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

Authoritative Version
Act No. 55 of 1999 as amended, taking into account amendments up to Online Safety (Transitional Provisions and Consequential Amendments) Act 2021
An Act about a goods and services tax to implement A New Tax System, and for related purposes
Administered by: Treasury
General Comments: Section 38-510 of this Act has been modified by the operation of the Commissioner’s Remedial Power, click here to see the modification.
Registered 30 Sep 2021
Start Date 01 Sep 2021
Table of contents.

Commonwealth Coat of Arms of Australia

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

No. 55, 1999

Compilation No. 86

Compilation date:                              1 September 2021

Includes amendments up to:            Act No. 77, 2021

Registered:                                         30 September 2021

This compilation is in 2 volumes

Volume 1:       sections 1‑1 to 113‑5

Volume 2:       sections 114‑1 to 195‑1

                        Schedules

                        Endnotes

Each volume has its own contents

This compilation includes a commenced amendment made by Act No. 2, 2021. The amendment made by Act No. 77, 2021 has not commenced but is noted in the endnotes.

About this compilation

This compilation

This is a compilation of the A New Tax System (Goods and Services Tax) Act 1999 that shows the text of the law as amended and in force on 1 September 2021 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

  

  

  


Contents

Chapter 4—The special rules                                                                             1

Part 4‑3—Special rules mainly about importations                                           1

Division 114—Importations without entry for home consumption      1

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

114‑5..................... Importations without entry for home consumption............. 1

114‑10................... Goods that have already been entered for home consumption etc.           4

114‑15................... Payments of amounts of assessed GST where security for payment of customs duty is forfeited           4

114‑20................... Payments of amounts of assessed GST where delivery into home consumption is authorised under section 71 of the Customs Act............................................................. 4

114‑25................... Warehoused goods entered for home consumption by an entity other than the importer          5

Division 117—Valuation of re‑imported goods                                              6

117‑1..................... What this Division is about................................................. 6

117‑5..................... Valuation of taxable importations of goods that were exported for repair or renovation          6

117‑10................... Valuation of taxable importations of live animals that were exported       7

117‑15................... Refunds of assessed GST on certain reimportations of live animals        8

Part 4‑4—Special rules mainly about net amounts and adjustments     9

Division 123—Simplified accounting methods for retailers and small enterprise entities           9

123‑1..................... What this Division is about................................................. 9

123‑5..................... Commissioner may determine simplified accounting methods 9

123‑7..................... Meaning of small enterprise entity................................... 10

123‑10................... Choosing to apply a simplified accounting method........... 11

123‑15................... Net amounts...................................................................... 12

Division 126—Gambling                                                                                           13

126‑1..................... What this Division is about............................................... 13

126‑5..................... Global accounting system for gambling supplies.............. 13

126‑10................... Global GST amounts........................................................ 14

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

126‑20................... Bad debts.......................................................................... 15

126‑25................... Application of Subdivision 9‑C........................................ 16

126‑27................... When gambling supplies are connected with the indirect tax zone           16

126‑30................... Gambling supplies do not give rise to creditable acquisitions  16

126‑32................... Repayments of gambling losses are not consideration...... 16

126‑33................... Tax invoices not required for gambling supplies.............. 17

126‑35................... Meaning of gambling supply and gambling event............ 17

Division 129—Changes in the extent of creditable purpose                  18

129‑1..................... What this Division is about............................................... 18

Subdivision 129‑A—General                                                                                 18

129‑5..................... Adjustments arising under this Division........................... 18

129‑10................... Adjustments do not arise under this Division for acquisitions and importations below a certain value    19

129‑15................... Adjustments do not arise under this Division where there are adjustments under Division 130              19

Subdivision 129‑B—Adjustment periods                                                            19

129‑20................... Adjustment periods........................................................... 19

129‑25................... Effect on adjustment periods of things being disposed of etc.  21

Subdivision 129‑C—When adjustments for acquisitions and importations arise          22

129‑40................... Working out whether you have an adjustment.................. 22

129‑45................... Gifts to gift‑deductible entities.......................................... 23

