# ACC-0001 - GST Calculation

## Answers

**(a) GST amount included in the invoice: $100.00**

**(b) GST-exclusive price: $1,000.00**

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## Working

Under Australia's GST regime (A New Tax System (Goods and Services Tax) Act 1999), GST is levied at 10% of the GST-exclusive supply price. When a GST-inclusive amount is given, the GST component is extracted using the fraction **1/11** (because 10% on top of the base equals 1/11 of the total).

Given: GST-inclusive invoice total = $1,100.00

**(a) GST amount**

GST = Total x (1/11)
GST = $1,100.00 x (1/11)
GST = **$100.00**

**(b) GST-exclusive price**

GST-exclusive price = Total - GST
GST-exclusive price = $1,100.00 - $100.00
GST-exclusive price = **$1,000.00**

Alternatively: GST-exclusive price = Total / 1.10 = $1,100.00 / 1.10 = $1,000.00

**Verification:** $1,000.00 x 10% = $100.00 GST; $1,000.00 + $100.00 = $1,100.00. Correct.

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## Approach

This is a straightforward GST arithmetic question. The controlling rule is that GST at 10% is applied to the GST-exclusive value, so to reverse-calculate from a GST-inclusive amount the numerator is 1 and the denominator is 11 (i.e., 10% expressed as a fraction of the inclusive price is 10/110 = 1/11). No input files were present beyond the prompt.