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A New Tax System (Goods and Services Tax) Act 1999

Authoritative Version
  • - C2012C00603
  • In force - Superseded Version
  • View Series
Act No. 55 of 1999 as amended, taking into account amendments up to Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012
An Act about a goods and services tax to implement A New Tax System, and for related purposes
Administered by: Treasury
Registered 17 Aug 2012
Start Date 27 Jun 2012
End Date 30 Jun 2012
Table of contents.

 

A New Tax System (Goods and Services Tax) Act 1999

Act No. 55 of 1999 as amended

This compilation was prepared on 30 June 2012
taking into account amendments up to Act No. 75 of 2012

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General’s Department, Canberra

  

  

  


Contents

Chapter 1—Introduction                                                                                                   1

Part 1‑1—Preliminary                                                                                                         1

Division 1—Preliminary                                                                                              1

1‑1......... Short title [see Note 1]........................................................................ 1

1‑2......... Commencement................................................................................... 1

1‑3......... Commonwealth‑State financial relations............................................. 1

1‑4......... States and Territories are bound by the GST law................................ 1

Part 1‑2—Using this Act                                                                                                    2

Division 2—Overview of the GST legislation                                                  2

2‑1......... What this Act is about......................................................................... 2

2‑5......... The basic rules (Chapter 2)................................................................. 2

2‑10....... The exemptions (Chapter 3)................................................................ 2

2‑15....... The special rules (Chapter 4)............................................................... 3

2‑20....... Miscellaneous (Chapter 5).................................................................. 3

2‑25....... Interpretative provisions (Chapter 6)................................................... 3

2‑30....... Administration, collection and recovery provisions in the Taxation Administration Act 1953 3

Division 3—Defined terms                                                                                         4

3‑1......... When defined terms are identified....................................................... 4

3‑5......... When terms are not identified.............................................................. 4

3‑10....... Identifying the defined term in a definition.......................................... 5

Division 4—Status of Guides and other non‑operative material           6

4‑1......... Non‑operative material........................................................................ 6

4‑5......... Explanatory sections........................................................................... 6

4‑10....... Other material...................................................................................... 6

Chapter 2—The basic rules                                                                                             7

Division 5—Introduction                                                                                            7

5‑1......... What this Chapter is about.................................................................. 7

5‑5......... The structure of this Chapter............................................................... 7

Part 2‑1—The central provisions                                                                                  9

Division 7—The central provisions                                                                       9

7‑1......... GST and input tax credits.................................................................... 9

7‑5......... Net amounts........................................................................................ 9

7‑10....... Tax periods......................................................................................... 9

7‑15....... Payments and refunds......................................................................... 9

Part 2‑2—Supplies and acquisitions                                                                         10

Division 9—Taxable supplies                                                                                  10

9‑1......... What this Division is about............................................................... 10

Subdivision 9‑A—What are taxable supplies?                                                  10

9‑5......... Taxable supplies................................................................................ 10

9‑10....... Meaning of supply............................................................................ 10

9‑15....... Consideration.................................................................................... 11

9‑17....... Certain payments and other things not consideration........................ 12

9‑20....... Enterprises........................................................................................ 13

9‑25....... Supplies connected with Australia.................................................... 15

9‑30....... Supplies that are GST‑free or input taxed......................................... 16

9‑39....... Special rules relating to taxable supplies........................................... 17

Subdivision 9‑B—Who is liable for GST on taxable supplies?                    18

9‑40....... Liability for GST on taxable supplies................................................ 18

9‑69....... Special rules relating to liability for GST on taxable supplies........... 18

Subdivision 9‑C—How much GST is payable on taxable supplies?            19

9‑70....... The amount of GST on taxable supplies........................................... 19

9‑75....... The value of taxable supplies............................................................ 19

9‑80....... The value of taxable supplies that are partly GST‑free or input taxed 21

9‑85....... Value of taxable supplies to be expressed in Australian currency..... 21

9‑90....... Rounding of amounts of GST........................................................... 22

9‑99....... Special rules relating to the amount of GST on taxable supplies....... 24

Division 11—Creditable acquisitions                                                                 25

11‑1....... What this Division is about............................................................... 25

11‑5....... What is a creditable acquisition?........................................................ 25

11‑10..... Meaning of acquisition..................................................................... 25

11‑15..... Meaning of creditable purpose......................................................... 26

11‑20..... Who is entitled to input tax credits for creditable acquisitions?......... 27

11‑25..... How much are the input tax credits for creditable acquisitions?........ 27

11‑30..... Acquisitions that are partly creditable................................................ 27

11‑99..... Special rules relating to acquisitions.................................................. 28

Part 2‑3—Importations                                                                                                     30

Division 13—Taxable importations                                                                    30

13‑1....... What this Division is about............................................................... 30

13‑5....... What are taxable importations?.......................................................... 30

13‑10..... Meaning of non‑taxable importation................................................ 30

13‑15..... Who is liable for GST on taxable importations?................................ 31

13‑20..... How much GST is payable on taxable importations?........................ 31

13‑25..... The value of taxable importations that are partly non‑taxable importations               32

13‑99..... Special rules relating to taxable importations..................................... 32

Division 15—Creditable importations                                                               34

15‑1....... What this Division is about............................................................... 34

15‑5....... What are creditable importations?...................................................... 34

15‑10..... Meaning of creditable purpose......................................................... 34

15‑15..... Who is entitled to input tax credits for creditable importations?........ 35

15‑20..... How much are the input tax credits for creditable importations?....... 35

15‑25..... Importations that are partly creditable................................................ 35

15‑99..... Special rules relating to creditable importations................................. 36

Part 2‑4—Net amounts and adjustments                                                               37

Division 17—Net amounts and adjustments                                                   37

17‑1....... What this Division is about............................................................... 37

17‑5....... Net amounts...................................................................................... 37

17‑10..... Adjustments...................................................................................... 38

17‑15..... Working out net amounts using approved forms.............................. 38

17‑20..... Determinations relating to how to work out net amounts.................. 38

17‑99..... Special rules relating to net amounts or adjustments......................... 39

Division 19—Adjustment events                                                                           41

19‑1....... What this Division is about............................................................... 41

19‑5....... Explanation of the effect of adjustment events.................................. 41

Subdivision 19‑A—Adjustment events                                                                42

19‑10..... Adjustment events............................................................................. 42

Subdivision 19‑B—Adjustments for supplies                                                    43

19‑40..... Where adjustments for supplies arise................................................ 43

19‑45..... Previously attributed GST amounts.................................................. 44

19‑50..... Increasing adjustments for supplies.................................................. 44

19‑55..... Decreasing adjustments for supplies................................................. 44

Subdivision 19‑C—Adjustments for acquisitions                                             44

19‑70..... Where adjustments for acquisitions arise.......................................... 44

19‑75..... Previously attributed input tax credit amounts................................... 45

19‑80..... Increasing adjustments for acquisitions............................................. 45

19‑85..... Decreasing adjustments for acquisitions........................................... 46

19‑99..... Special rules relating to adjustment events........................................ 46

Division 21—Bad debts                                                                                              47

21‑1....... What this Division is about............................................................... 47

21‑5....... Writing off bad debts (taxable supplies)............................................ 47

21‑10..... Recovering amounts previously written off (taxable supplies).......... 47

21‑15..... Bad debts written off (creditable acquisitions).................................. 48

21‑20..... Recovering amounts previously written off (creditable acquisitions) 48

21‑99..... Special rules relating to adjustments for bad debts............................ 49

Part 2‑5—Registration                                                                                                      50

Division 23—Who is required to be registered and who may be registered       50

23‑1....... Explanation of Division.................................................................... 50

23‑5....... Who is required to be registered........................................................ 50

23‑10..... Who may be registered...................................................................... 51

23‑15..... The registration turnover threshold................................................... 51

23‑99..... Special rules relating to who is required to be registered or who may be registered 51

Division 25—How you become registered, and how your registration can be cancelled            52

Subdivision 25‑A—How you become registered                                              52

25‑1....... When you must apply for registration............................................... 52

25‑5....... When the Commissioner must register you....................................... 52

25‑10..... The date of effect of your registration............................................... 53

25‑15..... Effect of backdating your registration............................................... 53

25‑49..... Special rules relating to registration................................................... 54

Subdivision 25‑B—How your registration can be cancelled                         54

25‑50..... When you must apply for cancellation of registration....................... 54

25‑55..... When the Commissioner must cancel registration............................. 55

25‑57..... When the Commissioner may cancel your registration...................... 55

25‑60..... The date of effect of your cancellation............................................... 56

25‑65..... Effect of backdating your cancellation of registration........................ 56

25‑99..... Special rules relating to cancellation of registration........................... 57

Part 2‑6—Tax periods                                                                                                       58

Division 27—How to work out the tax periods that apply to you      58

27‑1....... What this Division is about............................................................... 58

27‑5....... General rule—3 month tax periods................................................... 58

27‑10..... Election of one month tax periods..................................................... 58

27‑15..... Determination of one month tax periods........................................... 58

27‑20..... Withdrawing elections of one month tax periods.............................. 59

27‑22..... Revoking elections of one month tax periods.................................... 60

27‑25..... Revoking determinations of one month tax periods.......................... 60

27‑30..... Tax periods determined by the Commissioner to take account of changes in tax periods         61

27‑35..... Changing the days on which your tax periods end............................ 61

27‑37..... Special determination of tax periods on request................................ 62

27‑38..... Revoking special determination of tax periods.................................. 62

27‑39..... Tax periods of incapacitated entities.................................................. 63

27‑40..... An entity’s concluding tax period..................................................... 63

27‑99..... Special rules relating to tax periods................................................... 64

Division 29—What is attributable to tax periods                                        65

29‑1....... What this Division is about............................................................... 65

Subdivision 29‑A—The attribution rules                                                           65

29‑5....... Attributing the GST on your taxable supplies................................... 65

29‑10..... Attributing the input tax credits for your creditable acquisitions....... 66

29‑15..... Attributing the input tax credits for your creditable importations...... 67

29‑20..... Attributing your adjustments............................................................. 67

29‑25..... Commissioner may determine particular attribution rules.................. 68

29‑39..... Special rules relating to attribution rules............................................ 69

Subdivision 29‑B—Accounting on a cash basis                                                70

29‑40..... Choosing to account on a cash basis................................................. 70

29‑45..... Permission to account on a cash basis............................................... 71

29‑50..... Ceasing to account on a cash basis.................................................... 71

29‑69..... Special rules relating to accounting on a cash basis........................... 72

Subdivision 29‑C—Tax invoices and adjustment notes                                  73

29‑70..... Tax invoices...................................................................................... 73

29‑75..... Adjustment notes.............................................................................. 74

29‑80..... Tax invoices and adjustment notes not required for low value transactions              75

29‑99..... Special rules relating to tax invoices and adjustment notes................ 76

Part 2‑7—Returns, payments and refunds                                                          77

Division 31—GST returns                                                                                        77

31‑1....... What this Division is about............................................................... 77

31‑5....... Who must give GST returns............................................................. 77

31‑8....... When GST returns must be given—quarterly tax periods................. 77

31‑10..... When GST returns must be given—other tax periods....................... 78

31‑15..... The form and contents of GST returns.............................................. 78

31‑20..... Additional GST returns..................................................................... 79

31‑25..... Electronic lodgment of GST returns.................................................. 79

31‑99..... Special rules relating to GST returns................................................. 80

Division 33—Payments of GST                                                                             81

33‑1....... What this Division is about............................................................... 81

33‑3....... When payments of net amounts must be made—quarterly tax periods 81

33‑5....... When payments of net amounts must be made—other tax periods... 82

33‑10..... How payments of net amounts are made........................................... 82

33‑15..... Payments of amounts of GST on importations................................. 82

33‑99..... Special rules relating to payments of GST........................................ 83

Division 35—Refunds                                                                                                 84

35‑1....... What this Division is about............................................................... 84

35‑5....... Entitlement to refund......................................................................... 84

35‑10..... When entitlement arises..................................................................... 84

35‑99..... Special rules relating to refunds........................................................ 85

Part 2‑8—Checklist of special rules                                                                          86

Division 37—Checklist of special rules                                                             86

37‑1....... Checklist of special rules................................................................... 86

Chapter 3—The exemptions                                                                                          89

Part 3‑1—Supplies that are not taxable supplies                                              89

Division 38—GST‑free supplies                                                                            89

38‑1....... What this Division is about............................................................... 90

Subdivision 38‑A—Food                                                                                         90

38‑2....... Food.................................................................................................. 90

38‑3....... Food that is not GST‑free................................................................. 90

38‑4....... Meaning of food................................................................................ 91

38‑5....... Premises used in supplying food...................................................... 91

38‑6....... Packaging of food............................................................................. 92

Subdivision 38‑B—Health                                                                                      92

38‑7....... Medical services................................................................................ 92

38‑10..... Other health services......................................................................... 92

38‑15..... Other government funded health services......................................... 94

38‑20..... Hospital treatment............................................................................. 94

38‑25..... Residential care etc............................................................................ 95

38‑30..... Community care etc........................................................................... 97

38‑35..... Flexible care...................................................................................... 98

38‑40..... Specialist disability services.............................................................. 98

38‑45..... Medical aids and appliances.............................................................. 98

38‑47..... Other GST‑free health goods............................................................ 99

38‑50..... Drugs and medicinal preparations etc................................................ 99

38‑55..... Private health insurance etc............................................................. 100

38‑60..... Third party procured GST‑free health supplies............................... 101

Subdivision 38‑C—Education                                                                             102

38‑85..... Education courses........................................................................... 102

38‑90..... Excursions or field trips.................................................................. 102

38‑95..... Course materials.............................................................................. 103

38‑97..... Lease etc. of curriculum related goods............................................ 103

38‑100... Supplies that are not GST‑free........................................................ 103

38‑105... Accommodation at boarding schools etc......................................... 104

38‑110... Recognition of prior learning etc..................................................... 104

Subdivision 38‑D—Child care                                                                             105

38‑140... Child care—registered carers under the family assistance law........ 105

38‑145... Child care—approved child care services under the family assistance law               105

38‑150... Other child care............................................................................... 105

38‑155... Supplies directly related to child care that is GST‑free.................... 106

Subdivision 38‑E—Exports and other supplies for consumption outside Australia      106

38‑185... Exports of goods............................................................................. 106

38‑187... Lease etc. of goods for use outside Australia.................................. 112

38‑188... Tooling used by non‑residents to manufacture goods for export.... 112

38‑190... Supplies of things, other than goods or real property, for consumption outside Australia       112

Subdivision 38‑F—Religious services                                                               115

38‑220... Religious services........................................................................... 115

Subdivision 38‑G—Activities of charitable institutions etc.                        115

38‑250... Nominal consideration etc............................................................... 115

38‑255... Second‑hand goods......................................................................... 116

38‑260... Supplies of retirement village accommodation etc........................... 117

38‑270... Raffles and bingo conducted by charitable institutions etc.............. 118

Subdivision 38‑I—Water, sewerage and drainage                                        119

38‑285... Water............................................................................................... 119

38‑290... Sewerage and sewerage‑like services.............................................. 119

38‑295... Emptying of septic tanks................................................................. 119

38‑300... Drainage.......................................................................................... 119

Subdivision 38‑J—Supplies of going concerns                                               120

38‑325... Supply of a going concern.............................................................. 120

Subdivision 38‑K—Transport and related matters                                       120

38‑355... Supplies of transport and related matters......................................... 120

38‑360... Travel agents arranging overseas supplies...................................... 123

Subdivision 38‑L—Precious metals                                                                   123

38‑385... Supplies of precious metals............................................................. 123

Subdivision 38‑M—Supplies through inwards duty free shops                  123

38‑415... Supplies through inwards duty free shops...................................... 123

Subdivision 38‑N—Grants of land by governments                                      123

38‑445... Grants of freehold and similar interests by governments................ 123

38‑450... Leases preceding grants of freehold and similar interests by governments               124

Subdivision 38‑O—Farm land                                                                            125

38‑475... Subdivided farm land...................................................................... 125

38‑480... Farm land supplied for farming....................................................... 125

Subdivision 38‑P—Cars for use by disabled people                                      126

38‑505... Disabled veterans............................................................................ 126

38‑510... Other disabled people...................................................................... 126

Subdivision 38‑Q—International mail                                                             127

38‑540... International mail............................................................................. 127

Subdivision 38‑R—Telecommunication supplies made under arrangements for global roaming in Australia    128

38‑570... Telecommunication supplies made under arrangements for global roaming in Australia          128

Subdivision 38‑S—Eligible emissions units                                                     129

38‑590... Eligible emissions units................................................................... 129

Division 40—Input taxed supplies                                                                      130

40‑1....... What this Division is about............................................................. 130

Subdivision 40‑A—Financial supplies                                                              130

40‑5....... Financial supplies............................................................................ 130

Subdivision 40‑B—Residential rent                                                                   131

40‑35..... Residential rent................................................................................ 131

Subdivision 40‑C—Residential premises                                                          132

40‑65..... Sales of residential premises........................................................... 132

40‑70..... Supplies of residential premises by way of long‑term lease............ 132

40‑75..... Meaning of new residential premises............................................. 132

Subdivision 40‑D—Precious metals                                                                   135

40‑100... Precious metals............................................................................... 135

Subdivision 40‑E—School tuckshops and canteens                                       135

40‑130... School tuckshops and canteens....................................................... 135

Subdivision 40‑F—Fund‑raising events conducted by charitable institutions etc.         136

40‑160... Fund‑raising events conducted by charitable institutions etc........... 136

40‑165... Meaning of fund‑raising event........................................................ 137