129‑50................... Creditable purpose............................................................ 24

129‑55................... Meaning of apply.............................................................. 24

Subdivision 129‑D—Amounts of adjustments for acquisitions and importations          25

129‑70................... The amount of an increasing adjustment........................... 25

129‑75................... The amount of a decreasing adjustment............................ 25

129‑80................... Effect of adjustment under certain Divisions.................... 26

Subdivision 129‑E—Attributing adjustments under this Division               26

129‑90................... Attributing your adjustments for changes in extent of creditable purpose                26

Division 130—Goods applied solely to private or domestic use          27

130‑1..................... What this Division is about............................................... 27

130‑5..................... Goods applied solely to private or domestic use............... 27

Division 131—Annual apportionment of creditable purpose                28

131‑1..................... What this Division is about............................................... 28

Subdivision 131‑A—Electing to have annual apportionment                       28

131‑5..................... Eligibility to make an annual apportionment election........ 28

131‑10................... Making an annual apportionment election......................... 29

131‑15................... Annual apportionment elections by representative members of GST groups           29

131‑20................... Duration of an annual apportionment election................... 29

Subdivision 131‑B—Consequences of electing to have annual apportionment              31

131‑40................... Input tax credits for acquisitions that are partly creditable. 31

131‑45................... Input tax credits for importations that are partly creditable 32

131‑50................... Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars           33

131‑55................... Increasing adjustments relating to annually apportioned acquisitions and importations           34

131‑60................... Attributing adjustments under section 131‑55.................. 35

Division 132—Supplies of things acquired etc. without full input tax credits     38

132‑1..................... What this Division is about............................................... 38

132‑5..................... Decreasing adjustments for supplies of things acquired, imported or applied for a purpose that is not fully creditable........................................................................... 38

132‑10................... Attribution of adjustments under this Division................. 39

Division 133—Providing additional consideration under gross‑up clauses         41

133‑1..................... What this Division is about............................................... 41

133‑5..................... Decreasing adjustments for additional consideration provided under gross‑up clauses           41

133‑10................... Availability of adjustments under Division 19 for acquisitions                42

Division 134—Third party payments                                                                 44

134‑1..................... What this Division is about............................................... 44

134‑5..................... Decreasing adjustments for payments made to third parties 44

134‑10................... Increasing adjustments for payments received by third parties 46

134‑15................... Attribution of decreasing adjustments............................... 48

134‑20................... Third party adjustment notes............................................. 49

134‑25................... Adjustment events do not arise......................................... 50

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

Division 135—Supplies of going concerns                                                       51

135‑1..................... What this Division is about............................................... 51

135‑5..................... Initial adjustments for supplies of going concerns............ 51

135‑10................... Later adjustments for supplies of going concerns............. 52

Division 136—Bad debts relating to transactions that are not taxable or creditable to the fullest extent                                                                                                                      53

136‑1..................... What this Division is about............................................... 53

Subdivision 136‑A—Bad debts relating to partly taxable or creditable transactions  53

136‑5..................... Adjustments relating to partly taxable supplies................. 53

136‑10................... Adjustments in relation to partly creditable acquisitions... 54

Subdivision 136‑B—Bad debts relating to transactions that are taxable or creditable at less than 1/11 of the price                                                                                                         55

136‑30................... Writing off bad debts (taxable supplies)........................... 55

136‑35................... Recovering amounts previously written off (taxable supplies) 56

136‑40................... Bad debts written off (creditable acquisitions).................. 58

136‑45................... Recovering amounts previously written off (creditable acquisitions)       59

136‑50................... Meanings of taxable at less than 1/11 of the price and creditable at less than 1/11 of the consideration   60

Division 137—Stock on hand on becoming registered etc.                     61

137‑1..................... What this Division is about............................................... 61

137‑5..................... Adjustments for stock on hand on becoming registered etc. 61

Division 138—Cessation of registration                                                           62

138‑1..................... What this Division is about............................................... 62

138‑5..................... Adjustments for cessation of registration.......................... 62

138‑10................... Attributing adjustments for cessation of registration......... 63

