James is a resident individual who owns lawn mowing business (charge $120 per visit GST inclusive) and operate the business as the sole trader from 1 July 2020. The business is registered for GST.

For the 2020/21 tax year, James reported the following transactions (assume all amounts are GST inclusive (where appropriate) and that a valid tax invoice has been provided unless stated otherwise.

Receipts $

Fees from clients 66,000

Interest income 2,000

Expenses

Fuel for vehicles 2,500

Purchase new lawnmower 1,200

Purchase new vehicle (60% business usage) 44,000

Repairs and maintenance (no ABN provided on invoice) 2,160

New equipment (no tax invoice provided) 1,650

Rubbish-tip fees ($20 per visit no tax invoice) 450

Mobile phone (70% business usage) 3,200

Bank fees 120

Wages casual staff 15,000

Superannuation casual staff 1,425

Wages- James's wife 5,000

Superannuation James's wife 475

Repayments of business loan 15,000

Additional Information:

1. In June 2021, James made a gift for no consideration, of an old lawn mower to his brother. (The market value of the lawn mower at the time of the gift was $175).

2. James provides his parents with a free lawn mowing every month.

3. James contracts to supply his friend's restaurant with free lawn mowing every month in return for a free meal for James and his family.

Required:

1) EXPLAIN AND CALCULATE the GST payable on supplies made and GST input tax credit claimable. Please show all workings citing relevant authorities. (20 Marks)

*****USEFUL INFORMATION********

Resident Individual Tax Rates 2021

Taxable income. Tax on this income

0 $18,200 Nil

$18,201 $45,000 19c for each $1 over $18,200

$45,001 $120,000 $5,092 plus 32.5c for each $1 over $45,000

$120,001 $180,000 $29,467 plus 37c for each $1 over $120,000

$180,001 and over $51,667 plus 45c for each $1 over $180,000

Prescribed Non-resident Tax Rates 2021

Taxable income Tax on this income

0 $120,000 32.5c for each $1

$120,001 $180,000 $39,000 plus 37c for each $1 over $120,000

$180,001 and over $61,200 plus 45c for each $1 over $180,000

Fringe Benefits Tax Car fringe benefits statutory formula rates A flat statutory rate of 20% applies to all car fringe benefits you provide from 1 April 2014, regardless of the distance travelled. GROSS-UP RATES FOR FRINGE BENEFITS TAX 2021: Type 1: 2.0802 Type 2: 1.8868 FBT RATE 31 MARCH 2021: 47% STATUTORY INTEREST RATE FOR 2021: 4.8% Trustee pays tax on the income to which no beneficiary is presently entitled: under s 99 at ordinary tax rates, or under s 99A at flat rate of 45%

Medicare levy is added in both cases if the income amount is appropriate.