Part 3‑2—Non‑taxable importations                                                                      138

Division 42—Non‑taxable importations                                                         138

42‑1....... What this Division is about............................................................. 138

42‑5....... Non‑taxable importations—Schedule 4 to the Customs Tariff Act 1995  138

42‑10..... Goods returned to Australia in an unaltered condition.................... 139

Chapter 4—The special rules                                                                                      140

Division 45—Introduction                                                                                      140

45‑1....... What this Chapter is about.............................................................. 140

45‑5....... The effect of special rules................................................................ 140

Part 4‑1—Special rules mainly about particular ways entities are organised       141

Division 48—GST groups                                                                                       141

48‑1....... What this Division is about............................................................. 141

Subdivision 48‑A—Formation and membership of GST groups               141

48‑5....... Formation of GST groups............................................................... 141

48‑7....... Membership of GST groups........................................................... 142

48‑10..... Membership requirements of a GST group..................................... 143

48‑15..... Relationship of companies and non‑companies in a GST group..... 144

Subdivision 48‑B—Consequences of GST groups                                          146

48‑40..... Who is liable for GST..................................................................... 146

48‑45..... Who is entitled to input tax credits.................................................. 147

48‑50..... Adjustments.................................................................................... 148

48‑51..... Consequences of being a member of a GST group for part of a tax period              148

48‑52..... Consequences for a representative member of membership change during a tax period           149

48‑53..... Consequences of changing a representative member during a tax period 149

48‑55..... GST groups treated as single entities for certain purposes.............. 150

48‑57..... Tax invoices that are required to identify recipients......................... 151

48‑60..... GST returns.................................................................................... 152

Subdivision 48‑C—Administrative matters                                                     152

48‑70..... Changing the membership etc. of GST groups............................... 152

48‑71..... Approval of early day of effect of forming, changing etc. GST groups 154

48‑73..... Tax periods of GST groups with incapacitated members................ 154

48‑75..... Effect of representative member becoming an incapacitated entity.. 155

Subdivision 48‑D—Ceasing to be a member of a GST group                     156

48‑110... Adjustments after you cease to be a member of a GST group......... 156

48‑115... Changes in extent of creditable purpose after you cease to be a member of a GST group        156

Division 49—GST religious groups                                                                   158

49‑1....... What this Division is about............................................................. 158

Subdivision 49‑A—Approval of GST religious groups                                158

49‑5....... Approval of GST religious groups................................................. 158

49‑10..... Membership requirements of a GST religious group...................... 159

Subdivision 49‑B—Consequences of approval of GST religious groups 159

49‑30..... Supplies between members of GST religious groups..................... 159

49‑35..... Acquisitions between members of GST religious groups............... 159

49‑40..... Adjustment events........................................................................... 159

49‑45..... Changes in the extent of creditable purpose.................................... 160

49‑50..... GST religious groups treated as single entities for certain purposes 160

Subdivision 49‑C—Administrative matters                                                     161

49‑70..... Changing the membership etc. of GST religious groups................. 161

49‑75..... Revoking the approval of GST religious groups............................. 161

49‑80..... Notification by principal members.................................................. 162

49‑85..... Date of effect of approvals and revocations.................................... 162

49‑90..... Notification by the Commissioner................................................... 163

Division 50—GST treatment of religious practitioners                         164

Guide to Division 50                                                                                              164

50‑1....... What this Division is about............................................................. 164

50‑5....... GST treatment of religious practitioners.......................................... 164

Division 51—GST joint ventures                                                                        165

51‑1....... What this Division is about............................................................. 165

Subdivision 51‑A—Formation of and participation in GST joint ventures 165

51‑5....... Formation of GST joint ventures.................................................... 165

51‑7....... Participants in GST joint ventures................................................... 166

51‑10..... Participation requirements of a GST joint venture........................... 167

Subdivision 51‑B—Consequences of GST joint ventures                             167

51‑30..... Who is liable for GST..................................................................... 167

51‑35..... Who is entitled to input tax credits.................................................. 168

51‑40..... Adjustments.................................................................................... 168

51‑45..... Additional net amounts relating to GST joint ventures.................... 169

51‑50..... GST returns relating to GST joint ventures..................................... 170

51‑52..... Consolidation of GST returns relating to GST joint ventures......... 170

51‑55..... Payments of GST relating to GST joint ventures............................ 171

51‑60..... Refunds relating to GST joint ventures........................................... 171

Subdivision 51‑C—Administrative matters                                                     172

51‑70..... Changing the participants etc. of GST joint ventures...................... 172

51‑75..... Approval of early day of effect of forming, changing etc. GST joint ventures         173

Subdivision 51‑D—Ceasing to be a participant in, or an operator of, a GST joint venture        174

51‑110... Adjustments after you cease to be a participant in a GST joint venture 174

51‑115... Changes in extent of creditable purpose after you cease to be a member of a GST joint venture              174

Division 54—GST branches                                                                                  176

54‑1....... What this Division is about............................................................. 176

Subdivision 54‑A—Registration of GST branches                                        176

54‑5....... Registration of GST branches......................................................... 176

54‑10..... The date of effect of registration of a GST branch.......................... 177

54‑15..... GST branch registration number..................................................... 177

Subdivision 54‑B—Consequences of registration of GST branches         177

54‑40..... Additional net amounts relating to GST branches........................... 177

54‑45..... Net amounts of parent entities......................................................... 178

54‑50..... Tax invoices and adjustment notes.................................................. 179

54‑55..... GST returns relating to GST branches............................................ 179

54‑60..... Payments of GST relating to GST branches................................... 180

54‑65..... Refunds relating to GST branches.................................................. 180

Subdivision 54‑C—Cancellation of registration of GST branches           181

54‑70..... When an entity must apply for cancellation of registration of a GST branch            181

54‑75..... When the Commissioner must cancel registration of a GST branch 181

54‑80..... The date of effect of cancellation of registration of a GST branch... 182

54‑85..... Application of Subdivision 25‑B.................................................... 182

54‑90..... Effect on GST branches of cancelling the entity’s registration........ 182

Division 57—Resident agents acting for non‑residents                          183

57‑1....... What this Division is about............................................................. 183

57‑5....... Who is liable for GST..................................................................... 183

57‑10..... Who is entitled to input tax credits.................................................. 183

57‑15..... Adjustments.................................................................................... 183

57‑20..... Resident agents are required to be registered................................... 184

57‑25..... Cancellation of registration of a resident agent................................ 184

57‑30..... Notice of cessation of agency.......................................................... 184

57‑35..... Tax periods of resident agents......................................................... 184

57‑40..... GST returns for non‑residents........................................................ 185

57‑45..... Resident agents giving GST returns................................................ 185

57‑50..... Non‑residents that belong to GST groups....................................... 186

Division 58—Representatives of incapacitated entities                          187

58‑1....... What this Division is about............................................................. 187

58‑5....... General principle for the relationship between incapacitated entities and their representatives  187

58‑10..... Circumstances in which representatives have GST‑related liabilities and entitlements             188

58‑15..... Adjustments for bad debts.............................................................. 190

58‑20..... Representatives are required to be registered................................... 191

58‑25..... Cancellation of registration of a representative................................ 191

58‑30..... Notice of cessation of representation............................................... 191

58‑35..... Tax periods of representatives......................................................... 191

58‑40..... Effect on attribution rules of not accounting on a cash basis........... 192

58‑45..... GST returns for representatives of incapacitated entities................. 192

58‑50..... Representatives to give GST returns for incapacitated entities........ 192

58‑55..... Incapacitated entities not required to give GST returns in some cases 194

58‑60..... Representative to notify Commissioner of certain liabilities etc....... 194

58‑65..... Money available to meet representative’s liabilities......................... 195

58‑70..... Protection for actions of representative........................................... 195

Division 60—Pre‑establishment costs                                                              196

60‑1....... What this Division is about............................................................. 196

60‑5....... Input tax credit for acquisitions and importations before establishment 196

60‑10..... Registration etc. not needed for input tax credits............................. 196

60‑15..... Pre‑establishment acquisitions and importations............................. 197

60‑20..... Creditable purpose.......................................................................... 197

60‑25..... Attributing the input tax credit for pre‑establishment acquisitions... 198

60‑30..... Attributing the input tax credit for pre‑establishment importations.. 199

60‑35..... Application of Division 129............................................................ 199

Division 63—Non‑profit sub‑entities                                                                200

63‑1....... What this Division is about............................................................. 200

63‑5....... Entities that may choose to apply this Division............................... 200

63‑10..... Period for which a choice has effect................................................ 201

63‑15..... Consequences of choosing to apply this Division........................... 201

63‑20..... Non‑profit sub‑entities may register................................................ 202

63‑25..... Registration turnover threshold for non‑profit sub‑entities............. 202

63‑27..... Application of particular provisions relating to charitable institutions etc.                202

63‑30..... When non‑profit sub‑entities must apply for cancellation of registration  203

63‑35..... When the Commissioner must cancel registration of non‑profit sub‑entities            204

63‑40..... Effect on adjustments of becoming a non‑profit sub‑entity............. 204

63‑45..... Effect on adjustments of ceasing to be a non‑profit sub‑entity........ 205

63‑50..... Membership requirements of GST groups...................................... 205

Part 4‑2—Special rules mainly about supplies and acquisitions            206

Division 66—Second‑hand goods                                                                       206

66‑1....... What this Division is about............................................................. 206

Subdivision 66‑A—Input tax credits for acquiring second‑hand goods   206

66‑5....... Creditable acquisitions of second‑hand goods................................ 206

66‑10..... Amounts of input tax credits for creditable acquisitions of second‑hand goods       207

66‑15..... Attributing input tax credits for creditable acquisitions of second‑hand goods         207

66‑17..... Records of creditable acquisitions of second‑hand goods............... 208

Subdivision 66‑B—Acquisitions of second‑hand goods that are divided for re‑supply                209

66‑40..... Acquisitions of second‑hand goods that can be used to offset GST on future re‑supplies       209

66‑45..... Future re‑supplies that are not taxable supplies............................... 210

66‑50..... Future re‑supplies on which GST is reduced.................................. 211

66‑55..... Records of acquisitions of second‑hand goods to which this Subdivision applied   211

66‑60..... Input tax credits for acquiring second‑hand goods the supply of which is not fully taxable     212

66‑65..... Total Subdivision 66‑B credit amounts and Subdivision 66‑B GST amounts          212

66‑70..... Commissioner may determine rules for applying this Subdivision. 213

Division 69—Non‑deductible expenses                                                            214

69‑1....... What this Division is about............................................................. 214

Subdivision 69‑A—Non‑deductible expenses generally                                214

69‑5....... Non‑deductible expenses do not give rise to creditable acquisitions or creditable importations                214

69‑10..... Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars           215

Subdivision 69‑B—Elections for GST purposes relating to meal entertainment and entertainment facilities      216

69‑15..... What this Subdivision is about........................................................ 216

69‑20..... Effect of elections on net amounts................................................... 217

69‑25..... Election to use the 50/50 split method for meal entertainment......... 217

69‑30..... Election to use the 12 week register method for meal entertainment 217

69‑35..... Election to use the 50/50 split method for entertainment facilities... 218

69‑40..... When elections take effect............................................................... 218

69‑45..... When elections cease to have effect................................................. 218

69‑50..... Adjustment events relating to elections........................................... 219

69‑55..... Adjustment notes not required........................................................ 221

Division 70—Financial supplies (reduced credit acquisitions)            222

70‑1....... What this Division is about............................................................. 222

70‑5....... Acquisitions that attract the reduced credit...................................... 222

70‑10..... Extended meaning of creditable purpose........................................ 222

70‑15..... How much are the reduced input tax credits?.................................. 223

70‑20..... Extent of creditable purpose............................................................ 223

70‑25..... Sale of reduced credit acquisitions (Division 132).......................... 224

Division 71—Fringe benefits provided by input taxed suppliers       226

71‑1....... What this Division is about............................................................. 226

71‑5....... Acquisitions by input taxed suppliers to provide fringe benefits..... 226

71‑10..... Importations by input taxed suppliers to provide fringe benefits..... 227

Division 72—Associates                                                                                          228

72‑1....... What this Division is about............................................................. 228

Subdivision 72‑A—Supplies without consideration                                       228

72‑5....... Taxable supplies without consideration........................................... 228

72‑10..... The value of taxable supplies without consideration....................... 229

72‑15..... Attributing the GST to tax periods.................................................. 229

72‑20..... Supplies and acquisitions that would otherwise be sales etc........... 229

72‑25..... Supplies that would otherwise be GST‑free, input taxed or financial supplies         229

Subdivision 72‑B—Acquisitions without consideration                                230

72‑40..... Creditable acquisitions without consideration................................. 230

72‑45..... The amount of the input tax credit................................................... 230

72‑50..... Attributing the input tax credit to tax periods.................................. 231

Subdivision 72‑C—Supplies for inadequate consideration                         231

72‑70..... The value of taxable supplies for inadequate consideration............. 231

Subdivision 72‑D—Application of this Division to certain sub‑entities    232

72‑90..... GST branches................................................................................. 232

72‑92..... Non‑profit sub‑entities.................................................................... 232

72‑95..... Commonwealth government entities............................................... 232

72‑100... State or Territory government entities............................................. 233

Division 75—Sale of freehold interests etc.                                                  234

75‑1....... What this Division is about............................................................. 234

75‑5....... Applying the margin scheme........................................................... 234

75‑10..... The amount of GST on taxable supplies......................................... 236

75‑11..... Margins for supplies of real property in particular circumstances... 239

75‑12..... Working out margins to take into account failure to pay full consideration              245

75‑13..... Working out margins to take into account supplies to associates.... 245

75‑14..... Consideration for acquisition of real property not to include cost of improvements etc.           246

75‑15..... Subdivided land.............................................................................. 246

75‑16..... Margins for supplies of real property acquired through several acquisitions            246

75‑20..... Supplies under a margin scheme do not give rise to creditable acquisitions             247

75‑22..... Increasing adjustment relating to input tax credit entitlement........... 247

75‑25..... Adjustments relating to bad debts................................................... 249

75‑27..... Decreasing adjustment for later payment of consideration.............. 249

75‑30..... Tax invoices not required for supplies of real property under the margin scheme    250

75‑35..... Approved valuations....................................................................... 250

Division 78—Insurance                                                                                           251

78‑1....... What this Division is about............................................................. 251

Subdivision 78‑A—Insurers                                                                                 251

78‑5....... GST on insurance premiums is exclusive of stamp duty................. 251

78‑10..... Decreasing adjustments for settlements of insurance claims........... 252

78‑15..... How to work out the decreasing adjustments.................................. 252

78‑18..... Increasing adjustments for payments of excess under insurance policies 254

78‑20..... Settlements of insurance claims do not give rise to creditable acquisitions               255

78‑25..... Supplies in settlement of claims are not taxable supplies................. 255

78‑30..... Acquisitions by insurers in the course of settling claims under non‑taxable policies                255

78‑35..... Taxable supplies relating to rights of subrogation........................... 256

78‑40..... Adjustment events relating to decreasing adjustments under this Division               256

78‑42..... Adjustment events relating to increasing adjustments under section 78‑18              257

Subdivision 78‑B—Insured entities etc.                                                            257

78‑45..... Settlements of insurance claims do not give rise to taxable supplies 257

78‑50..... Settlements of insurance claims give rise to taxable supplies if entitlement to input tax credits is not disclosed       258

78‑55..... Payments of excess under insurance policies are not consideration for supplies      259

78‑60..... Supplies of goods to insurers in the course of settling claims......... 259

Subdivision 78‑C—Third parties                                                                       259

78‑65..... Payments etc. to third parties by insurers........................................ 259

78‑70..... Payments etc. to third parties by insured entities............................. 260

78‑75..... Creditable acquisitions relating to rights of subrogation.................. 261

Subdivision 78‑D—Insured entities that are not registered etc.                  261

78‑80..... Net amounts.................................................................................... 261

78‑85..... GST returns.................................................................................... 261

78‑90..... Payments of GST............................................................................ 262

Subdivision 78‑E—Statutory compensation schemes                                   262

78‑95..... GST on premiums etc. under statutory compensation schemes is exclusive of stamp duty      262

78‑100... Settlements of claims for compensation under statutory compensation schemes      262

78‑105... Meaning of statutory compensation scheme................................... 263

Subdivision 78‑F—Miscellaneous                                                                      264

78‑110... Effect of judgments and court orders.............................................. 264

78‑115... Exclusion of certain Commonwealth, State or Territory insurance schemes             264

78‑118... Portfolio transfers........................................................................... 265

78‑120... HIH rescue package........................................................................ 265

Division 79—Compulsory third party schemes                                          267

79‑1....... What this Division is about............................................................. 267

Subdivision 79‑A—Modified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies                                         268

79‑5....... Application of sections 78‑10 and 78‑15 (about decreasing adjustments) where premium selection test is satisfied........................................................................................................ 268

79‑10..... Adjustment where operator becomes aware that correct input tax credit situation differs from basis on which premium selection test was satisfied............................................................... 269

79‑15..... Application of sections 78‑10 and 78‑15 (about decreasing adjustments) where sole operator election to use average input tax credit entitlement............................................................... 270

79‑20..... Extension of various references in Division 78 to rights of subrogation to cover other rights of recovery              272

Subdivision 79‑B—Extension of Division 78 to cover certain compulsory third party scheme payments and supplies connected with, but not under, insurance policies             273

79‑25..... Meaning of CTP hybrid payment or supply.................................... 273

79‑30..... Application of Division 78.............................................................. 274

Subdivision 79‑C—Other payments and supplies under compulsory third party schemes         274