138‑15................... Ceasing to be registered—amounts not previously attributed.. 63

138‑17................... Situations to which this Division does not apply.............. 64

138‑20................... Application of Division 129............................................. 65

Division 139—Distributions from deceased estates                                    66

139‑1..................... What this Division is about............................................... 66

139‑5..................... Adjustments for distributions from deceased estates........ 66

139‑10................... Attributing adjustments for distributions from deceased estates               67

139‑15................... Application of Division 129............................................. 67

Division 141—Tradex scheme goods                                                                 68

141‑1..................... What this Division is about............................................... 68

141‑5..................... Adjustments for applying goods contrary to the Tradex Scheme             68

141‑10................... Meaning of tradex scheme goods etc................................ 69

141‑15................... Attribution of adjustments under this Division................. 69

141‑20................... Application of Division 129............................................. 69

Division 142—Excess GST                                                                                      70

142‑1..................... What this Division is about............................................... 70

Subdivision 142‑A—Excess GST unrelated to adjustments                           70

142‑5..................... When this Subdivision applies.......................................... 70

142‑10................... Refunding the excess GST............................................... 71

142‑15................... When section 142‑10 does not apply................................ 71

142‑16................... No refund of excess GST relating to supplies treated as non‑taxable importations  72

Subdivision 142‑B—GST related to cancelled supplies                                  73

142‑20................... Refunding GST relating to cancelled supplies.................. 73

Subdivision 142‑C—Passed‑on GST                                                                    74

142‑25................... Working out if GST has been passed on.......................... 74

Part 4‑5—Special rules mainly about registration                                           75

Division 144—Taxis                                                                                                    75

144‑1..................... What this Division is about............................................... 75

144‑5..................... Requirement to register..................................................... 75

Division 146—Limited registration entities                                                    76

146‑1..................... What this Division is about............................................... 76

146‑5..................... Limited registration entities............................................... 76

146‑10................... Limited registration entities cannot make creditable acquisitions              77

146‑15................... Limited registration entities cannot make creditable importations             78

146‑20................... Entries in the Australian Business Register...................... 78

146‑25................... Limited registration entities have only quarterly tax periods 79

Division 149—Government entities                                                                    80

149‑1..................... What this Division is about............................................... 80

149‑5..................... Government entities may register...................................... 80

149‑10................... Government entities are not required to be registered....... 80

149‑15................... GST law applies to registered government entities........... 81

149‑20................... Government entities not required to cancel their registration 81

149‑25................... Membership requirements of a government GST group... 81

Part 4‑6—Special rules mainly about tax periods                                            82

Division 151—Annual tax periods                                                                       82

151‑1..................... What this Division is about............................................... 82

Subdivision 151‑A—Electing to have annual tax periods                              82

151‑5..................... Eligibility to make an annual tax period election............... 82

151‑10................... Making an annual tax period election................................ 83

151‑15................... Annual tax period elections by representative members of GST groups  83

151‑20................... When you must make your annual tax period election...... 83

151‑25................... Duration of an annual tax period election.......................... 84

Subdivision 151‑B—Consequences of electing to have annual tax periods 86

151‑40................... Annual tax periods............................................................ 86

151‑45................... When GST returns for annual tax periods must be given. 86

151‑50................... When payments of assessed net amounts for annual tax periods must be made       87

151‑55................... An entity’s concluding annual tax period.......................... 87

151‑60................... The effect of incapacitation or cessation............................ 87

Division 153—Agents etc. and insurance brokers                                      89

153‑1..................... What this Division is about............................................... 89

Subdivision 153‑A—General                                                                                 89

153‑5..................... Attributing the input tax credits for your creditable acquisitions              89

153‑10................... Attributing your adjustments............................................ 90

153‑15................... Tax invoices...................................................................... 90

153‑20................... Adjustment notes.............................................................. 91

153‑25................... Insurance supplied through insurance brokers.................. 91

Subdivision 153‑B—Principals and intermediaries as separate suppliers or acquirers              92

153‑50................... Arrangements under which intermediaries are treated as suppliers or acquirers       92

