sales as well, and stop thinking about GST-free items altogether. It doesn't. GST on sales is worked out normally, and food classification is its own maze — bread rolls are GST-free, but not when eaten in a restaurant, and hot takeaway food is taxable. The ATO keeps a food and beverage search tool and a detailed food list for exactly that.

Why 1 October 2026 matters

The purchases snapshot method currently sits in the Goods and Services Tax: Simplified Accounting Method Determination (No. 38) 2016 for Restaurants, Cafes and Caterers, registered in September 2016. Like all legislative instruments it has a sunset date, and that date is 1 October 2026.

On 3 August 2026 the ATO published a draft replacement, LI 2026/D19 — the A New Tax System (Goods and Services Tax) (Simplified Accounting Method for Restaurants, Cafes and Caterers) Determination 2026 — which repeals and replaces the 2016 instrument and, in the explanatory statement's words, 'has the same substantive effect'. Consultation closed on 28 August 2026, and as at 7 September 2026 the final version had not yet appeared on the Federal Register of Legislation. For a business already using the method this reads as housekeeping rather than a change of direction; the ATO remade the equivalent method for supermarkets and convenience stores the same way in September 2025.

This is general information current as at September 2026, not advice about your business. Whether the purchases snapshot method is worth electing into depends on how much of your stock is genuinely GST-free, whether your point-of-sale and accounting setup already sorts it, and whether a 12-month commitment suits where your turnover is heading. If your books already produce an accurate split invoice by invoice, this method saves you nothing.

If they don't — if the GST credits on the BAS are really an estimate nobody could defend — then this is the difference between a number you made up and one the Commissioner has authorised in writing. Working out which side of that line a food business sits on, and lodging the election properly if it's worth doing, is the kind of thing our companies, trusts and bookkeeping service handles.