79‑35..... Meaning of CTP compensation or ancillary payment or supply etc. 274

79‑40..... GST on CTP premiums is exclusive of stamp duty........................ 275

79‑45..... Exclusion of certain compulsory third party schemes..................... 275

79‑50..... Decreasing adjustments for CTP compensation or ancillary payments or supplies  276

79‑55..... Increasing adjustments for payments of excess etc. under compulsory third party schemes    276

79‑60..... Effect of settlements and payments under compulsory third party schemes             277

79‑65..... Taxable supplies relating to recovery by operators of compulsory third party schemes           278

79‑70..... Adjustment events relating to decreasing adjustments for operators of compulsory third party schemes 278

79‑75..... Adjustment events relating to increasing adjustments under section 79‑55              279

79‑80..... Payments of excess under compulsory third party schemes are not consideration for supplies                279

79‑85..... Supplies of goods to operators in the course of settling claims....... 280

79‑90..... Effect of judgments and court orders.............................................. 280

Subdivision 79‑D—Compulsory third party scheme decreasing adjustments worked out using applicable average input tax credit fraction                                                          281

79‑95..... How to work out decreasing adjustments using the applicable average input tax credit fraction              281

79‑100... Meaning of average input tax credit fraction.................................. 283

Division 80—Settlement sharing arrangements                                         286

80‑1....... What this Division is about............................................................. 286

Subdivision 80‑A—Insurance policy settlement sharing arrangements  286

80‑5....... Meaning of insurance policy settlement sharing arrangement etc.. 286

80‑10..... Effect of becoming parties to industry deeds or entering into settlement sharing arrangements                287

80‑15..... Effect of contributing operator’s payment....................................... 287

80‑20..... Managing operator’s payments or supplies..................................... 288

80‑25..... Contributing operator’s payment..................................................... 288

80‑30..... Managing operator’s increasing adjustment where contributing operator’s payment               289

80‑35..... Adjustment events relating to managing operator’s payment or supply 290

Subdivision 80‑B—Nominal defendant settlement sharing arrangements 291

80‑40..... Meaning of nominal defendant settlement sharing arrangement etc. 291

80‑45..... Nominal defendant settlement sharing arrangements to which this Subdivision applies           292

80‑50..... Effect of becoming parties to industry deeds or entering into nominal defendant settlement sharing arrangements  292

80‑55..... Effect of contributing operator’s payment....................................... 292

80‑60..... Managing operator’s payment or supply......................................... 292

80‑65..... Contributing operator’s payment..................................................... 293

80‑70..... Managing operator’s increasing adjustment where contributing operator’s payment               293

80‑75..... Adjustment events relating to managing operator’s payment or supply 294

Subdivision 80‑C—Hybrid settlement sharing arrangements                    294

80‑80..... Meaning of hybrid settlement sharing arrangement etc................. 294

80‑85..... Subdivision 80‑A to apply to hybrid settlement sharing arrangement, subject to exceptions    295

80‑90..... Subdivision 80‑B to apply to payments or supplies by managing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement     295

80‑95..... Subdivision 80‑B to apply to payments or supplies by contributing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement             296

Division 81—Payments of taxes, fees and charges                                   297

81‑1....... What this Division is about............................................................. 297

81‑5....... Effect of payment of tax.................................................................. 297

81‑10..... Effect of payment of certain fees and charges................................. 297

81‑15..... Other fees and charges that do not constitute consideration............ 298

81‑20..... Division has effect despite sections 9‑15 and 9‑17......................... 299

81‑25..... Date of effect of regulations............................................................ 299

Division 82—Supplies in return for rights to develop land                  300

82‑1....... What this Division is about............................................................. 300

82‑5....... Supplies of rights to develop land do not constitute consideration in certain cases   300

82‑10..... Supplies by Australian government agencies of rights to develop land are not for consideration             300

Division 83—Non‑residents making supplies connected with Australia                302

83‑1....... What this Division is about............................................................. 302

83‑5....... “Reverse charge” on supplies made by non‑residents..................... 302

83‑10..... Recipients who are members of GST groups.................................. 303

83‑15..... Recipients who are participants in GST joint ventures.................... 303

83‑20..... The amount of GST on “reverse charged” supplies made by non‑residents             303

83‑25..... When non‑residents must apply for registration.............................. 303

83‑30..... When the Commissioner must register non‑residents..................... 304

83‑35..... Tax invoices not required for “reverse charged” supplies made by non‑residents    304

Division 84—Offshore supplies other than goods or real property 305

84‑1....... What this Division is about............................................................. 305

84‑5....... Intangible supplies from offshore that are taxable supplies under this Division       305

84‑10..... “Reverse charge” on offshore intangible supplies........................... 306

84‑12..... The amount of GST on offshore intangible supplies....................... 306

84‑13..... The amount of input tax credits relating to offshore intangible supplies 306

84‑14..... Supplies relating to employee share ownership schemes................ 307

84‑15..... Transfers etc. between branches of the same entity......................... 308

Division 85—Telecommunication supplies                                                    309

85‑1....... What this Division is about............................................................. 309

85‑5....... When telecommunication supplies are connected with Australia..... 309

85‑10..... Meaning of telecommunication supply............................................ 309

Division 87—Long‑term accommodation in commercial residential premises  310

87‑1....... What this Division is about............................................................. 310

87‑5....... Commercial residential premises that are predominantly for long‑term accommodation           310

87‑10..... Commercial residential premises that are not predominantly for long‑term accommodation     310

87‑15..... Meaning of commercial accommodation........................................ 311

87‑20..... Meaning of long‑term accommodation etc..................................... 311

87‑25..... Suppliers may choose not to apply this Division............................ 312

Division 90—Company amalgamations                                                          313

90‑1....... What this Division is about............................................................. 313

90‑5....... Supplies not taxable—amalgamated company registered or required to be registered              313

90‑10..... Value of taxable supplies—amalgamated company not registered or required to be registered                313

90‑15..... Acquisitions not creditable—amalgamated company registered or required to be registered    313

90‑20..... Liability after amalgamation for GST on amalgamating company’s supplies           314

90‑25..... Entitlement after amalgamation to input tax credits for amalgamating company’s acquisitions 314

90‑30..... Adjustments.................................................................................... 314

90‑35..... Amalgamating companies accounting on a cash basis..................... 315

Division 93—Time limit on entitlements to input tax credits               317

93‑1....... What this Division is about............................................................. 317

93‑5....... Time limit on entitlements to input tax credits................................. 317

93‑10..... Exceptions to time limit on entitlements to input tax credits............ 317

93‑15..... GST ceasing to be payable on the related supply............................ 319

Division 96—Supplies partly connected with Australia                         320

96‑1....... What this Division is about............................................................. 320

96‑5....... Supplies that are only partly connected with Australia.................... 320

96‑10..... The value of the taxable components of supplies that are only partly connected with Australia               321

Division 99—Deposits as security                                                                      322

99‑1....... What this Division is about............................................................. 322

99‑5....... Giving a deposit as security does not constitute consideration........ 322

99‑10..... Attributing the GST relating to deposits that are forfeited etc.......... 322

Division 100—Vouchers                                                                                          323

100‑1..... What this Division is about............................................................. 323

100‑5..... Supplies of vouchers with a stated monetary value......................... 323

100‑10... Redemption of vouchers................................................................. 324

100‑12... Consideration on redemption of vouchers....................................... 324

100‑15... Increasing adjustments for unredeemed vouchers........................... 325

100‑18... Arrangement for supply of voucher................................................ 325

100‑20... Vouchers supplied to non‑residents and redeemed by others in Australia                325

100‑25... Meaning of voucher etc................................................................... 326

Division 102—Cancelled lay‑by sales                                                              327

102‑1..... What this Division is about............................................................. 327

102‑5..... Cancelled lay‑by sales..................................................................... 327

102‑10... Attributing GST and input tax credits............................................. 327

Division 105—Supplies in satisfaction of debts                                           328

105‑1..... What this Division is about............................................................. 328

105‑5..... Supplies by creditors in satisfaction of debts may be taxable supplies 328

105‑10... Net amounts.................................................................................... 329

105‑15... GST returns.................................................................................... 329

105‑20... Payments of GST............................................................................ 329

Division 108—Valuation of taxable supplies of goods in bond           331

108‑1..... What this Division is about............................................................. 331

108‑5..... Taxable supplies of goods in bond etc............................................ 331

Division 110—Tax‑related transactions                                                         332

110‑1..... What this Division is about............................................................. 332

Subdivision 110‑A—Income tax‑related transactions                                  332

110‑5..... Transfers of tax losses and net capital losses.................................. 332

110‑15... Supplies under operation of consolidated group regime.................. 332

110‑20... Tax sharing agreements—entering into agreement etc..................... 333

110‑25... Tax sharing agreements—leaving group clear of group liability..... 333

110‑30... Tax funding agreements.................................................................. 333

Subdivision 110‑B—Other tax‑related transactions                                     334

110‑60... Indirect tax sharing agreements—entering into agreement etc......... 334

110‑65... Indirect tax sharing agreements—leaving GST group or GST joint venture clear of liability   335

Division 111—Reimbursement of employees etc.                                      337

111‑1..... What this Division is about............................................................. 337

111‑5..... Creditable acquisitions relating to reimbursements.......................... 337

111‑10... Amounts of input tax credits relating to reimbursements................ 338

111‑15... Tax invoices relating to reimbursements......................................... 339

111‑18... Application of Division to volunteers working for charitable institutions etc.          339

111‑20... Application of Division to recipients of certain withholding payments 340

111‑25... Employers paying expenses of employees etc................................. 341

111‑30... Reimbursements etc. of former or future employees etc.................. 341

Division 113—PAYG voluntary agreements                                               343

113‑1..... What this Division is about............................................................. 343

113‑5..... Supply of work or services not a taxable supply............................. 343

Part 4‑3—Special rules mainly about importations                                       345

Division 114—Importations without entry for home consumption  345

114‑1..... What this Division is about............................................................. 345

114‑5..... Importations without entry for home consumption......................... 345

114‑10... Goods that have already been entered for home consumption etc... 347

114‑15... Payments of amounts of GST where security for payment of customs duty is forfeited          348

114‑20... Payments of amounts of GST where delivery into home consumption is authorised under section 71 of the Customs Act........................................................................................................ 348

114‑25... Warehoused goods entered for home consumption by an entity other than the importer          348

Division 117—Valuation of re‑imported goods                                          350

117‑1..... What this Division is about............................................................. 350

117‑5..... Valuation of taxable importations of goods that were exported for repair or renovation          350

117‑10... Valuation of taxable importations of live animals that were exported 351

117‑15... Refunds of GST on certain re‑importations of live animals............ 352

Part 4‑4—Special rules mainly about net amounts and adjustments 353

Division 123—Simplified accounting methods for retailers and small enterprise entities           353

123‑1..... What this Division is about............................................................. 353

123‑5..... Commissioner may determine simplified accounting methods........ 353

123‑7..... Meaning of small enterprise entity.................................................. 354

123‑10... Choosing to apply a simplified accounting method......................... 354

123‑15... Net amounts.................................................................................... 355

Division 126—Gambling                                                                                         356

126‑1..... What this Division is about............................................................. 356

126‑5..... Global accounting system for gambling supplies............................ 356

126‑10... Global GST amounts...................................................................... 357

126‑15... Losses carried forward.................................................................... 358

126‑20... Bad debts........................................................................................ 358

126‑25... Application of Subdivision 9‑C...................................................... 358

126‑30... Gambling supplies do not give rise to creditable acquisitions......... 358

126‑32... Repayments of gambling losses are not consideration.................... 359

126‑33... Tax invoices not required for gambling supplies............................. 359

126‑35... Meaning of gambling supply and gambling event........................... 359

Division 129—Changes in the extent of creditable purpose                360

129‑1..... What this Division is about............................................................. 360

Subdivision 129‑A—General                                                                               360

129‑5..... Adjustments arising under this Division......................................... 360

129‑10... Adjustments do not arise under this Division for acquisitions and importations below a certain value    361

129‑15... Adjustments do not arise under this Division where there are adjustments under Division 130              361

Subdivision 129‑B—Adjustment periods                                                          361

129‑20... Adjustment periods......................................................................... 361

129‑25... Effect on adjustment periods of things being disposed of etc.......... 363

Subdivision 129‑C—When adjustments for acquisitions and importations arise          364

129‑40... Working out whether you have an adjustment................................ 364

129‑45... Gifts to gift‑deductible entities........................................................ 365

129‑50... Creditable purpose.......................................................................... 366

129‑55... Meaning of apply............................................................................ 366

Subdivision 129‑D—Amounts of adjustments for acquisitions and importations          367

129‑70... The amount of an increasing adjustment......................................... 367

129‑75... The amount of a decreasing adjustment........................................... 367

129‑80... Effect of adjustment under certain Divisions................................... 368

Subdivision 129‑E—Attributing adjustments under this Division             368

129‑90... Attributing your adjustments for changes in extent of creditable purpose                368

Division 130—Goods applied solely to private or domestic use        369

130‑1..... What this Division is about............................................................. 369

130‑5..... Goods applied solely to private or domestic use............................. 369

Division 131—Annual apportionment of creditable purpose              370

131‑1..... What this Division is about............................................................. 370

Subdivision 131‑A—Electing to have annual apportionment                     370

131‑5..... Eligibility to make an annual apportionment election....................... 370

131‑10... Making an annual apportionment election....................................... 371

131‑15... Annual apportionment elections by representative members of GST groups           371

131‑20... Duration of an annual apportionment election................................. 371

Subdivision 131‑B—Consequences of electing to have annual apportionment              373

131‑40... Input tax credits for acquisitions that are partly creditable............... 373

131‑45... Input tax credits for importations that are partly creditable.............. 374

131‑50... Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars           375

131‑55... Increasing adjustments relating to annually apportioned acquisitions and importations            376

131‑60... Attributing adjustments under section 131‑55................................. 377

Division 132—Supplies of things acquired etc. without full input tax credits     379

132‑1..... What this Division is about............................................................. 379

132‑5..... Decreasing adjustments for supplies of things acquired, imported or applied for a purpose that is not fully creditable........................................................................................................ 379

132‑10... Attribution of adjustments under this Division............................... 380

Division 133—Providing additional consideration under gross‑up clauses         382

133‑1..... What this Division is about............................................................. 382

133‑5..... Decreasing adjustments for additional consideration provided under gross‑up clauses            382

133‑10... Availability of adjustments under Division 19 for acquisitions....... 383

Division 134—Third party payments                                                               384

134‑1..... What this Division is about............................................................. 384

134‑5..... Decreasing adjustments for payments made to third parties............ 384

134‑10... Increasing adjustments for payments received by third parties........ 386

134‑15... Attribution of decreasing adjustments............................................. 388

134‑20... Third party adjustment notes........................................................... 388

134‑25... Adjustment events do not arise....................................................... 389

134‑30... Application of sections 48‑55 and 49‑50........................................ 390

Division 135—Supplies of going concerns                                                     391

135‑1..... What this Division is about............................................................. 391

135‑5..... Initial adjustments for supplies of going concerns.......................... 391

135‑10... Later adjustments for supplies of going concerns........................... 391

Division 136—Bad debts relating to transactions that are not taxable or creditable to the fullest extent                                                                                                                    393

136‑1..... What this Division is about............................................................. 393

Subdivision 136‑A—Bad debts relating to partly taxable or creditable transactions  393

136‑5..... Adjustments relating to partly taxable supplies............................... 393

136‑10... Adjustments in relation to partly creditable acquisitions.................. 394

Subdivision 136‑B—Bad debts relating to transactions that are taxable or creditable at less than 1/11 of the price                                                                                                       395

136‑30... Writing off bad debts (taxable supplies).......................................... 395

136‑35... Recovering amounts previously written off (taxable supplies)........ 396

136‑40... Bad debts written off (creditable acquisitions)................................ 397

136‑45... Recovering amounts previously written off (creditable acquisitions) 399

136‑50... Meanings of taxable at less than 1/11 of the price and creditable at less than 1/11 of the consideration   400

Division 137—Stock on hand on becoming registered etc.                   401

137‑1..... What this Division is about............................................................. 401

137‑5..... Adjustments for stock on hand on becoming registered etc............ 401

Division 138—Cessation of registration                                                         402

138‑1..... What this Division is about............................................................. 402

138‑5..... Adjustments for cessation of registration........................................ 402

138‑10... Attributing adjustments for cessation of registration....................... 403

138‑15... Ceasing to be registered—amounts not previously attributed.......... 403

138‑17... Situations to which this Division does not apply............................ 404

138‑20... Application of Division 129............................................................ 405

Division 139—Distributions from deceased estates                                  406

139‑1..... What this Division is about............................................................. 406

139‑5..... Adjustments for distributions from deceased estates....................... 406

139‑10... Attributing adjustments for distributions from deceased estates...... 407

139‑15... Application of Division 129............................................................ 407

Division 141—Tradex scheme goods                                                               408

141‑1..... What this Division is about............................................................. 408

141‑5..... Adjustments for applying goods contrary to the Tradex Scheme.... 408

141‑10... Meaning of tradex scheme goods etc.............................................. 409

141‑15... Attribution of adjustments under this Division............................... 409

141‑20... Application of Division 129............................................................ 409

Part 4‑5—Special rules mainly about registration                                         410

Division 144—Taxis                                                                                                  410

144‑1..... What this Division is about............................................................. 410

144‑5..... Requirement to register................................................................... 410

Division 149—Government entities                                                                  411

149‑1..... What this Division is about............................................................. 411