153‑55................... The effect of these arrangements on supplies.................... 93

153‑60................... The effect of these arrangements on acquisitions.............. 94

153‑65................... Determinations that supplies or acquisitions are taken to be under these arrangements            96

Division 156—Supplies and acquisitions made on a progressive or periodic basis         97

156‑1..................... What this Division is about............................................... 97

156‑5..................... Attributing the GST on progressive or periodic supplies.. 97

156‑10................... Attributing the input tax credits on progressive or periodic acquisitions  97

156‑15................... Progressive or periodic supplies partly connected with the indirect tax zone           98

156‑17................... Application of Division 58 to progressive or periodic supplies and acquisitions     98

156‑20................... Application of Division 129 to progressive or periodic acquisitions        99

156‑22................... Leases etc. treated as being on a progressive or periodic basis 99

156‑23................... Certain supplies or acquisitions under hire purchase agreements treated as not on progressive or periodic basis.......................................................................................... 99

156‑25................... Accounting on a cash basis............................................... 99

Division 157—Accounting basis of charities etc.                                       100

157‑1..................... What this Division is about............................................. 100

157‑5..................... Charities etc. choosing to account on a cash basis.......... 100

157‑10................... Charities etc. ceasing to account on a cash basis............. 100

Division 158—Hire purchase agreements                                                     102

158‑1..................... What this Division is about............................................. 102

158‑5..................... Treat as not accounting on a cash basis........................... 102

Division 159—Changing your accounting basis                                         103

159‑1..................... What this Division is about............................................. 103

159‑5..................... Ceasing to account on a cash basis—amounts not previously attributed  103

159‑10................... Ceasing to account on a cash basis—amounts partly attributed                104

159‑15................... Ceasing to account on a cash basis—bad debts.............. 105

159‑20................... Starting to account on a cash basis.................................. 106

159‑25................... Starting to account on a cash basis—bad debts............... 106

159‑30................... Entities ceasing to exist or coming into existence............ 107

Part 4‑7—Special rules mainly about returns, payments and refunds 108

Division 162—Payment of GST by instalments                                          108

162‑1..................... What this Division is about............................................. 108

Subdivision 162‑A—Electing to pay GST by instalments                            108

162‑5..................... Eligibility to elect to pay GST by instalments................. 108

162‑10................... Your current GST lodgment record................................ 110

162‑15................... Electing to pay GST by instalments................................ 110

162‑20................... Elections by representative members of GST groups..... 111

162‑25................... When you must make your election................................ 111

162‑30................... Duration of your election................................................ 112

Subdivision 162‑B—Consequences of electing to pay GST by instalments 114

162‑50................... GST instalment payers.................................................... 114

162‑55................... Tax periods for GST instalment payers.......................... 114

162‑60................... When GST returns for GST instalment payers must be given 115

162‑65................... The form and contents of GST returns for GST instalment payers          115

162‑70................... Payment of GST instalments.......................................... 116

162‑75................... Giving notices relating to GST instalments..................... 117

162‑80................... Certain entities pay only 2 GST instalments for each year 117

162‑85................... A GST instalment payer’s concluding tax period........... 118

162‑90................... The effect of incapacitation or cessation.......................... 119

162‑95................... The effect of changing the membership of GST groups. 119

162‑100................. General interest charge on late payment.......................... 120

162‑105................. Net amounts for GST instalment payers......................... 120

162‑110................. When payments of assessed net amounts must be made—GST instalment payers  121

Subdivision 162‑C—GST instalments                                                               121

162‑130................. What are your GST instalments...................................... 121

162‑135................. Notified instalment amounts........................................... 122

162‑140................. Varied instalment amounts.............................................. 122

162‑145................. Your annual GST liability............................................... 123

Subdivision 162‑D—Penalty payable in certain cases if varied instalment amounts are too low             124

162‑170................. What this Subdivision is about....................................... 124

162‑175................. GST payments are less than 85% of annual GST liability 125

162‑180................. Estimated annual GST amount is less than 85% of annual GST liability 127

162‑185................. Shortfall in GST instalments worked out on the basis of estimated annual GST amount         129

