2. Lulu is the owner and operator of Nails by Lulu, a local nail salon. She also works at TAFE where she teaches evening classes in beauty and nail treatments. During the 2019/20 financial year, Lulu reports the following transactions (GST included where applicable):

• Fees from nail treatments at her salon $375,000
• Salary for teaching at TAFE $45,000
• Interest received on business bank account $15,000
• Payments received from selling plain bottled water (GST-Free) $3,300
• Payments received from selling sparkling bottled water (taxable supply) $3,300

She also incurs the following expenses (inclusive of GST where applicable)

• Nail polishes and acrylics $27,500
• Bottled water (plain) to sell to customers $550
• Bottled water (sparkling) to sell to customers $550
• Computer for private use $1,650
• Wages (1 x employee) $25,000

1. Calculate the GST payable on supplies for the 2019/20 income year
2. Calculate the GST tax credits on for the 2019/20 income year
3. What is Lulus net GST liability for the 2019/20 income year?

Value = GST exclusive price $100,000

GST = 1/10th of the value or $10,000 (OR) 1/11th of the price

Price = GST inclusive price $110,00 (Value + GST)

GST Rate = 10% of the value of the item OR 1/11th of the price