149‑5..... Government entities may register.................................................... 411

149‑10... Government entities are not required to be registered...................... 411

149‑15... GST law applies to registered government entities.......................... 412

149‑20... Government entities not required to cancel their registration........... 412

149‑25... Membership requirements of a government GST group................. 412

Part 4‑6—Special rules mainly about tax periods                                          413

Division 151—Annual tax periods                                                                     413

151‑1..... What this Division is about............................................................. 413

Subdivision 151‑A—Electing to have annual tax periods                            413

151‑5..... Eligibility to make an annual tax period election.............................. 413

151‑10... Making an annual tax period election.............................................. 414

151‑15... Annual tax period elections by representative members of GST groups  414

151‑20... When you must make your annual tax period election.................... 414

151‑25... Duration of an annual tax period election........................................ 415

Subdivision 151‑B—Consequences of electing to have annual tax periods 416

151‑40... Annual tax periods.......................................................................... 416

151‑45... When GST returns for annual tax periods must be given................ 417

151‑50... When payments of net amounts for annual tax periods must be made 417

151‑55... An entity’s concluding annual tax period........................................ 418

151‑60... The effect of incapacitation or cessation.......................................... 418

Division 153—Agents etc. and insurance brokers                                    419

153‑1..... What this Division is about............................................................. 419

Subdivision 153‑A—General                                                                               419

153‑5..... Attributing the input tax credits for your creditable acquisitions..... 419

153‑10... Attributing your adjustments........................................................... 420

153‑15... Tax invoices.................................................................................... 420

153‑20... Adjustment notes............................................................................ 421

153‑25... Insurance supplied through insurance brokers................................ 421

Subdivision 153‑B—Principals and intermediaries as separate suppliers or acquirers              422

153‑50... Arrangements under which intermediaries are treated as suppliers or acquirers       422

153‑55... The effect of these arrangements on supplies.................................. 423

153‑60... The effect of these arrangements on acquisitions............................ 424

153‑65... Determinations that supplies or acquisitions are taken to be under these arrangements            425

Division 156—Supplies and acquisitions made on a progressive or periodic basis         426

156‑1..... What this Division is about............................................................. 426

156‑5..... Attributing the GST on progressive or periodic supplies................ 426

156‑10... Attributing the input tax credits on progressive or periodic acquisitions  426

156‑15... Progressive or periodic supplies partly connected with Australia... 427

156‑17... Application of Division 58 to progressive or periodic supplies and acquisitions     427

156‑20... Application of Division 129 to progressive or periodic acquisitions 428

156‑22... Leases etc. treated as being on a progressive or periodic basis........ 428

156‑25... Accounting on a cash basis............................................................. 428

Division 157—Accounting basis of charitable institutions etc.           429

157‑1..... What this Division is about............................................................. 429

157‑5..... Charitable institutions etc. choosing to account on a cash basis...... 429

157‑10... Charitable institutions etc. ceasing to account on a cash basis......... 430

Division 159—Changing your accounting basis                                         431

159‑1..... What this Division is about............................................................. 431

159‑5..... Ceasing to account on a cash basis—amounts not previously attributed  431

159‑10... Ceasing to account on a cash basis—amounts partly attributed....... 432

159‑15... Ceasing to account on a cash basis—bad debts............................... 433

159‑20... Starting to account on a cash basis.................................................. 434

159‑25... Starting to account on a cash basis—bad debts............................... 434

159‑30... Entities ceasing to exist or coming into existence............................ 434

Part 4‑7—Special rules mainly about returns, payments and refunds 435

Division 162—Payment of GST by instalments                                          435

162‑1..... What this Division is about............................................................. 435

Subdivision 162‑A—Electing to pay GST by instalments                            435

162‑5..... Eligibility to elect to pay GST by instalments.................................. 435

162‑10... Your current GST lodgment record................................................ 437

162‑15... Electing to pay GST by instalments................................................ 437

162‑20... Elections by representative members of GST groups...................... 438

162‑25... When you must make your election................................................ 438

162‑30... Duration of your election................................................................ 439

Subdivision 162‑B—Consequences of electing to pay GST by instalments 441

162‑50... GST instalment payers.................................................................... 441

162‑55... Tax periods for GST instalment payers........................................... 441

162‑60... When GST returns for GST instalment payers must be given........ 441

162‑65... The form and contents of GST returns for GST instalment payers. 442

162‑70... Payment of GST instalments........................................................... 442

162‑75... Giving notices relating to GST instalments..................................... 444

162‑80... Certain entities pay only 2 GST instalments for each year.............. 444

162‑85... A GST instalment payer’s concluding tax period............................ 445

162‑90... The effect of incapacitation or cessation.......................................... 445

162‑95... The effect of changing the membership of GST groups.................. 446

162‑100. General interest charge on late payment.......................................... 446

162‑105. Net amounts for GST instalment payers......................................... 447

162‑110. When payments of net amounts must be made—GST instalment payers 447

Subdivision 162‑C—GST instalments                                                               447

162‑130. What are your GST instalments...................................................... 447

162‑135. Notified instalment amounts............................................................ 448

162‑140. Varied instalment amounts.............................................................. 449

162‑145. Your annual GST liability............................................................... 450

Subdivision 162‑D—Penalty payable in certain cases if varied instalment amounts are too low             450

162‑170. What this Subdivision is about........................................................ 450

162‑175. GST payments are less than 85% of annual GST liability............... 451

162‑180. Estimated annual GST amount is less than 85% of annual GST liability  453

162‑185. Shortfall in GST instalments worked out on the basis of estimated annual GST amount         455

162‑190. Periods for which penalty is payable............................................... 456

162‑195. Reduction in penalties if notified instalment amount is less than 25% of annual GST liability 456

162‑200. Reduction in penalties if GST instalment shortfall is made up in a later instalment  457

162‑205. This Subdivision does not create a liability for general interest charge 458

Division 165—Anti‑avoidance                                                                             459

165‑1..... What this Division is about............................................................. 459

Subdivision 165‑A—Application of this Division                                           460

165‑5..... When does this Division operate?................................................... 460

165‑10... When does an entity get a GST benefit from a scheme?.................. 461

165‑15... Matters to be considered in determining purpose or effect.............. 462

Subdivision 165‑B—Commissioner may negate effects of schemes for GST benefits 463

165‑40... Commissioner may negate avoider’s GST benefits......................... 463

165‑45... Commissioner may reduce an entity’s net amount or GST to compensate               464

165‑50... GST or refund payable in accordance with declaration................... 465

165‑55... Commissioner may disregard scheme in making declarations......... 465

165‑60... One declaration may cover several tax periods and importations.... 466

165‑65... Commissioner must give copy of declaration to entity affected....... 466

Division 168—Tourist refund scheme                                                              467

168‑1..... What this Division is about............................................................. 467

168‑5..... Tourist refund scheme..................................................................... 467

168‑10... Supplies later found to be GST‑free supplies.................................. 468

Division 171—Customs security etc. given on taxable importations 470

171‑1..... What this Division is about............................................................. 470

171‑5..... Security or undertaking given under section 162 or 162A of the Customs Act        470

Chapter 5—Miscellaneous                                                                                            472

Part 5‑1—Miscellaneous                                                                                                 472

Division 176—Endorsement of charitable institutions etc.                   472

176‑1..... Endorsement by Commissioner as charitable institution................. 472

176‑5..... Endorsement by Commissioner as trustee of a charitable fund....... 472

Division 177—Miscellaneous                                                                                473

177‑1..... Commonwealth etc. not liable to pay GST...................................... 473

177‑3..... Acquisitions from State or Territory bodies where GST liability is notional            474

177‑5..... Cancellation of exemptions from GST............................................ 474

177‑10... Ministerial determinations............................................................... 474

177‑11... Delegation by Aged Care Secretary................................................ 475

177‑12... GST implications of references to price, value etc. in other Acts.... 476

177‑15... Regulations..................................................................................... 476

Chapter 6—Interpreting this Act                                                                             477

Part 6‑1—Rules for interpreting this Act                                                            477

Division 182—Rules for interpreting this Act                                             477

182‑1..... What forms part of this Act............................................................. 477

182‑5..... What does not form part of this Act................................................ 477

182‑10... Explanatory sections, and their role in interpreting this Act............ 478

182‑15... Schedules 1, 2 and 3....................................................................... 478

Part 6‑2—Meaning of some important concepts                                             479

Division 184—Meaning of entity                                                                        479

184‑1..... Entities............................................................................................ 479

184‑5..... Supplies etc. by partnerships and other unincorporated bodies....... 480

Division 188—Meaning of GST turnover                                                      481

188‑1..... What this Division is about............................................................. 481

188‑5..... Explanation of the turnover thresholds............................................ 481

188‑10... Whether your GST turnover meets, or does not exceed, a turnover threshold          482

188‑15... Current GST turnover..................................................................... 483

188‑20... Projected GST turnover.................................................................. 484

188‑22... Settlements of insurance claims to be disregarded........................... 485

188‑23... Supplies “reverse charged” under Division 83 not to be included in a recipient’s GST turnover             485

188‑24... Supplies to which Subdivision 153‑B applies................................. 485

188‑25... Transfer of capital assets, and termination etc. of enterprise, to be disregarded        486

188‑30... The value of non‑taxable supplies................................................... 486

188‑32... The value of gambling supplies....................................................... 486

188‑35... The value of loans........................................................................... 487

188‑40... Supplies of employee services by overseas entities to be disregarded for the registration turnover threshold          487

Division 189—Exceeding the financial acquisitions threshold            488

189‑1..... What this Division is about............................................................. 488

189‑5..... Exceeding the financial acquisitions threshold—current acquisitions 488

189‑10... Exceeding the financial acquisitions threshold—future acquisitions 489

189‑15... Meaning of financial acquisition..................................................... 490

Division 190—90% owned groups of companies                                       491

190‑1..... 90% owned groups......................................................................... 491

190‑5..... When a company has at least a 90% stake in another company....... 491

Part 6‑3—Dictionary                                                                                                        492

Division 195—Dictionary                                                                                       492

195‑1..... Dictionary....................................................................................... 492

Schedule 1—Food that is not GST‑free                                                                533

1............ Food that is not GST‑free............................................................... 533

2............ Prepared food, bakery products and biscuit goods.......................... 535

3............ Prepared meals................................................................................ 535

4............ Candied peel.................................................................................... 535

5............ Goods that are not biscuit goods..................................................... 535

Schedule 2—Beverages that are GST‑free                                                         536

1............ Beverages that are GST‑free........................................................... 536

2............ Tea, coffee etc................................................................................. 537

3............ Fruit and vegetable juices................................................................ 537

Schedule 3—Medical aids and appliances                                                           538

Notes                                                                                                                                           545


An Act about a goods and services tax to implement A New Tax System, and for related purposes

Chapter 1Introduction

Part 1‑1Preliminary

Division 1Preliminary

1‑1  Short title [see Note 1]

                   This Act may be cited as the A New Tax System (Goods and Services Tax) Act 1999.

1‑2  Commencement

             (1)  This Act commences on 1 July 2000.

1‑3  Commonwealth‑State financial relations

                   The Parliament acknowledges that the Commonwealth:

                     (a)  will introduce legislation to provide that the revenue from the GST will be granted to the States, the Australian Capital Territory and the Northern Territory; and

                     (b)  will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth‑State Financial Relations endorsed at the Special Premiers’ Conference in Canberra on 13 November 1998.

1‑4  States and Territories are bound by the GST law

                   The *GST law binds the Crown in right of each of the States, of the Australian Capital Territory and of the Northern Territory. However, it does not make the Crown liable to be prosecuted for an offence.


 

Part 1‑2Using this Act

Division 2Overview of the GST legislation

2‑1  What this Act is about

                   This Act is about the GST.

                   It begins (in Chapter 2) with the basic rules about the GST, and then sets out in Chapter 3 the exemptions from the GST and in Chapter 4 the special rules that can apply in particular cases.

                   It concludes with definitions and other interpretative material.

Note:          The GST is imposed by 6 Acts, the most important of which are:

(a)           the A New Tax System (Goods and Services Tax Imposition—General) Act 1999; and

(b)           the A New Tax System (Goods and Services Tax Imposition—Customs) Act 1999; and

(c)           the A New Tax System (Goods and Services Tax Imposition—Excise) Act 1999.

2‑5  The basic rules (Chapter 2)

                   Chapter 2 has the basic rules for the GST, including:

   when and how the GST arises, and who is liable to pay it;

   when and how input tax credits arise, and who is entitled to them;

   how to work out payments and refunds of GST;

   when and how the payments and refunds are to be made.

2‑10  The exemptions (Chapter 3)

                   Chapter 3 sets out the supplies and importations that are GST‑free or input taxed.

2‑15  The special rules (Chapter 4)

                   Chapter 4 has special rules which, in particular cases, have the effect of modifying the basic rules in Chapter 2.

Note:          There is a checklist of special rules at the end of Chapter 2 (in Part 2‑8).

2‑20  Miscellaneous (Chapter 5)

                   Chapter 5 deals with miscellaneous matters.

2‑25  Interpretative provisions (Chapter 6)

                   Chapter 6 contains the Dictionary, which sets out a list of all the terms that are defined in this Act. It also sets out the meanings of some important concepts and rules on how to interpret this Act.

2‑30  Administration, collection and recovery provisions in the Taxation Administration Act 1953

                   Parts 3‑10, 4‑15 and 5‑5 in Schedule 1 to the Taxation Administration Act 1953 contain provisions relating to the administration of the GST, and to collection and recovery of amounts of GST.


 

Division 3Defined terms

  

3‑1  When defined terms are identified

             (1)  Many of the terms used in the law relating to the GST are defined.

             (2)  Most defined terms in this Act are identified by an asterisk appearing at the start of the term: as in “*enterprise”. The footnote that goes with the asterisk contains a signpost to the Dictionary definitions starting at section 195‑1.

3‑5  When terms are not identified

             (1)  Once a defined term has been identified by an asterisk, later occurrences of the term in the same subsection are not usually asterisked.

             (2)  Terms are not asterisked in the non‑operative material contained in this Act.

Note:          The non‑operative material is described in Division 4.

             (3)  The following basic terms used throughout the Act are not identified with an asterisk.

 

Common definitions that are not asterisked

Item

This term:

1

acquisition

2

amount

3

Australia

4

Commissioner

5

entity

6

goods

7

GST

8

import

8A

individual

9

input tax credit

10

tax period

11

thing

12

supply

13

you

3‑10  Identifying the defined term in a definition

                   Within a definition, the defined term is identified by bold italics.


 

Division 4Status of Guides and other non‑operative material

  

4‑1  Non‑operative material

                   In addition to the operative provisions themselves, this Act contains other material to help you identify accurately and quickly the provisions that are relevant to you and to help you understand them.

                   This other material falls into 2 main categories.

4‑5  Explanatory sections

                   One category is the explanatory section in many Divisions. Under the section heading “What this Division is about”, a short explanation of the Division appears in boxed text.

                   Explanatory sections form part of this Act but are not operative provisions. In interpreting an operative provision, explanatory sections may only be considered for limited purposes. They are set out in section 182‑10.

4‑10  Other material

                   The other category consists of material such as notes and examples. These also form part of the Act. They are distinguished by type size from the operative provisions (except for formulas), but are not kept separate from them.


 

Chapter 2The basic rules

  

Division 5Introduction

5‑1  What this Chapter is about

This Chapter sets out the basic rules for the GST. In particular, these rules will tell you:

•      where liability for GST arises;

•      where entitlements to input tax credits arise;

•      how the amounts of GST and input tax credits are combined to work out the amount payable by you or to you;

•      when and how that amount is to be paid.

5‑5  The structure of this Chapter

                   The diagram on the next page shows how the basic rules in this Chapter relate to each other. It also shows their relationship with:

•    the exemptions (Chapter 3)—these provisions exempt from the GST what would otherwise be taxable; and

•    the special rules (Chapter 4)—these provisions modify the basic rules in particular situations, often in quite limited ways.


 

Part 2‑1The central provisions

Division 7The central provisions

7‑1  GST and input tax credits

             (1)  GST is payable on *taxable supplies and *taxable importations.

             (2)  Entitlements to input tax credits arise on *creditable acquisitions and *creditable importations.

For taxable supplies and creditable acquisitions, see Part 2‑2.

For taxable importations and creditable importations, see Part 2‑3.

7‑5  Net amounts

                   Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments).

For net amounts (including adjustments to net amounts), see Part 2‑4.

7‑10  Tax periods

                   Every entity that is *registered, or *required to be registered, has tax periods applying to it.

For registration, see Part 2‑5.

For tax periods, see Part 2‑6.

7‑15  Payments and refunds

                   The *net amount for a tax period is the amount that the entity must pay to the Commonwealth, or the Commonwealth must refund to the entity, in respect of the period.

For payments and refunds (and GST returns), see Part 2‑7.

Note:          Refunds may be set off against your other liabilities (if any) under laws administered by the Commissioner.


 

Part 2‑2Supplies and acquisitions

Division 9Taxable supplies

Table of Subdivisions

9‑A       What are taxable supplies?

9‑B        Who is liable for GST on taxable supplies?

9‑C        How much GST is payable on taxable supplies?

9‑1  What this Division is about

GST is payable on taxable supplies. This Division defines taxable supplies, states who is liable for the GST, and describes how to work out the GST on supplies.

Subdivision 9‑AWhat are taxable supplies?

9‑5  Taxable supplies

                   You make a taxable supply if:

                     (a)  you make the supply for *consideration; and

                     (b)  the supply is made in the course or furtherance of an *enterprise that you *carry on; and

                     (c)  the supply is *connected with Australia; and

                     (d)  you are *registered, or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST‑free or *input taxed.