162‑190................. Periods for which penalty is payable.............................. 130

162‑195................. Reduction in penalties if notified instalment amount is less than 25% of annual GST liability 130

162‑200................. Reduction in penalties if GST instalment shortfall is made up in a later instalment  131

162‑205................. This Subdivision does not create a liability for general interest charge     132

Division 165—Anti‑avoidance                                                                             133

165‑1..................... What this Division is about............................................. 133

Subdivision 165‑A—Application of this Division                                           134

165‑5..................... When does this Division operate?................................... 134

165‑10................... When does an entity get a GST benefit from a scheme?.. 135

165‑15................... Matters to be considered in determining purpose or effect 137

Subdivision 165‑B—Commissioner may negate effects of schemes for GST benefits 138

165‑40................... Commissioner may make declaration for purpose of negating avoider’s GST benefits           138

165‑45................... Commissioner may reduce an entity’s net amount or GST to compensate               139

165‑50................... Declaration has effect according to its terms................... 140

165‑55................... Commissioner may disregard scheme in making declarations  140

165‑60................... One declaration may cover several tax periods and importations             141

165‑65................... Commissioner must give copy of declaration to entity affected                141

Division 168—Tourist refund scheme                                                              142

168‑1..................... What this Division is about............................................. 142

168‑5..................... Tourist refund scheme.................................................... 142

168‑10................... Supplies later found to be GST‑free supplies................. 143

Division 171—Customs security etc. given on taxable importations 145

171‑1..................... What this Division is about............................................. 145

171‑5..................... Security or undertaking given under section 162 or 162A of the Customs Act       145

Chapter 5—Miscellaneous                                                                                147

Part 5‑1—Miscellaneous                                                                                                 147

Division 176—Endorsement of charities etc.                                               147

176‑1..................... Endorsement by Commissioner as charity...................... 147

Division 177—Miscellaneous                                                                                148

177‑1..................... Commonwealth etc. not liable to pay GST...................... 148

177‑3..................... Acquisitions from State or Territory bodies where GST liability is notional            149

177‑5..................... Cancellation of exemptions from GST............................ 149

177‑10................... Ministerial determinations............................................... 149

177‑11................... Delegation by Aged Care Secretary................................ 150

177‑12................... GST implications of references to price, value etc. in other Acts             151

177‑15................... Regulations..................................................................... 152

177‑20................... Review of provisions relating to offshore supplies of low value goods   152

Chapter 6—Interpreting this Act                                                               154

Part 6‑1—Rules for interpreting this Act                                                            154

Division 182—Rules for interpreting this Act                                             154

182‑1..................... What forms part of this Act............................................ 154

182‑5..................... What does not form part of this Act................................ 154

182‑10................... Explanatory sections, and their role in interpreting this Act 154

182‑15................... Schedules 1, 2 and 3....................................................... 155

Part 6‑2—Meaning of some important concepts                                             156

Division 184—Meaning of entity                                                                        156

184‑1..................... Entities............................................................................ 156

184‑5..................... Supplies etc. by partnerships and other unincorporated bodies                157

Division 188—Meaning of GST turnover                                                      159

188‑1..................... What this Division is about............................................. 159

188‑5..................... Explanation of the turnover thresholds........................... 159

188‑10................... Whether your GST turnover meets, or does not exceed, a turnover threshold         160

188‑15................... Current GST turnover..................................................... 161

188‑20................... Projected GST turnover.................................................. 162

188‑22................... Settlements of insurance claims to be disregarded.......... 163

188‑23................... Supplies “reverse charged” under Division 83 or 86 not to be included in a recipient’s GST turnover   164

188‑24................... Supplies to which Subdivision 153‑B applies................ 164

188‑25................... Transfer of capital assets, and termination etc. of enterprise, to be disregarded        164

188‑30................... The value of non‑taxable supplies................................... 165

188‑32................... The value of gambling supplies...................................... 165

188‑35................... The value of loans........................................................... 165

188‑40................... Supplies of employee services by overseas entities to be disregarded for the registration turnover threshold........................................................................................ 165

