# ACC-0001 response

## Answer

For a tax invoice of $1,100 including GST at the standard rate of 10%:

- **(a) GST amount included:** **$100**
- **(b) GST-exclusive price:** **$1,000**

## Working

Under Australia's GST system, the standard rate is 10%, applied to the GST-exclusive price. A GST-inclusive total therefore represents 110% (1.10) of the GST-exclusive price.

**GST-exclusive price:**

$$\text{GST-exclusive} = \frac{\text{GST-inclusive total}}{1.10} = \frac{1{,}100}{1.10} = 1{,}000$$

**GST amount:**

The standard ATO shortcut is to divide the GST-inclusive total by 11:

$$\text{GST} = \frac{\text{GST-inclusive total}}{11} = \frac{1{,}100}{11} = 100$$

Equivalently, GST = total − GST-exclusive price = $1,100 − $1,000 = $100.

**Check:** $1,000 (exclusive) + $100 (GST) = $1,100 (inclusive). ✓

## Approach

This is a standard reverse-GST calculation. Australian GST is 10% of the GST-exclusive price, so a GST-inclusive figure is 11/10 of the base. To recover the components from an inclusive total: divide by 11 to get the GST, and divide by 1.1 (or subtract the GST) to get the exclusive price. The "divide by 11" rule is the ATO's standard method for extracting GST from a GST-inclusive amount.