9‑10  Meaning of supply

             (1)  A supply is any form of supply whatsoever.

             (2)  Without limiting subsection (1), supply includes any of these:

                     (a)  a supply of goods;

                     (b)  a supply of services;

                     (c)  a provision of advice or information;

                     (d)  a grant, assignment or surrender of *real property;

                     (e)  a creation, grant, transfer, assignment or surrender of any right;

                      (f)  a *financial supply;

                     (g)  an entry into, or release from, an obligation:

                              (i)  to do anything; or

                             (ii)  to refrain from an act; or

                            (iii)  to tolerate an act or situation;

                     (h)  any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

             (3)  It does not matter whether it is lawful to do, to refrain from doing or to tolerate the act or situation constituting the supply.

          (3A)  For the avoidance of doubt, the delivery of:

                     (a)  livestock for slaughtering or processing into *food; or

                     (b)  game for processing into *food;

under an arrangement under which the entity making the delivery only relinquishes title after food has been produced, is the supply of the livestock or game (regardless of when the entity relinquishes title). The supply does not take place on or after the subsequent relinquishment of title.

             (4)  However, a supply does not include a supply of *money unless the money is provided as *consideration for a supply that is a supply of money.

9‑15  Consideration

             (1)  Consideration includes:

                     (a)  any payment, or any act or forbearance, in connection with a supply of anything; and

                     (b)  any payment, or any act or forbearance, in response to or for the inducement of a supply of anything.

             (2)  It does not matter whether the payment, act or forbearance was voluntary, or whether it was by the *recipient of the supply.

          (2A)  It does not matter:

                     (a)  whether the payment, act or forbearance was in compliance with an order of a court, or of a tribunal or other body that has the power to make orders; or

                     (b)  whether the payment, act or forbearance was in compliance with a settlement relating to proceedings before a court, or before a tribunal or other body that has the power to make orders.

          (2B)  For the avoidance of doubt, the fact that the supplier is an entity of which the *recipient of the supply is a member, or that the supplier is an entity that only makes supplies to its members, does not prevent the payment, act or forbearance from being consideration.

9‑17  Certain payments and other things not consideration

             (1)  If a right or option to acquire a thing is granted, then:

                     (a)  the consideration for the supply of the thing on the exercise of the right or option is limited to any additional consideration provided either for the supply or in connection with the exercise of the right or option; or

                     (b)  if there is no such additional consideration—there is no consideration for the supply.

             (2)  Making a gift to a non‑profit body is not the provision of consideration.

             (3)  A payment is not the provision of consideration if:

                     (a)  the payment is made by a *government related entity to another government related entity for making a supply; and

                     (b)  the payment is:

                              (i)  covered by an appropriation under an *Australian law; or

                             (ii)  made under the National Health Reform Agreement agreed to by the Council of Australian Governments on 2 August 2011, as amended from time to time; or

                            (iii)  made under another agreement entered into to implement the National Health Reform Agreement; and

                     (c)  the payment is calculated on the basis that the sum of:

                              (i)  the payment (including the amounts of any other such payments) relating to the supply; and

                             (ii)  anything (including any payment for any act or forbearance) that the other government related entity receives from another entity in connection with, or in response to, or for the inducement of, the supply, or for any other related supply;

                            does not exceed the supplier’s anticipated or actual costs of making those supplies.

             (4)  A payment is not the provision of consideration if the payment is made by a *government related entity to another government related entity and the payment is of a kind specified in regulations made for the purposes of this subsection.

             (5)  This section applies despite section 9‑15.

9‑20  Enterprises

             (1)  An enterprise is an activity, or series of activities, done:

                     (a)  in the form of a *business; or

                     (b)  in the form of an adventure or concern in the nature of trade; or

                     (c)  on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or

                     (d)  by the trustee of a fund that is covered by, or by an authority or institution that is covered by, Subdivision 30‑B of the *ITAA 1997 and to which deductible gifts can be made; or

                   (da)  by a trustee of a *complying superannuation fund or, if there is no trustee of the fund, by a person who manages the fund; or

                     (e)  by a charitable institution or by a trustee of a charitable fund; or

                      (f)  by a religious institution; or

                     (g)  by the Commonwealth, a State or a Territory, or by a body corporate, or corporation sole, established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or

                     (h)  by a trustee of a fund covered by item 2 of the table in section 30‑15 of the ITAA 1997 or of a fund that would be covered by that item if it had an ABN.

             (2)  However, enterprise does not include an activity, or series of activities, done:

                     (a)  by a person as an employee or in connection with earning *withholding payments covered by subsection (4) (unless the activity or series is done in supplying services as the holder of an office that the person has accepted in the course of or in connection with an activity or series of activities of a kind mentioned in subsection (1)); or

Note:       Acts done as mentioned in paragraph (a) will still form part of the activities of the enterprise to which the person provides work or services.

                     (b)  as a private recreational pursuit or hobby; or

                     (c)  by an individual (other than a trustee of a charitable fund, or of a fund covered by item 2 of the table in section 30‑15 of the ITAA 1997 or of a fund that would be covered by that item if it had an ABN), or a *partnership (all or most of the members of which are individuals), without a reasonable expectation of profit or gain; or

                     (d)  as a member of a local governing body established by or under a *State law or *Territory law (except a local governing body to which paragraph 12‑45(1)(e) in Schedule 1 to the Taxation Administration Act 1953 applies).

             (3)  For the avoidance of doubt, the fact that activities of an entity are limited to making supplies to members of the entity does not prevent those activities:

                     (a)  being in the form of a *business within the meaning of paragraph (1)(a); or

                     (b)  being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).

             (4)  This subsection covers a *withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table.

 

Withholding payments covered

Item

Provision

Subject matter

1

Section 12‑35

Payment to employee

2

Section 12‑40

Payment to company director

3

Section 12‑45

Payment to office holder

4

Section 12‑60

Payment under labour hire arrangement, or specified by regulations

9‑25  Supplies connected with Australia

Supplies of goods wholly within Australia

             (1)  A supply of goods is connected with Australia if the goods are delivered, or made available, in Australia to the *recipient of the supply.

Supplies of goods from Australia

             (2)  A supply of goods that involves the goods being removed from Australia is connected with Australia.

Supplies of goods to Australia

             (3)  A supply of goods that involves the goods being brought to Australia is connected with Australia if the supplier either:

                     (a)  imports the goods into Australia; or

                     (b)  installs or assembles the goods in Australia.

Supplies of real property

             (4)  A supply of *real property is connected with Australia if the real property, or the land to which the real property relates, is in Australia.

Supplies of anything else

             (5)  A supply of anything other than goods or *real property is connected with Australia if:

                     (a)  the thing is done in Australia; or

                     (b)  the supplier makes the supply through an *enterprise that the supplier *carries on in Australia; or

                     (c)  all of the following apply:

                              (i)  neither paragraph (a) nor (b) applies in respect of the thing;

                             (ii)  the thing is a right or option to acquire another thing;

                            (iii)  the supply of the other thing would be connected with Australia.

Example:    A holiday package for Australia that is supplied overseas might be connected with Australia under paragraph (5)(c).

When enterprises are carried on in Australia

             (6)  An *enterprise is carried on in Australia if the enterprise is carried on through:

                     (a)  a permanent establishment (as defined in subsection 6(1) of the Income Tax Assessment Act 1936); or

                     (b)  a place that would be such a permanent establishment if paragraph (e), (f) or (g) of that definition did not apply.

9‑30  Supplies that are GST‑free or input taxed

GST‑free

             (1)  A supply is GST‑free if:

                     (a)  it is GST‑free under Division 38 or under a provision of another Act; or

                     (b)  it is a supply of a right to receive a supply that would be GST‑free under paragraph (a).

Input taxed

             (2)  A supply is input taxed if:

                     (a)  it is input taxed under Division 40 or under a provision of another Act; or

                     (b)  it is a supply of a right to receive a supply that would be input taxed under paragraph (a).

Note:          If a supply is input taxed, there is no entitlement to an input tax credit for the things that are acquired or imported to make the supply (see sections 11‑15 and 15‑10).

Supplies that would be both GST‑free and input taxed

             (3)  To the extent that a supply would, apart from this subsection, be both *GST‑free and *input taxed:

                     (a)  the supply is GST‑free and not input taxed, unless the provision under which it is input taxed requires the supplier to have chosen for its supplies of that kind to be input taxed; or

                     (b)  the supply is input taxed and not GST‑free, if that provision requires the supplier to have so chosen.

Note:          Subdivisions 40‑E (School tuckshops and canteens) and 40‑F (Fund‑raising events conducted by charitable institutions etc.) require such a choice.)

Supply of things used solely in connection with making supplies that are input taxed but not financial supplies

             (4)  A supply is taken to be a supply that is *input taxed if it is a supply of anything (other than *new residential premises) that you have used solely in connection with your supplies that are input taxed but are not *financial supplies.

9‑39  Special rules relating to taxable supplies

                   Chapter 4 contains special rules relating to taxable supplies, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1

Associates

Division 72

2

Cancelled lay‑by sales

Division 102

3

Company amalgamations

Division 90

3A

Compulsory third party schemes

Division 79

4

Deposits as security

Division 99

5

Gambling

Division 126

5A

GST religious groups

Division 49

6

Insurance

Division 78

7

Offshore supplies other than goods or real property

Division 84

8

Payments of taxes, fees and charges

Division 81

8A

Second‑hand goods

Division 66

8B

Settlement sharing arrangements

Division 80

9

Supplies and acquisitions made on a progressive or periodic basis

Division 156

9A

Supplies in return for rights to develop land

Division 82

10

Supplies in satisfaction of debts

Division 105

11

Supplies partly connected with Australia

Division 96

12

Supply under arrangement covered by PAYG voluntary agreement

Division 113

12A

Tax‑related transactions

Division 110

13

Telecommunication supplies

Division 85

14

Vouchers

Division 100

Subdivision 9‑BWho is liable for GST on taxable supplies?

9‑40  Liability for GST on taxable supplies

                   You must pay the GST payable on any *taxable supply that you make.

9‑69  Special rules relating to liability for GST on taxable supplies

                   Chapter 4 contains special rules relating to liability for GST on taxable supplies, as follows:

 

Checklist of special rules

 

Item

For this case ...

See:

1

Company amalgamations

Division 90

2

GST groups

Division 48

3

GST joint ventures

Division 51

4

Offshore supplies other than goods or real property

Division 84

4A

Non‑residents making supplies connected with Australia

Division 83

4B

Representatives of incapacitated entities

Division 58

5

Resident agents acting for non‑residents

Division 57

Subdivision 9‑CHow much GST is payable on taxable supplies?

9‑70  The amount of GST on taxable supplies

                   The amount of GST on a *taxable supply is 10% of the *value of the taxable supply.

9‑75  The value of taxable supplies

             (1)  The value of a *taxable supply is as follows:

where:

price is the sum of:

                     (a)  so far as the *consideration for the supply is consideration expressed as an amount of *money—the amount (without any discount for the amount of GST (if any) payable on the supply); and

                     (b)  so far as the consideration is not consideration expressed as an amount of money—the *GST inclusive market value of that consideration.

Example:    You make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise.

                   The value of the supply is:

                  

                   The GST on the supply is therefore $2,000 (i.e. 10% of $20,000).

             (2)  However, if the taxable supply is of a *luxury car, the value of the taxable supply is as follows:

where:

luxury car tax value has the meaning given by section 5‑20 of the A New Tax System (Luxury Car Tax) Act 1999.

             (3)  In working out under subsection (1) the value of a *taxable supply made in a *tax period, being a supply that is a *fringe benefit, the price is taken to be the sum of:

                     (a)  to the extent that, apart from this subsection, paragraph (a) of the definition of price in subsection (1) would be applicable:

                              (i)  if the fringe benefit is a car fringe benefit—so much of the amount that would be worked out under that paragraph as represented the *recipient’s payment made in that period; or

                             (ii)  if the fringe benefit is a benefit other than a car fringe benefit—so much of the amount that would be worked out under that paragraph as represented the *recipients contribution made in that period; and

                     (b)  to the extent that, apart from this subsection, paragraph (b) of the definition of price in subsection (1) would be applicable:

                              (i)  if the fringe benefit is a car fringe benefit—so much of the amount that would be worked out under that paragraph as represented the recipient’s payment made in that period; or

                             (ii)  if the fringe benefit is a benefit other than a car fringe benefit—so much of the amount that would be worked out under that paragraph as represented the recipients contribution made in that period.

9‑80  The value of taxable supplies that are partly GST‑free or input taxed

             (1)  If a supply (the actual supply) is:

                     (a)  partly a *taxable supply; and

                     (b)  partly a supply that is *GST‑free or *input taxed;

the value of the part of the actual supply that is a taxable supply is the proportion of the value of the actual supply that the taxable supply represents.

             (2)  The value of the actual supply, for the purposes of subsection (1), is as follows:

where:

taxable proportion is the proportion of the value of the actual supply that represents the value of the *taxable supply (expressed as a number between 0 and 1).

9‑85  Value of taxable supplies to be expressed in Australian currency

             (1)  For the purposes of this Act, the *value of a *taxable supply is to be expressed in Australian currency.

             (2)  In working out the *value of a *taxable supply, any amount of the *consideration for the supply that is expressed in a currency other than Australian currency is to be treated as if it were an amount of Australian currency worked out in the manner determined by the Commissioner.

9‑90  Rounding of amounts of GST

One taxable supply recorded on an invoice

             (1)  If the amount of GST on a *taxable supply that is the only taxable supply recorded on a particular *invoice would, apart from this section, be an amount that includes a fraction of a cent, the amount of GST is rounded to the nearest cent (rounding 0.5 cents upwards).

Several taxable supplies recorded on an invoice

             (2)  If 2 or more *taxable supplies are recorded on the same *invoice, the total amount of GST on the supplies is:

                     (a)  what would be the amount of GST if it were worked out by:

                              (i)  working out the GST on each of the supplies (without rounding the amounts to the nearest cent); and

                             (ii)  adding the amounts together and, if the total is an amount that includes a fraction of a cent, rounding it to the nearest cent (rounding 0.5 cents upwards); or

                     (b)  the amount worked out using the following method statement:

Method statement

Step 1.   Work out, for each *taxable supply, what would, apart from this section, be the amount of GST on the supply.

Step 2.   If the amount for the supply has more decimal places than the number of decimal places allowed by the accounting system used to work out the amount, round the amount (up or down as appropriate) to that number of decimal places.

                   Note:       Subsection (4) gives further details of this rounding.

Step 3.   Work out the sum of the amounts worked out under step 1 and (if applicable) step 2 for each supply.

Step 4.   If the sum under step 3 includes a fraction of a cent, round the sum to the nearest cent (rounding 0.5 cents upwards).

             (3)  Whether to use paragraph (2)(a) or paragraph (2)(b) to work out the total amount of GST on the supplies is a matter of choice for:

                     (a)  the supplier if the amount is being worked out to ascertain the supplier’s liability for GST; or

                     (b)  the *recipient of the supplies if the amount is being worked out to ascertain the recipient’s entitlement to input tax credits.

             (4)  In applying step 2 of the method statement in subsection (2), if:

                     (a)  the number of decimal places in the amount for the supply exceeds by one decimal place the number of decimal places allowed by the accounting system used to work out the amount; and

                     (b)  the last digit of the amount (before rounding) is 5;

the amount is rounded upwards to that number of decimal places.

Taxable supplies divided into items

             (5)  If one or more *taxable supplies recorded on the same *invoice are divided into 2 or more items:

                     (a)  subsection (1) does not apply; and

                     (b)  subsection (2) applies as if each such item represented a separate taxable supply.

Taxable supplies recorded on documents other than invoices

             (6)  If one or more *taxable supplies, none of which are recorded on an *invoice, are recorded on a document that is not an invoice, this section applies as if the document were an invoice.

9‑99  Special rules relating to the amount of GST on taxable supplies

                   Chapter 4 contains special rules relating to the amount of GST on taxable supplies, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1

Associates

Division 72

2

Company amalgamations

Division 90

2A

Compulsory third party schemes

Division 79

3

Gambling

Division 126

4

Long‑term accommodation in commercial residential premises

Division 87

4AA

Non‑residents making supplies connected with Australia

Division 83

4A

Offshore supplies other than goods or real property

Division 84

5

Sale of freehold interests etc.

Division 75

7

Supplies partly connected with Australia

Division 96

8

Transactions relating to insurance policies

Division 78

9

Valuation of taxable supplies of goods in bond

Division 108

Note:          There are other laws that may affect the amount of GST on taxable supplies. For example, see subsection 357‑60(3) in Schedule 1 to the Taxation Administration Act 1953 (about the effect of rulings made under Part 5‑5 in that Schedule).


 

Division 11Creditable acquisitions

11‑1  What this Division is about

You are entitled to input tax credits for your creditable acquisitions. This Division defines creditable acquisitions, states who is entitled to the input tax credits and describes how to work out the input tax credits on acquisitions.

11‑5  What is a creditable acquisition?

                   You make a creditable acquisition if:

                     (a)  you acquire anything solely or partly for a *creditable purpose; and

                     (b)  the supply of the thing to you is a *taxable supply; and

                     (c)  you provide, or are liable to provide, *consideration for the supply; and

                     (d)  you are *registered, or *required to be registered.

11‑10  Meaning of acquisition

             (1)  An acquisition is any form of acquisition whatsoever.