Division 189—Exceeding the financial acquisitions threshold            167

189‑1..................... What this Division is about............................................. 167

189‑5..................... Exceeding the financial acquisitions threshold—current acquisitions       167

189‑10................... Exceeding the financial acquisitions threshold—future acquisitions        168

189‑15................... Meaning of financial acquisition.................................... 169

Division 190—90% owned groups of companies                                       170

190‑1..................... 90% owned groups......................................................... 170

190‑5..................... When a company has at least a 90% stake in another company                170

Part 6‑3—Dictionary                                                                                                        171

Division 195—Dictionary                                                                                       171

195‑1..................... Dictionary....................................................................... 171

Schedule 1—Food that is not GST‑free                                              218

1............................ Food that is not GST‑free............................................... 218

2............................ Prepared food, bakery products and biscuit goods......... 220

3............................ Prepared meals................................................................ 220

4............................ Candied peel................................................................... 220

5............................ Goods that are not biscuit goods..................................... 220

Schedule 2—Beverages that are GST‑free                                       221

1............................ Beverages that are GST‑free........................................... 221

2............................ Tea, coffee etc................................................................. 222

3............................ Fruit and vegetable juices................................................ 222

Schedule 3—Medical aids and appliances                                       223

Endnotes                                                                                                                                  231

Endnote 1—About the endnotes                                                                          231

Endnote 2—Abbreviation key                                                                              233

Endnote 3—Legislation history                                                                           234

Endnote 4—Amendment history                                                                         249


Chapter 4The special rules

Part 4‑3Special rules mainly about importations

Note:       The special rules in this Part mainly modify the operation of Part 2‑3, but they may affect other Parts of Chapter 2 in minor ways.

Division 114Importations without entry for home consumption

114‑1  What this Division is about

This Division treats as taxable importations several kinds of importations of goods covered by the Customs Act 1901, even though the goods are not entered for home consumption. An entity that enters for home consumption warehoused goods imported by someone else is entitled to any input tax credit for the importation.

114‑5  Importations without entry for home consumption

             (1)  You make a taxable importation if:

                     (a)  the circumstances referred to in the third column of the following table occur; and

                     (b)  you are referred to in the fourth column of the table as the importer in relation to those circumstances.

However, there is not a taxable importation to the extent that the importation to which the circumstances relate is a *non‑taxable importation.

 

Importations without entry for home consumption

Item

Topic

Circumstance

Importer

1

Personal or household effects of passengers or crew

Goods of a kind referred to in paragraph 68(1)(d) of the Customs Act 1901 are delivered into home consumption in accordance with an authorisation under section 71 of that Act.

The person to whom the authorisation was granted.

2

Low value consignments by post

Goods of a kind referred to in paragraph 68(1)(e) of the Customs Act 1901 are delivered into home consumption in accordance with an authorisation under section 71 of that Act.

The person to whom the authorisation was granted.

3

Other low value consignments

Goods of a kind referred to in paragraph 68(1)(f) of the Customs Act 1901 are delivered into home consumption in accordance with an authorisation under section 71 of that Act.

The person to whom the authorisation was granted.

4

Other goods exempt from entry

Goods of a kind referred to in paragraph 68(1)(i) of the Customs Act 1901 are delivered into home consumption in accordance with an authorisation under section 71 of that Act.

The person to whom the authorisation was granted.

5

Like customable goods

Goods are delivered into home consumption in accordance with a permission granted under section 69 of the Customs Act 1901.

The person to whom the permission was granted.

6

Special clearance goods

Goods are delivered into home consumption in accordance with a permission granted under section 70 of the Customs Act 1901.

The person to whom the permission was granted.

10

Return of seized goods

Goods that have been seized under a warrant issued under section 203 of the Customs Act 1901, or under section 203B or 203C of that Act, are delivered to a person on the basis that they are not forfeited goods.

The person to whom the goods are delivered.

13

Inwards duty free shops

Goods that are *airport shop goods purchased from an *inwards duty free shop by a *relevant traveller are removed from a *customs clearance area.

The relevant traveller.

