# ACC-0001 - GST on a $1,100 tax invoice (FY2025-26)

*This is a benchmarking hypothetical, not tax advice.*

## Answer

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

## Working

In Australia, GST is levied at 10% and is *added on top* of the GST-exclusive
(net) price. The $1,100 figure is the GST-**inclusive** total, so it equals the
net price plus 10% of the net price (110% of the net price).

Let the GST-exclusive price be `P`:

```
P + 0.10 × P = 1.10 × P = $1,100
P = $1,100 / 1.10 = $1,000
```

So the GST-exclusive price is **$1,000**, and the GST is:

```
GST = $1,100 - $1,000 = $100
```

### ATO shortcut (1/11th rule)

Because GST is 10% of the net price, the GST contained in a GST-inclusive
amount is always **1/11th** of that amount (10/110 = 1/11):

```
GST = $1,100 × 1/11 = $100
GST-exclusive price = $1,100 × 10/11 = $1,000
```

Both methods give the same result.

## Controlling authority

- *A New Tax System (Goods and Services Tax) Act 1999* (Cth) - GST is imposed
  at the rate of 10% on the value of a taxable supply (s 9-70, s 9-75); the
  "price" includes the GST.
- ATO guidance ("Working out the GST"): where a price already includes GST, the
  GST component is found by dividing the GST-inclusive price by 11.

## Approach

Recognised that the $1,100 is GST-inclusive at the standard 10% rate, applied
the standard ATO 1/11th method (cross-checked by solving 1.10 × P = $1,100), and
stated both requested figures in dollars.