             (2)  Without limiting subsection (1), acquisition includes any of these:

                     (a)  an acquisition of goods;

                     (b)  an acquisition of services;

                     (c)  a receipt of advice or information;

                     (d)  an acceptance of a grant, assignment or surrender of *real property;

                     (e)  an acceptance of a grant, transfer, assignment or surrender of any right;

                      (f)  an acquisition of something the supply of which is a *financial supply;

                     (g)  an acquisition of a right to require another person:

                              (i)  to do anything; or

                             (ii)  to refrain from an act; or

                            (iii)  to tolerate an act or situation;

                     (h)  any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

             (3)  However, an acquisition does not include an acquisition of *money unless the money is provided as *consideration for a supply that is a supply of money.

11‑15  Meaning of creditable purpose

             (1)  You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise.

             (2)  However, you do not acquire the thing for a creditable purpose to the extent that:

                     (a)  the acquisition relates to making supplies that would be *input taxed; or

                     (b)  the acquisition is of a private or domestic nature.

             (3)  An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia.

             (4)  An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if:

                     (a)  the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and

                     (b)  you do not *exceed the financial acquisitions threshold.

             (5)  An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that:

                     (a)  the acquisition relates to making a *financial supply consisting of a borrowing; and

                     (b)  the borrowing relates to you making supplies that are not input taxed.

11‑20  Who is entitled to input tax credits for creditable acquisitions?

                   You are entitled to the input tax credit for any *creditable acquisition that you make.

11‑25  How much are the input tax credits for creditable acquisitions?

                   The amount of the input tax credit for a *creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired. However, the amount of the input tax credit is reduced if the acquisition is only *partly creditable.

Note:          The basic rule for working out the GST payable on the supply is in Subdivision 9‑C. However, the GST payable may be affected by other provisions in:

(a)    this Act (for a list of provisions, see section 9‑99); and

(b)    other GST laws (for example, see subsection 357‑60(3) in Schedule 1 to the Taxation Administration Act 1953 (about the effect of rulings made under Part 5‑5 in that Schedule)).

11‑30  Acquisitions that are partly creditable

             (1)  An acquisition that you make is partly creditable if it is a *creditable acquisition to which one or both of the following apply:

                     (a)  you make the acquisition only partly for a *creditable purpose;

                     (b)  you provide, or are liable to provide, only part of the *consideration for the acquisition.

             (3)  The amount of the input tax credit on an acquisition that you make that is *partly creditable is as follows:

where:

extent of consideration is the extent to which you provide, or are liable to provide, the *consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition.

extent of creditable purpose is the extent to which the *creditable acquisition is for a *creditable purpose, expressed as a percentage of the total purpose of the acquisition.

full input tax credit is what would have been the amount of the input tax credit for the acquisition if it had been made solely for a creditable purpose and you had provided, or had been liable to provide, all of the consideration for the acquisition.

             (4)  For the purpose of working out the extent of the *consideration, so far as the consideration is not expressed as an amount of *money, take into account the *GST inclusive market value of the consideration.

             (5)  The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which a *creditable acquisition is for a *creditable purpose.

11‑99  Special rules relating to acquisitions

                   Chapter 4 contains special rules relating to acquisitions, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1B

Annual apportionment of creditable purpose

Division 131

1

Associates

Division 72

2

Company amalgamations

Division 90

2A

Compulsory third party schemes

Division 79

3

Financial supplies (reduced credit acquisitions)

Division 70

3A

Fringe benefits provided by input taxed suppliers

Division 71

4

Gambling

Division 126

5

GST groups

Division 48

6

GST joint ventures

Division 51

6A

GST religious groups

Division 49

7

Insurance

Division 78

8

Non‑deductible expenses

Division 69

8A

Offshore supplies other than goods or real property

Division 84

9

Pre‑establishment costs

Division 60

10

Reimbursement of employees etc.

Division 111

10A

Representatives of incapacitated entities

Division 58

11

Resident agents acting for non‑residents

Division 57

13

Sale of freehold interests etc.

Division 75

14

Second‑hand goods

Division 66

15

Settlement sharing arrangements

Division 80

16

Time limit on entitlements to input tax credits

Division 93


 

Part 2‑3Importations

Division 13Taxable importations

13‑1  What this Division is about

GST is payable on taxable importations. This Division defines taxable importations, states who is liable for the GST and describes how to work out the GST on importations.

Note 1:       This Division applies whether or not you are registered.

Note 2:       Things other than goods that are supplied overseas for use in Australia (and are therefore in that sense “imported”) are not taxable importations, but they can attract GST under Division 84.

13‑5  What are taxable importations?

             (1)  You make a taxable importation if:

                     (a)  goods are imported; and

                     (b)  you enter the goods for home consumption (within the meaning of the Customs Act 1901).

However, the importation is not a taxable importation to the extent that it is a *non‑taxable importation.

Note:          There is no registration requirement for taxable importations, and the importer need not be carrying on an enterprise.

             (3)  However, an importation of *money is not an importation of goods into Australia.

13‑10  Meaning of non‑taxable importation

                   An importation is a non‑taxable importation if:

                     (a)  it is a non‑taxable importation under Part 3‑2; or

                     (b)  it would have been a supply that was *GST‑free or *input taxed if it had been a supply.

13‑15  Who is liable for GST on taxable importations?

                   You must pay the GST payable on any *taxable importation that you make.

13‑20  How much GST is payable on taxable importations?

             (1)  The amount of GST on the *taxable importation is 10% of the *value of the taxable importation.

             (2)  The value of a *taxable importation is the sum of:

                     (a)  the *customs value of the goods imported; and

                     (b)  the amount paid or payable:

                              (i)  for the *international transport of the goods to their *place of consignment in Australia; and

                             (ii)  to insure the goods for that transport;

                            to the extent that the amount is not already included under paragraph (a); and

                   (ba)  the amount paid or payable for a supply to which item 5A in the table in subsection 38‑355(1) applies, to the extent that the amount:

                              (i)  is not an amount, the payment of which (or the discharging of a liability to make a payment of which), because of Division 81 or regulations made under that Division, is not the provision of *consideration; and

Note:       Division 81 excludes certain taxes, fees and charges from the provision of consideration.

                             (ii)  is not already included under paragraph (a) or (b); and

                     (c)  any *customs duty payable in respect of the importation of the goods; and

                     (d)  any *wine tax payable in respect of the *local entry of the goods.

          (2A)  If an amount to be taken into account under paragraph (2)(b) or (ba) is not an amount in Australian currency, the amount so taken into account is the equivalent in Australian currency of that amount, ascertained in the way provided in section 161J of the Customs Act 1901.

             (3)  The Commissioner may, in writing:

                     (a)  determine the way in which the amount paid or payable for a specified kind of transport or insurance is to be worked out for the purposes of paragraph (2)(b); and

                     (b)  determine the way in which the amount paid or payable for a specified kind of supply referred to in paragraph (2)(ba) is to be worked out for the purposes of that paragraph; and

                     (c)  in relation to importations of a specified kind or importations to which specified circumstances apply—determine that:

                              (i)  the amount paid or payable for a specified kind of transport or insurance is taken, for the purposes of paragraph (2)(b), to be zero; or

                             (ii)  the amount paid or payable for a specified kind of supply referred to in paragraph (2)(ba) is taken, for the purposes of that paragraph, to be zero.

13‑25  The value of taxable importations that are partly non‑taxable importations

                   If an importation (the actual importation) is:

                     (a)  partly a *taxable importation; and

                     (b)  partly a *non‑taxable importation;

the value of the part of the actual importation that is a taxable importation is the proportion of the value of the actual importation (worked out as if it were solely a taxable importation) that the taxable importation represents.

13‑99  Special rules relating to taxable importations

                   Chapter 4 contains special rules relating to taxable importations, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1

GST groups

Division 48

2

GST joint ventures

Division 51

3

Importations without entry for home consumption

Division 114

4

Representatives of incapacitated entities

Division 58

5

Resident agents acting for non‑residents

Division 57

6

Valuation of re‑imported goods

Division 117

Note:          There are other laws that may affect the amount of GST on taxable importations. For example, see subsection 357‑60(3) in Schedule 1 to the Taxation Administration Act 1953 (about the effect of rulings made under Part 5‑5 in that Schedule).


 

Division 15Creditable importations

15‑1  What this Division is about

You are entitled to input tax credits for your creditable importations. This Division defines creditable importations, states who is entitled to the input tax credits and describes how to work out the input tax credits on importations.

15‑5  What are creditable importations?

                   You make a creditable importation if:

                     (a)  you import goods solely or partly for a *creditable purpose; and

                     (b)  the importation is a *taxable importation; and

                     (c)  you are *registered, or *required to be registered.

15‑10  Meaning of creditable purpose

             (1)  You import goods for a creditable purpose to the extent that you import the goods in *carrying on your *enterprise.

             (2)  However, you do not import the goods for a creditable purpose to the extent that:

                     (a)  the importation relates to making supplies that would be *input taxed; or

                     (b)  the importation is of a private or domestic nature.

             (3)  An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia.

             (4)  An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if:

                     (a)  the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and

                     (b)  you do not *exceed the financial acquisitions threshold.

             (5)  An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that:

                     (a)  the importation relates to making a *financial supply consisting of a borrowing; and

                     (b)  the borrowing relates to you making supplies that are not input taxed.

15‑15  Who is entitled to input tax credits for creditable importations?

                   You are entitled to the input tax credit for any *creditable importation that you make.

15‑20  How much are the input tax credits for creditable importations?

                   The amount of input tax credit for a *creditable importation is an amount equal to the GST payable on the importation. However, the amount of the input tax credit is reduced if the importation is only *partly creditable.

Note:          The basic rule for working out the GST payable on the importation is in section 13‑20. However, the GST payable may be affected by other provisions in:

(a)    this Act (for a list of provisions, see section 13‑99); and

(b)    other GST laws (for example, see subsection 357‑60(3) in Schedule 1 to the Taxation Administration Act 1953 (about the effect of rulings made under Part 5‑5 in that Schedule)).

15‑25  Importations that are partly creditable

             (1)  An importation that you make is partly creditable if it is a *creditable importation that you make only partly for a *creditable purpose.

             (3)  The amount of the input tax credit on an importation that you make that is *partly creditable is as follows:

where:

extent of creditable purpose is the extent to which the importation is for a *creditable purpose, expressed as a percentage of the total purpose of the importation.

full input tax credit is what would have been the amount of the input tax credit for the importation if it had been made solely for a creditable purpose.

             (4)  The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which an importation is for a *creditable purpose.

15‑99  Special rules relating to creditable importations

                   Chapter 4 contains special rules relating to creditable importations, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1AA

Annual apportionment of creditable purpose

Division 131

1A

Fringe benefits provided by input taxed suppliers

Division 71

1

GST groups

Division 48

2

GST joint ventures

Division 51

2AA

Importations without entry for home consumption

Division 114

2A

Non‑deductible expenses

Division 69

3

Pre‑establishment costs

Division 60

3A

Representatives of incapacitated entities

Division 58

4

Resident agents acting for non‑residents

Division 57


 

Part 2‑4Net amounts and adjustments

Division 17Net amounts and adjustments

17‑1  What this Division is about

A net amount is worked out for each tax period that applies to you. This is the amount payable by you to the Commonwealth, or payable to you by the Commonwealth, for the tax period.

Adjustments can be made to the net amount. Increasing adjustments increase your net amount, and decreasing adjustments decrease your net amount.

Note 1:       GST on taxable importations is not included in the net amount. It is dealt with separately under section 33‑15.

Note 2:       Net amounts payable to the Commonwealth are to be paid to the Commissioner on the Commonwealth’s behalf (see Division 33).

17‑5  Net amounts

             (1)  The net amount for a tax period applying to you is worked out using the following formula:

where:

GST is the sum of all of the GST for which you are liable on the *taxable supplies that are attributable to the tax period.

input tax credits is the sum of all of the input tax credits to which you are entitled for the *creditable acquisitions and *creditable importations that are attributable to the tax period.

For the basic rules on what is attributable to a particular period, see Division 29.

             (2)  However, the *net amount for the tax period may be increased or decreased if you have any *adjustments for the tax period.

17‑10  Adjustments

                   If you have any *adjustments that are attributable to a tax period applying to you, alter your *net amount for the period as follows:

                     (a)  add to the amount worked out under subsection 17‑5(1) for the period the sum of all the *increasing adjustments (if any) that are attributable to the period;

                     (b)  subtract from that amount the sum of all the *decreasing adjustments (if any) that are attributable to the period.

For the basic rules on what adjustments are attributable to a particular period, see Division 29.

17‑15  Working out net amounts using approved forms

             (1)  You may choose to work out your *net amount for a tax period in the way specified in an *approved form if you use the form to notify the Commissioner of that net amount. The amount so worked out is treated as your net amount for the tax period.

Note:          Choosing to use section 17‑5 to work out your net amount does not mean your GST return is not in the approved form: see subsection 31‑15(3).

             (2)  This section has effect despite section 17‑5.

17‑20  Determinations relating to how to work out net amounts

             (1)  The Commissioner may make a determination that, in the circumstances specified in the determination, a *net amount for a tax period may be worked out to take account of other matters in the way specified in the determination.

             (2)  The matters must relate to correction of errors made in working out *net amounts for the immediately preceding tax period.

             (3)  If those circumstances apply in relation to a tax period applying to you, you may work out your *net amount for the tax period in that way.

17‑99  Special rules relating to net amounts or adjustments

                   Chapter 4 contains special rules relating to net amounts or adjustments, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Annual apportionment of creditable purpose

Division 131

1

Anti‑avoidance

Division 165

2

Cessation of registration

Division 138

3

Changes in the extent of creditable purpose

Division 129

4

Company amalgamations

Division 90

4AA

Compulsory third party schemes

Division 79

4A

Distributions from deceased estates

Division 139

5

Gambling

Division 126

5A

Goods applied solely to private or domestic use

Division 130

6

GST branches

Division 54

7

GST groups

Division 48

8

GST joint ventures

Division 51

8A

GST religious groups

Division 49

9

Insurance

Division 78

9AA

Non‑deductible expenses

Division 69

9A

Non‑profit sub‑entities

Division 63

9B

Payment of GST by instalments

Division 162

9C

Providing additional consideration under gross‑up clauses

Division 133

10

Representatives of incapacitated entities

Division 58

11

Resident agents acting for non‑residents

Division 57

11A

Sale of freehold interests etc.

Division 75

12

Second‑hand goods

Division 66

12AA

Settlement sharing arrangements

Division 80

12A

Simplified accounting methods for retailers and small enterprise entities

Division 123

12B

Stock on hand on becoming registered etc.

Division 137

13

Supplies in satisfaction of debts

Division 105

14

Supplies of going concerns

Division 135

15

Supplies of things acquired etc. without full input tax credits

Division 132

15A

Third party payments

Division 134

16

Tradex scheme goods

Division 141

17

Vouchers

Division 100


 

Division 19Adjustment events

Table of Subdivisions

19‑A     Adjustment events

19‑B      Adjustments for supplies

19‑C      Adjustments for acquisitions

19‑1  What this Division is about

Adjustments can arise because of adjustment events. They are events such as a cancellation of a supply or acquisition, or a change in the consideration for a supply or acquisition (for example, because of a volume discount).

Note:          Importations do not give rise to adjustment events.

19‑5  Explanation of the effect of adjustment events

                   The following diagram shows how an *adjustment event for a supply or acquisition can give rise to an *increasing adjustment or a *decreasing adjustment.

 

 

Note:          This section is an explanatory section.

Subdivision 19‑AAdjustment events

19‑10  Adjustment events

             (1)  An adjustment event is any event which has the effect of:

                     (a)  cancelling a supply or acquisition; or

                     (b)  changing the *consideration for a supply or acquisition; or

                     (c)  causing a supply or acquisition to become, or stop being, a *taxable supply or *creditable acquisition.

Example:    If goods that are supplied for export are not exported within the time provided in section 38‑185, the supply is likely to become a taxable supply after originally being a supply that was GST‑free.

             (2)  Without limiting subsection (1), these are *adjustment events:

                     (a)  the return to a supplier of a thing, or part of a thing, supplied (whether or not the return involves a change of ownership of the thing);

                     (b)  a change to the previously agreed *consideration for a supply or acquisition, whether due to the offer of a discount or otherwise;

                     (c)  a change in the extent to which an entity that makes an acquisition provides, or is liable to provide, consideration for the acquisition (unless the entity *accounts on a cash basis).

             (3)  An *adjustment event:

                     (a)  can arise in relation to a supply even if it is not a *taxable supply; and

                     (b)  can arise in relation to an acquisition even if it is not a *creditable acquisition.

             (4)  However, the return of a thing supplied, or part of a thing supplied, to its supplier is not an *adjustment event if the return is for the purpose of repair or maintenance.

Subdivision 19‑BAdjustments for supplies

19‑40  Where adjustments for supplies arise

                   You have an adjustment for a supply for which you are liable to pay GST (or would be liable to pay GST if it were a *taxable supply) if:

                     (a)  in relation to the supply, one or more *adjustment events occur during a tax period; and

                     (b)  GST on the supply was attributable to an earlier tax period (or, if the supply was not a taxable supply, would have been attributable to an earlier tax period had the supply been a taxable supply); and

                     (c)  as a result of those adjustment events, the *previously attributed GST amount for the supply (if any) no longer correctly reflects the amount of GST (if any) on the supply (the corrected GST amount), taking into account any change of circumstances that has given rise to an adjustment for the supply under this Subdivision or Division 21 or 134.