15

Installations and goods on installations

Goods are deemed by section 49B of the Customs Act 1901 to be imported into the indirect tax zone.

The person who is the owner (within the meaning of the Customs Act 1901) of the goods when they are deemed to be so imported.

16

Goods not entered for home consumption when required

Goods not covered by any other item of this table are imported into the indirect tax zone, and:

(a) if they are required to be entered under section 68 of the Customs Act 1901—they are not entered in accordance with that requirement; or

(b) in any other case—a requirement under that Act relating to their importation has not been complied with

The person who fails to comply with that requirement.

             (2)  This section has effect despite section 13‑5.

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

                   Once goods have been:

                     (a)  entered for home consumption within the meaning of the Customs Act 1901; or

                     (b)  taken to be imported because of the application of an item in the table in section 114‑5;

they cannot subsequently be taken to be imported because of the application of an item in the table, unless they have been exported from the indirect tax zone since they were so entered or taken to be imported.

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

             (1)  If:

                     (a)  a circumstance relating to goods is an importation of the goods into the indirect tax zone because of an item of the table in section 114‑5; and

                     (b)  security has been given under the Customs Act 1901 for payment of *customs duty in respect of the goods; and

                     (c)  the security is forfeited;

any *assessed GST payable on the importation is to be paid when the security is forfeited.

             (2)  This section has effect despite section 33‑15 (which is about payments of amounts of assessed GST on importations).

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

             (1)  If:

                     (a)  the delivery of goods into home consumption in accordance with an authorisation under section 71 of the Customs Act 1901 is an importation into the indirect tax zone because of item 1, 2, 3 or 4 of the table in section 114‑5; and

                     (b)  information was provided under section 71 of that Act in connection with the granting of the authorisation;

any *assessed GST payable on the importation is to be paid when the information was provided/on or before the granting of the authorisation.

             (2)  This section has effect despite sections 33‑15 (which is about payments of amounts of assessed GST on importations) and 114‑15.

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

             (1)  If you enter for home consumption (within the meaning of the Customs Act 1901) goods that are warehoused goods (within the meaning of that Act) and that were imported by another person:

                     (a)  you are treated, for the purposes of Division 15, as having imported the goods; and

                     (b)  the extent (if any) to which you entered the goods for home consumption for a *creditable purpose is treated as the extent (if any) to which you imported the goods for a creditable purpose.

             (2)  This section has effect despite Division 15 (which is about creditable importations).

Division 117Valuation of re‑imported goods

117‑1  What this Division is about

Taxable importations of goods that were exported, and then re‑imported, are in some cases given a lower value than would otherwise apply. The GST then applies only to the lower value, and not to the entire value, of the goods.

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

             (1)  The value of a *taxable importation of goods that were exported from the indirect tax zone for repair or renovation, or that are part of a *batch repair process, is the sum of:

                     (a)  the cost, as determined by the *Comptroller‑General of Customs, of materials, labour and other charges involved in the repair or renovation; and

                     (b)  the amount paid or payable:

                              (i)  for the *international transport of the goods to their *place of consignment in the indirect tax zone; 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.

          (1A)  If an amount to be taken into account under paragraph (1)(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.

             (2)  Goods are part of a batch repair process if:

                     (a)  they are part of a process to replace goods that were exported from the indirect tax zone for repair or renovation; and

                     (b)  they are not new or upgraded versions of the exported goods; and

                     (c)  they are not replacing goods that have reached the end of their effective operational life.

             (3)  This section has effect despite subsection 13‑20(2) (which is about the value of taxable importations).

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

             (1)  If there is a *taxable importation of a live animal that was exported, and the difference between:

                     (a)  what would have been the value of the importation if this section did not apply; and

                     (b)  what would have been the value of a taxable importation of the animal if it had been imported immediately before the time of the exportation;

is greater than zero, the value of the *taxable importation is an amount equal to that difference.

             (2)  In any other case, the value of a *taxable importation of a live animal that was exported is nil.

             (3)  However, this section does not apply if the ownership of the animal when it is imported is different from its ownership when it was last exported.