19‑45  Previously attributed GST amounts

                   The previously attributed GST amount for a supply is:

                     (a)  the amount of any GST that was attributable to a tax period in respect of the supply; plus

                     (b)  the sum of any *increasing adjustments, under this Subdivision or Division 21, that were previously attributable to a tax period in respect of the supply; minus

                     (c)  the sum of any *decreasing adjustments, under this Subdivision or Division 21 or 134, that were previously attributable to a tax period in respect of the supply.

19‑50  Increasing adjustments for supplies

                   If the *corrected GST amount is greater than the *previously attributed GST amount, you have an increasing adjustment equal to the difference between the corrected GST amount and the previously attributed GST amount.

19‑55  Decreasing adjustments for supplies

                   If the *corrected GST amount is less than the *previously attributed GST amount, you have a decreasing adjustment equal to the difference between the previously attributed GST amount and the corrected GST amount.

Subdivision 19‑CAdjustments for acquisitions

19‑70  Where adjustments for acquisitions arise

             (1)  You have an adjustment for an acquisition for which you are entitled to an input tax credit (or would be entitled to an input tax credit if the acquisition were a *creditable acquisition) if:

                     (a)  in relation to the acquisition, one or more *adjustment events occur during a tax period; and

                     (b)  an input tax credit on the acquisition was attributable to an earlier tax period (or, if the acquisition was not a creditable acquisition, would have been attributable to an earlier tax period had the acquisition been a creditable acquisition); and

                     (c)  as a result of those adjustment events, the *previously attributed input tax credit amount for the acquisition (if any) no longer correctly reflects the amount of the input tax credit (if any) on the acquisition (the corrected input tax credit amount).

             (2)  In working out the *corrected input tax credit amount for the acquisition:

                     (a)  take into account any change of circumstances that has given rise to an adjustment for the acquisition under this Subdivision or Division 21, 129, 133 or 134; and

                     (b)  if an adjustment relating to the acquisition under Division 131 was attributable to an earlier tax period:

                              (i)  do not take into account that adjustment; and

                             (ii)  treat the acquisition as one in relation to which Division 131 had not applied.

19‑75  Previously attributed input tax credit amounts

                   The previously attributed input tax credit amount for an acquisition is:

                     (a)  the amount of any input tax credit that was attributable to a tax period in respect of the acquisition; minus

                     (b)  the sum of any *increasing adjustments, under this Subdivision or Division 21, 129, 131 or 134, that were previously attributable to a tax period in respect of the acquisition; plus

                     (c)  the sum of any *decreasing adjustments, under this Subdivision or Division 21, 129 or 133, that were previously attributable to a tax period in respect of the acquisition.

19‑80  Increasing adjustments for acquisitions

                   If the *previously attributed input tax credit amount is greater than the *corrected input tax credit amount, you have an increasing adjustment equal to the difference between the previously attributed input tax credit amount and the corrected input tax credit amount.

19‑85  Decreasing adjustments for acquisitions

                   If the *previously attributed input tax credit amount is less than the *corrected input tax credit amount, you have a decreasing adjustment equal to the difference between the corrected input tax credit amount and the previously attributed input tax credit amount.

19‑99  Special rules relating to adjustment events

                   Chapter 4 contains special rules relating to *adjustment events in particular cases, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1AA

Compulsory third party schemes

Division 79

1A

GST religious groups

Division 49

1

Insurance

Division 78

2

Non‑deductible expenses

Division 69

2A

Providing additional consideration under gross‑up clauses

Division 133

3

Settlement sharing arrangements

Division 80

4

Third party payments

Division 134


 

Division 21Bad debts

21‑1  What this Division is about

If debts are written off as bad or are outstanding after 12 months, adjustments (for the purpose of working out net amounts) are made. They can arise both for amounts written off or outstanding and for recovery of amounts previously written off or outstanding.

Note:          This Division does not apply to supplies and acquisitions that you account for on a cash basis (except in the limited circumstances referred to in Division 159).

21‑5  Writing off bad debts (taxable supplies)

             (1)  You have a decreasing adjustment if:

                     (a)  you made a *taxable supply; and

                     (b)  the whole or part of the *consideration for the supply has not been received; and

                     (c)  you write off as bad the whole or a part of the debt, or the whole or a part of the debt has been *overdue for 12 months or more.

The amount of the decreasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.

             (2)  However, you cannot have an *adjustment under this section if you *account on a cash basis.

21‑10  Recovering amounts previously written off (taxable supplies)

                   You have an increasing adjustment if:

                     (a)  you made a *taxable supply in relation to which you had a *decreasing adjustment under section 21‑5 for a debt; and

                     (b)  you recover the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires.

The amount of the increasing adjustment is 1/11 of the amount recovered.

21‑15  Bad debts written off (creditable acquisitions)

             (1)  You have an increasing adjustment if:

                     (a)  you made a *creditable acquisition for *consideration; and

                     (b)  the whole or part of the consideration is *overdue, but you have not provided the consideration overdue; and

                     (c)  the supplier of the thing you acquired writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more.

The amount of the increasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.

             (2)  However, you cannot have an *adjustment under this section if you *account on a cash basis.

21‑20  Recovering amounts previously written off (creditable acquisitions)

                   You have a decreasing adjustment if:

                     (a)  you made a *creditable acquisition in relation to which you had an *increasing adjustment under section 21‑15 for a debt; and

                     (b)  you pay to the supplier of the thing you acquired the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires.

The amount of the decreasing adjustment is 1/11 of the amount recovered.

21‑99  Special rules relating to adjustments for bad debts

                   Chapter 4 contains special rules relating to adjustments for bad debts, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Bad debts relating to transactions that are not taxable or creditable to the fullest extent

Division 136

1

Changing your accounting basis

Division 159

2

Gambling

Division 126

2A

Representatives of incapacitated entities

Division 58

3

Sale of freehold interests etc.

Division 75


 

Part 2‑5Registration

Division 23Who is required to be registered and who may be registered

23‑1  Explanation of Division

                   This diagram shows when you are required to be, and when you may, be registered.

 

Note:          This section is an explanatory section.

23‑5  Who is required to be registered

                   You are required to be registered under this Act if:

                     (a)  you are *carrying on an *enterprise; and

                     (b)  your *GST turnover meets the *registration turnover threshold.

Note:          It is the entity that carries on the enterprise that is required to be registered (and not the enterprise).

23‑10  Who may be registered

             (1)  You may be *registered under this Act if you are carrying on an *enterprise (whether or not your *GST turnover is at, above or below the *registration turnover threshold).

             (2)  You may be *registered under this Act if you intend to carry on an *enterprise from a particular date.

23‑15  The registration turnover threshold

             (1)  Your registration turnover threshold (unless you are a non‑profit body) is:

                     (a)  $50,000; or

                     (b)  such higher amount as the regulations specify.

             (2)  Your registration turnover threshold if you are a non‑profit body is:

                     (a)  $100,000; or

                     (b)  such higher amount as the regulations specify.

23‑99  Special rules relating to who is required to be registered or who may be registered

                   Chapter 4 contains special rules relating to who is *required to be registered, or who may be *registered, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Government entities

Division 149

1B

Non‑profit sub‑entities

Division 63

1

Representatives of incapacitated entities

Division 58

2

Resident agents acting for non‑residents

Division 57

3

Taxis

Division 144


 

Division 25How you become registered, and how your registration can be cancelled

Table of Subdivisions

25‑A     How you become registered

25‑B      How your registration can be cancelled

Subdivision 25‑AHow you become registered

25‑1  When you must apply for registration

                   You must apply, in the *approved form, to be *registered under this Act if:

                     (a)  you are not registered under this Act; and

                     (b)  you are *required to be registered.

You must make your application within 21 days after becoming required to be registered.

25‑5  When the Commissioner must register you

             (1)  The Commissioner must *register you if:

                     (a)  you have applied for registration in an *approved form; and

                     (b)  the Commissioner is satisfied that you are *carrying on an *enterprise, or you intend to carry on an enterprise from a particular date specified in your application.

Note:          Refusing to register you under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The Commissioner must *register you (even if you have not applied for registration) if the Commissioner is satisfied that you are *required to be registered.

Note:          Registering you under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (3)  The Commissioner must notify you in writing of any decision he or she makes in relation to you under this section. If the Commissioner decides to register you, the notice must specify the following:

                     (a)  the date of effect of your registration;

                     (b)  your registration number;

                     (c)  the tax periods that apply to you.

25‑10  The date of effect of your registration

             (1)  The Commissioner must decide the date from which your *registration takes effect, or took effect. However:

                     (a)  if you did not apply for registration and the Commissioner is satisfied that you are *required to be registered—the date of effect must not be a day before the day on which you became required to be registered; or

                     (b)  if you applied for registration—the date of effect must not be a day before:

                              (i)  the day specified in your application; or

                             (ii)  if the Commissioner is satisfied that you became required to be registered on an earlier day—the day that the Commissioner is satisfied is that earlier day; or

                     (c)  if you are being registered only because you intend to *carry on an *enterprise—the date of effect must not be a day before the day specified, in your application for registration, as the day from which you intend to carry on the enterprise.

Note:          Deciding the date of effect of your registration is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The *Australian Business Registrar must enter in the *Australian Business Register the date on which your *registration takes or took effect.

25‑15  Effect of backdating your registration

                   If the Commissioner decides under section 25‑10, as the date of effect of your *registration (your registration day), a day before the day of the decision, then you are taken:

                     (a)  for the purpose of determining whether a supply you made on or after your registration day was a *taxable supply; and

                     (b)  for the purpose of determining whether an acquisition you made on or after that day was a *creditable acquisition; and

                     (c)  for the purpose of determining whether an importation you made on or after that day was a *creditable importation;

to have been registered from and including your registration day.

Note:          This section ensures that backdating your registration enables your supplies and acquisitions made on or after the date of effect to be picked up by the GST system. Section 25‑10 limits the extent to which your registration can be backdated.

25‑49  Special rules relating to registration

                   Chapter 4 contains special rules relating to *registration in particular cases, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Government entities

Division 149

1

GST branches

Division 54

2

Non‑profit sub‑entities

Division 63

3

Non‑residents making supplies connected with Australia

Division 83

Subdivision 25‑BHow your registration can be cancelled

25‑50  When you must apply for cancellation of registration

                   If you are *registered and you are not *carrying on any *enterprise, you must apply to the Commissioner in the *approved form for cancellation of your *registration. You must lodge your application within 21 days after the day on which you ceased to be carrying on any *enterprise.

25‑55  When the Commissioner must cancel registration

             (1)  The Commissioner must cancel your *registration if:

                     (a)  you have applied for cancellation of registration in the *approved form; and

                     (b)  at the time you applied for cancellation of registration, you had been registered for at least 12 months; and

                     (c)  the Commissioner is satisfied that you are not *required to be registered.

Note:          Refusing to cancel your registration under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The Commissioner must cancel your *registration (even if you have not applied for cancellation of your registration) if:

                     (a)  the Commissioner is satisfied that you are not *carrying on an *enterprise; and

                     (b)  the Commissioner believes on reasonable grounds that you are not likely to carry on an enterprise for at least 12 months.

Note:          Cancelling your registration under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (3)  The Commissioner must notify you of any decision he or she makes in relation to you under this section. If the Commissioner decides to cancel your registration, the notice must specify the date of effect of the cancellation.

25‑57  When the Commissioner may cancel your registration

             (1)  The Commissioner may cancel your *registration if:

                     (a)  less than 12 months after being registered, you apply for cancellation of registration in the *approved form; and

                     (b)  the Commissioner is satisfied that you are not *required to be registered.

Note:          Refusing to cancel your registration under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  In considering your application, the Commissioner may have regard to:

                     (a)  how long you have been *registered; and

                     (b)  whether you have previously been registered; and

                     (c)  any other relevant matters.

             (3)  The Commissioner must notify you of any decision he or she makes in relation to you under this section. If the Commissioner decides to cancel your registration, the notice must specify the date of effect of the cancellation.

25‑60  The date of effect of your cancellation

             (1)  The Commissioner must decide the date on which the cancellation of your *registration under subsection 25‑55(1) or (2) or section 25‑57 takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision.

Note:          Deciding the date of effect of the cancellation of your registration is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The *Australian Business Registrar must enter in the *Australian Business Register the date on which the cancellation of your *registration takes effect.

25‑65  Effect of backdating your cancellation of registration

                   If the Commissioner decides under section 25‑60, as the date of effect of the cancellation of your *registration (your cancellation day), a day before the day of the decision, your registration is taken:

                     (a)  for the purpose of determining whether a supply you made on or after your cancellation day was a *taxable supply; and

                     (b)  for the purpose of determining whether an acquisition you made on or after that day was a *creditable acquisition; and

                     (c)  for the purpose of determining whether an importation you made on or after that date was a *creditable importation;

to have been cancelled from and including your cancellation day.

25‑99  Special rules relating to cancellation of registration

                   Chapter 4 contains special rules relating to cancellation of *registration in particular cases, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Government entities

Division 149

1

GST branches

Division 54

1B

Non‑profit sub‑entities

Division 63

2

Representatives of incapacitated entities

Division 58

3

Resident agents acting for non‑residents

Division 57


 

Part 2‑6Tax periods

Division 27How to work out the tax periods that apply to you

27‑1  What this Division is about

This Division tells you the tax periods that apply to you. You need to know this because your net amounts (the amounts payable by you or to you) are worked out in respect of these tax periods.

27‑5  General rule—3 month tax periods

                   The tax periods that apply to you are each period of 3 months ending on 31 March, 30 June, 30 September or 31 December in any year, except to the extent that:

                     (a)  an election is in force under section 27‑10; or

                     (b)  the Commissioner determines otherwise under this Division.

Note:          Several provisions in Chapter 4 provide for different tax periods. In particular, Division 151 provides for annual tax periods.

27‑10  Election of one month tax periods

             (1)  The tax periods that apply to you are each individual month if, by notifying the Commissioner in the *approved form, you elect to have as the tax periods that apply to you each individual month.

             (2)  The election takes effect on the day specified in the notice. However, the day specified must be 1 January, 1 April, 1 July or 1 October.

27‑15  Determination of one month tax periods

             (1)  The Commissioner must determine that the tax periods that apply to you are each individual month if:

                     (a)  the Commissioner is satisfied that your *GST turnover meets the *tax period turnover threshold; or

                     (b)  the Commissioner is satisfied that the period for which you will be *carrying on an *enterprise in Australia is less than 3 months; or

                     (c)  the Commissioner is satisfied that you have a history of failing to comply with your obligations under a *taxation law.

Note:          Determining under this section the tax periods applying to you is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The determination takes effect on the day specified in the determination. However, the day specified must be 1 January, 1 April, 1 July or 1 October.

Note:          Deciding the date of effect of the determination is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (3)  The tax period turnover threshold is:

                     (a)  $20 million; or

                     (b)  such other amount as the regulations specify.

However, if the regulations change the tax period turnover threshold, the change does not apply to you until the start of the next tax period that starts after the regulation in question comes into operation.

27‑20  Withdrawing elections of one month tax periods

             (1)  You may, by notifying the Commissioner in the *approved form, withdraw an election under section 27‑10, unless your *GST turnover meets the *tax period turnover threshold.

             (2)  The withdrawal takes effect on the day specified in the notice. However, the day specified:

                     (a)  must be 1 January, 1 April, 1 July or 1 October, or any day occurring before the election takes effect; and

                     (b)  must not be a day occurring earlier than 12 months after the election took effect.

27‑22  Revoking elections of one month tax periods

             (1)  The Commissioner may, if you so request in the *approved form, revoke your election under section 27‑10, with effect from a day occurring earlier than 12 months after the election took effect, unless the Commissioner is satisfied that your *GST turnover meets the *tax period turnover threshold.

Note:          Refusing to revoke your election under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  In considering your request, the Commissioner may have regard to:

                     (a)  for how long the tax periods applying to you have been each individual month; and

                     (b)  whether you have previously been *registered, and whether such tax periods had applied to you; and

                     (c)  any other relevant matters.

             (3)  The revocation:

                     (a)  takes effect on the day specified in the instrument of revocation; or

                     (b)  is taken to have had effect from a past day specified in the instrument of revocation.

However, the day specified must be 1 January, 1 April, 1 July or 1 October.

Note:          Deciding the date of effect of the revocation is a reviewable decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

27‑25  Revoking determinations of one month tax periods

             (1)  The Commissioner must revoke a determination under section 27‑15 relating to you if you so request, unless the Commissioner is satisfied that any of the grounds for making a determination under that section apply to you.

Note:          Refusing to revoke a determination under this section is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The revocation takes effect on the day specified in the instrument of revocation. However, the day specified:

                     (a)  must be 1 January, 1 April, 1 July or 1 October; and

                     (b)  must not be a day occurring earlier than 12 months after the determination took effect.

Note:          Deciding the date of effect of the revocation is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

27‑30  Tax periods determined by the Commissioner to take account of changes in tax periods

             (1)  For the purpose of ensuring the effective operation of this Division where:

                     (a)  you become *registered or *required to be registered; or

                     (b)  the tax periods applying to you have changed;

the Commissioner may, by written notice given to you, determine that a period specified in the notice is a tax period that applies to you.

Note:          Determining under this section a tax period applying to you is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The period specified in the notice may start earlier than the day on which the notice is given to you.

             (3)  However, the period specified in the notice:

                     (a)  must be less than 3 months; and

                     (b)  must not overlap with any part of any other tax period for which you have already given a *GST return to the Commissioner.

For the giving of GST returns to the Commissioner, see Division 31.

27‑35  Changing the days on which your tax periods end

             (1)  You may change the day in each year on which a tax period would otherwise end. However:

                     (a)  the day must be no more than 7 days earlier or 7 days later than a day on which one of the tax periods that applies to you would otherwise end if the days were not changed; and

                     (b)  the change must be consistent with the commercial accounting periods that apply to you.

             (2)  If the day on which a tax period ends is changed, the next tax period starts on the day after that day.

27‑37  Special determination of tax periods on request

             (1)  The Commissioner may, in accordance with a request you make in the *approved form, determine the tax periods applying to you to be the tax periods specified in the request if the Commissioner is satisfied that:

                     (a)  your *GST turnover meets the *tax period turnover threshold; and

                     (b)  the tax periods specified in the request are consistent with the commercial accounting periods that apply to you; and

                     (c)  the tax periods specified in the request would, if determined under this section, result in 12 complete tax periods in each year; and

                     (d)  any other requirements specified in the regulations are complied with.

Note:          Refusing a request for a determination under this section is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  A determination under this section overrides any determination under section 27‑15 or 27‑30 relating to tax periods applying to you.

27‑38  Revoking special determination of tax periods

             (1)  The Commissioner must revoke a determination under section 27‑37 if the Commissioner is satisfied that any of the requirements of paragraphs 27‑37(1)(a), (b), (c) and (d) are not complied with.

Note:          Revoking a determination under this section is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The revocation takes effect on the day specified in the instrument of revocation. However, the day specified must be 1 January, 1 April, 1 July or 1 October.

Note:          Deciding the date of effect of the revocation is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (3)  A revocation under this section revives any election under section 27‑10, or any determination under section 27‑15 or 27‑30, relating to tax periods applying to you.

27‑39  Tax periods of incapacitated entities

             (1)  If an entity becomes an *incapacitated entity, the entity’s tax period at the time is taken to have ended at the end of the day before the entity became incapacitated.

             (2)  If a tax period (the first tax period) ends on a particular day because of subsection (1), the next tax period starts on the day after that day and ends when the first tax period would have ended but for that subsection.

27‑40  An entity’s concluding tax period

             (1)  If:

                     (a)  an individual dies; or

                     (b)  another entity for any reason ceases to exist;

the individual’s or entity’s tax period at the time is taken to have ceased at the end of the day before the death or cessation.

          (1A)  If an entity ceases to *carry on any *enterprise, the entity’s tax period at the time is taken to have ceased at the end of the day on which the cessation occurred.

             (2)  If an entity’s *registration is cancelled, the entity’s tax period at the date of effect of the cancellation (the cancellation day) ceases at the end of the cancellation day.

27‑99  Special rules relating to tax periods

                   Chapter 4 contains special rules relating to tax periods, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1AAA

Annual tax periods

Division 151

1

Changes in the extent of creditable purpose

Division 129

1AA

GST groups

Division 48

1AB

Payment of GST by instalments

Division 162

1A

Representatives of incapacitated entities

Division 58

2

Resident agents acting for non‑residents

Division 57


 

Division 29What is attributable to tax periods

Table of Subdivisions

29‑A     The attribution rules

29‑B      Accounting on a cash basis

29‑C      Tax invoices and adjustment notes

29‑1  What this Division is about

This Division tells you the tax periods to which your taxable supplies, creditable acquisitions, creditable importations and adjustments are attributable. You need to know this to work out your net amounts under Part 2‑4.

Note:          This Division does not deal with your taxable importations, because they are not attributed to tax periods. See section 33‑15 for payment of GST on taxable importations.

Subdivision 29‑AThe attribution rules

29‑5  Attributing the GST on your taxable supplies

             (1)  The GST payable by you on a *taxable supply is attributable to:

                     (a)  the tax period in which any of the *consideration is received for the supply; or

                     (b)  if, before any of the consideration is received, an *invoice is issued relating to the supply—the tax period in which the invoice is issued.

             (2)  However, if you *account on a cash basis, then:

                     (a)  if, in a tax period, all of the *consideration is received for a *taxable supply—GST on the supply is attributable to that tax period; or

                     (b)  if, in a tax period, part of the consideration is received—GST on the supply is attributable to that tax period, but only to the extent that the consideration is received in that tax period; or

                     (c)  if, in a tax period, none of the consideration is received—none of the GST on the supply is attributable to that tax period.

29‑10  Attributing the input tax credits for your creditable acquisitions

             (1)  The input tax credit to which you are entitled for a *creditable acquisition is attributable to:

                     (a)  the tax period in which you provide any of the *consideration for the acquisition; or

                     (b)  if, before you provide any of the consideration, an *invoice is issued relating to the acquisition—the tax period in which the invoice is issued.

             (2)  However, if you *account on a cash basis, then:

                     (a)  if, in a tax period, you provide all of the *consideration for a *creditable acquisition—the input tax credit for the acquisition is attributable to that tax period; or

                     (b)  if, in a tax period, you provide part of the consideration—the input tax credit for the acquisition is attributable to that tax period, but only to the extent that you provided the consideration in that tax period; or

                     (c)  if, in a tax period, none of the consideration is provided—none of the input tax credit for the acquisition is attributable to that tax period.

             (3)  If you do not hold a *tax invoice for a *creditable acquisition when you give to the Commissioner a *GST return for the tax period to which the input tax credit (or any part of the input tax credit) on the acquisition would otherwise be attributable:

                     (a)  the input tax credit (including any part of the input tax credit) is not attributable to that tax period; and

                     (b)  the input tax credit (or part) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you hold that tax invoice.

However, this subsection does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for a tax invoice does not apply.

For the giving of GST returns to the Commissioner, see Division 31.

             (4)  If the *GST return for a tax period states a *net amount that does not take into account an input tax credit attributable to that tax period:

                     (a)  the input tax credit is not attributable to that tax period; and

                     (b)  the input tax credit is attributable to the first tax period for which you give the Commissioner a GST return that does take it into account.

Note:          Section 93‑5 may provide a time limit on your entitlement to an input tax credit.

29‑15  Attributing the input tax credits for your creditable importations

             (1)  The input tax credit to which you are entitled for a *creditable importation is attributable to the tax period in which you pay the GST on the importation.

             (2)  However, if paragraph 33‑15(1)(b) applies to payment of the GST on the importation, the input tax credit is attributable to the tax period in which the liability for the GST arose.

29‑20  Attributing your adjustments

             (1)  An *adjustment that you have is attributable to the tax period in which you become aware of the adjustment.

             (2)  However, if you *account on a cash basis, and the *adjustment arises from an *adjustment event as a result of which you are liable to provide *consideration, then:

                     (a)  if, in a tax period, all of the consideration is provided—the *adjustment is attributable to that tax period; or

                     (b)  if, in a tax period, part of the consideration is provided—the adjustment is attributable to that tax period, but only to the extent that the consideration is provided in that tax period; or

                     (c)  if, in a tax period, none of the consideration is provided—none of the adjustment is attributable to that tax period.

             (3)  If:

                     (a)  you have a *decreasing adjustment arising from an *adjustment event; and

                     (b)  you do not hold an *adjustment note for the adjustment when you give to the Commissioner a *GST return for the tax period to which the adjustment (or any part of the adjustment) would otherwise be attributable;

then:

                     (c)  the adjustment (including any part of the adjustment) is not attributable to that tax period; and

                     (d)  the adjustment (or part) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you hold that adjustment note.

However, this subsection does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for an adjustment note does not apply.

For the giving of GST returns to the Commissioner, see Division 31.

29‑25  Commissioner may determine particular attribution rules

             (1)  The Commissioner may, in writing, determine the tax periods to which:

                     (a)  GST on *taxable supplies of a specified kind; or

                     (b)  input tax credits for *creditable acquisitions of a specified kind; or

                     (c)  input tax credits for *creditable importations of a specified kind; or

                     (d)  *adjustments of a specified kind;

are attributable.

             (2)  However, the Commissioner must not make a determination under this section unless satisfied that it is necessary to prevent the provisions of this Division and Chapter 4 applying in a way that is inappropriate in circumstances involving:

                     (a)  a supply or acquisition in which possession of goods passes, but title in the goods will, or may, pass at some time in the future; or

                     (b)  a supply or acquisition for which payment is made or an *invoice is issued, but use, enjoyment or passing of title will, or may, occur at some time in the future; or

                     (c)  a supply or acquisition occurring, but still being subject to a statutory cooling off period under an *Australian law; or

                     (d)  a supply or acquisition occurring before the supplier or *recipient knows it has occurred; or

                     (e)  a supply or acquisition occurring before the supplier or recipient knows the total *consideration; or

                      (f)  a supply or acquisition made under a contract that is subject to preconditions; or

                     (g)  a supply or acquisition made under a contract that provides for retention of some or all of the consideration until certain conditions are met; or

                     (h)  a supply or acquisition for which the GST treatment will be unknown until a later supply is made.

             (3)  Determinations under subsection (1) override the provisions of this Division (except this section) and Chapter 4, but only to the extent of any inconsistency.

29‑39  Special rules relating to attribution rules

                   Chapter 4 contains special rules relating to attribution rules, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1

Agents and insurance brokers

Division 153

2

Associates

Division 72

3

Cancelled lay‑by sales

Division 102

4

Cessation of registration

Division 138

5

Changes in the extent of creditable purpose

Division 129

6

Changing your accounting basis

Division 159

7

Company amalgamations

Division 90

8

Deposits as security

Division 99

8A

Distributions from deceased estates

Division 139

8B

Non‑deductible expenses

Division 69

9

Pre‑establishment costs

Division 60

10

Reimbursement of employees etc.

Division 111

11

Representatives of incapacitated entities

Division 58

11A

Second‑hand goods

Division 66

12

Supplies and acquisitions made on a progressive or periodic basis

Division 156

13

Supplies of things acquired etc. without full input tax credits

Division 132

13A

Third party payments

Division 134

14

Tradex scheme goods

Division 141

Subdivision 29‑BAccounting on a cash basis

29‑40  Choosing to account on a cash basis

             (1)  You may choose to *account on a cash basis, with effect from the first day of the tax period that you choose, if:

                     (a)  you are a *small business entity (other than because of subsection 328‑110(4) of the *ITAA 1997) for the *income year in which you make your choice; or

                   (ab)  you do not carry on a *business and your *GST turnover does not exceed the *cash accounting turnover threshold; or

                     (b)  for income tax purposes, you account for your income using the receipts method; or

                     (c)  each of the *enterprises that you *carry on is an enterprise of a kind that the Commissioner determines, in writing, to be a kind of enterprise in respect of which a choice to *account on a cash basis may be made under this section.

             (3)  The cash accounting turnover threshold is:

                     (a)  $2 million; or

                     (b)  such higher amount as the regulations specify.

29‑45  Permission to account on a cash basis

             (1)  The Commissioner may permit you to *account on a cash basis if:

                     (a)  you apply to the Commissioner in the *approved form for permission to account on a cash basis; and

                     (b)  the Commissioner is satisfied that, having regard to:

                              (i)  the nature and size of the *enterprise that you *carry on; and

                             (ii)  the nature of the accounting system that you use;

                            it is appropriate to permit you to account on a cash basis.

Note:          Refusing to permit you to account on a cash basis is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (2)  The Commissioner must notify you in writing of any decision he or she makes in relation to you under this section. If the Commissioner decides to permit you to *account on a cash basis, the notice must specify the date of effect of your permission.

Note:          Deciding the date of effect of your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

29‑50  Ceasing to account on a cash basis

             (1)  You cease to *account on a cash basis if:

                     (a)  in a case to which paragraph 29‑40(1)(a) applied—you are not a *small business entity of the kind referred to in that paragraph for an *income year and you do not have permission to *account on a cash basis; or

                   (ab)  in a case to which paragraph 29‑40(1)(ab) applied—you do not satisfy the requirements of that paragraph and you do not have permission to account on a cash basis; or

                     (b)  you notify the Commissioner, in the *approved form, that you are ceasing to *account on a cash basis.

             (2)  The date of effect of your cessation is the first day of the next tax period to commence after:

                     (a)  if paragraph (1)(a) applies—the start of the *income year referred to in that paragraph; or

                     (b)  if paragraph (1)(ab) applies—you do not satisfy the requirements of paragraph 29‑40(1)(ab); or

                     (c)  if paragraph (1)(b) applies—you notify the Commissioner.

             (3)  The Commissioner must revoke any permission for you to *account on a cash basis if the Commissioner is satisfied that:

                     (a)  either:

                              (i)  you carry on a *business but you are not a *small business entity (other than because of subsection 328‑110(4) of the *ITAA 1997) for an *income year; or

                             (ii)  you do not carry on a business and your *GST turnover meets the *cash accounting turnover threshold; and

                     (b)  it is not appropriate to permit you to account on a cash basis.

Note:          Revoking your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (4)  The Commissioner must notify you in writing of his or her decision under subsection (3). The notice must specify the date of effect of the revocation, which can be the first day of any tax period starting before, on or after the day on which the Commissioner makes the decision.

Note:          Deciding the date of effect of the revocation of your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

29‑69  Special rules relating to accounting on a cash basis

                   Chapter 4 contains special rules relating to accounting on a cash basis, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1

Accounting basis of charitable institutions etc.

Division 157

Subdivision 29‑CTax invoices and adjustment notes

29‑70  Tax invoices

             (1)  A tax invoice is a document that complies with the following requirements:

                     (a)  it is issued by the supplier of the supply or supplies to which the document relates, unless it is a *recipient created tax invoice (in which case it is issued by the *recipient);

                     (b)  it is in the *approved form;

                     (c)  it contains enough information to enable the following to be clearly ascertained:

                              (i)  the supplier’s identity and the supplier’s *ABN;

                             (ii)  if the total *price of the supply or supplies is at least $1,000 or such higher amount as the regulations specify, or if the document was issued by the recipient—the recipient’s identity or the recipient’s ABN;

                            (iii)  what is supplied, including the quantity (if applicable) and the price of what is supplied;

                            (iv)  the extent to which each supply to which the document relates is a *taxable supply;

                             (v)  the date the document is issued;

                            (vi)  the amount of GST (if any) payable in relation to each supply to which the document relates;

                           (vii)  if the document was issued by the recipient and GST is payable in relation to any supply—that the GST is payable by the supplier;

                          (viii)  such other matters as the regulations specify;

                     (d)  it can be clearly ascertained from the document that the document was intended to be a tax invoice or, if it was issued by the recipient, a recipient created tax invoice.

Note:          If the recipient is a member of a GST group, section 48‑57 may relax the requirements relating to the recipient’s identity or the recipient’s ABN.

          (1A)  A document issued by an entity to another entity may be treated by the other entity as a *tax invoice for the purposes of this Act if:

                     (a)  it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information; and

                     (b)  all of that information can be clearly ascertained from other documents given by the entity to the other entity.

Note:          The requirements for a tax invoices are primarily contained in subsection (1), but can be affected by sections 48‑57 and 54‑50.

          (1B)  However, the Commissioner may treat as a *tax invoice a particular document that would not, apart from this subsection, be a tax invoice.

Note:          A request to the Commissioner, to which the Commissioner agrees, to treat a document as a tax invoice is taken to be a notification of your entitlement to the relevant input tax credit: see subsection 105‑55(2A) in Schedule 1 to the Taxation Administration Act 1953.

             (2)  The supplier of a *taxable supply must, within 28 days after the *recipient of the supply requests it, give to the recipient a *tax invoice for the supply, unless it is a *recipient created tax invoice.

             (3)  A recipient created tax invoice is a *tax invoice belonging to a class of tax invoices that the Commissioner has determined in writing may be issued by the *recipient of a *taxable supply.

29‑75  Adjustment notes

             (1)  An adjustment note for an *adjustment that arises from an *adjustment event relating to a *taxable supply:

                     (a)  must be issued by the supplier of the *taxable supply in the circumstances set out in subsection (2); and

                     (b)  must set out the *ABN of the entity that issues it; and

                     (c)  must contain such other information as the Commissioner determines in writing; and

                     (d)  must be in the *approved form.

However, the Commissioner may treat as an adjustment note a particular document that is not an adjustment note.

             (2)  The supplier of the *taxable supply must:

                     (a)  within 28 days after the *recipient of the supply requests the supplier to give an *adjustment note for the *adjustment relating to the supply; or

                     (b)  if the supplier has issued a *tax invoice in relation to the supply (or the recipient has requested one) and the supplier becomes aware of the adjustment before an adjustment note is requested—within 28 days after becoming aware of that fact;

give to the recipient an *adjustment note for the *adjustment, unless any *tax invoice relating to the supply would have been a *recipient created tax invoice (in which case it must be issued by the recipient).

             (3)  However, in circumstances that the Commissioner determines in writing, paragraph (2)(b) has effect as if the number of days referred to in that paragraph is the number of days specified in the determination in relation to those circumstances.

             (4)  Those circumstances may, for example, include the kind of the *taxable supply.

29‑80  Tax invoices and adjustment notes not required for low value transactions

             (1)  Subsections 29‑10(3) and 29‑70(2) do not apply to a *creditable acquisition that relates to a *taxable supply the *value of which does not exceed $50, or such higher amount as the regulations specify.

             (2)  Subsections 29‑20(3) and 29‑75(2) do not apply to a *decreasing adjustment of an amount that does not exceed $50, or such higher amount as the regulations specify.

29‑99  Special rules relating to tax invoices and adjustment notes

                   Chapter 4 contains special rules relating to tax invoices and adjustment notes, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1

Agents and insurance brokers

Division 153

1A

Annual apportionment of creditable purpose

Division 131

2

Gambling

Division 126

3

GST branches

Division 54

3A

GST groups

Division 48

4

Non‑residents making supplies connected with Australia

Division 83

5

Sale of freehold interests etc

Division 75


 

Part 2‑7Ret