             (4)  This section has effect despite subsection 13‑20(2) (which is about the value of taxable importations).

117‑15  Refunds of assessed GST on certain reimportations of live animals

             (1)  If:

                     (a)  you were liable to pay the *assessed GST on a *taxable importation to which section 117‑10 applied; and

                     (b)  the importation was not a *creditable importation; and

                     (c)  the circumstances specified in the regulations occur;

the Commissioner must, on behalf of the Commonwealth, pay to you an amount equal to the amount of the assessed GST payable on the taxable importation.

             (2)  The amount is payable within the period and in the manner specified in the regulations.

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

Note:       The special rules in this Part mainly modify the operation of Part 2‑4, but they may affect other Parts of Chapter 2 in minor ways.

Division 123Simplified accounting methods for retailers and small enterprise entities

123‑1  What this Division is about

The Commissioner can create simplified accounting methods that some retailers and small enterprise entities can choose to apply with a view to reducing their costs of complying with the requirements of the GST.

123‑5  Commissioner may determine simplified accounting methods

             (1)  The Commissioner may determine in writing an arrangement (to be known as a simplified accounting method) that:

                     (a)  specifies the kinds of *retailers to whom it is available and provides a method for working out *net amounts of retailers to whom the method applies; or

                     (b)  specifies the kinds of *small enterprise entities to whom it is available and provides a method for working out *net amounts of small enterprise entities to whom the method applies.

             (2)  The kinds of *retailer specified under paragraph (1)(a) must all be kinds of retailers that:

                     (a)  sell *food; or

                     (b)  make supplies that are *GST‑free under Subdivision 38‑G (Non‑commercial activities of charities etc.);

in the course or furtherance of *carrying on their *enterprise.

             (3)  The kinds of *small enterprise entities specified under paragraph (1)(b) must all be kinds of small enterprise entities that, in the course or furtherance of *carrying on their *enterprises:

                     (a)  make both:

                              (i)  *taxable supplies; and

                             (ii)  supplies that are *GST‑free; or

                     (b)  make both:

                              (i)  *creditable acquisitions; and

                             (ii)  acquisitions that are not creditable acquisitions because the supplies, made to the small enterprise entities, to which the acquisitions relate are GST‑free.

123‑7  Meaning of small enterprise entity

             (1)  An entity is a small enterprise entity at a particular time if:

                     (a)  the entity is a *small business entity (other than because of subsection 328‑110(4) of the *ITAA 1997) for the *income year in which the time occurs; or

                    (aa)  the entity is an entity covered by subsection (1A) for the income year in which the time occurs; or

                     (b)  at that time, the entity does not carry on a business and its *GST turnover does not exceed the *small enterprise turnover threshold.

          (1A)  An entity is covered by this subsection for an *income year if:

                     (a)  the entity is not a *small business entity (other than because of subsection 328‑110(4) of the *ITAA 1997) for the income year; and

                     (b)  the entity would be such a small business entity for the income year if:

                              (i)  each reference in Subdivision 328‑C (about what is a small business entity) of that Act to $10 million were instead a reference to $50 million; and

                             (ii)  the reference in paragraph 328‑110(5)(b) of that Act to a small business entity were instead a reference to an entity covered by this subsection.

             (2)  The small enterprise turnover threshold is $2 million.

123‑10  Choosing to apply a simplified accounting method

             (1)  You may, by notifying the Commissioner in the *approved form:

                     (a)  choose to apply a *simplified accounting method if you are a *retailer of the kind to whom the method is available; or

                    (aa)  choose to apply a *simplified accounting method if you are a *small enterprise entity of the kind to whom the method is available; or

                     (b)  revoke your choice under paragraph (a) or (aa).

             (2)  However, you:

                     (a)  cannot revoke the choice within 12 months after the day on which you made the choice; and

                     (b)  cannot make a further choice as a *retailer within 12 months after the day on which you revoked a previous choice as a retailer; and

                   (ba)  cannot make a further choice as a *small enterprise entity within 12 months after the day on which you revoked a previous choice as a small enterprise entity; and

                     (c)  cannot choose to apply a *simplified accounting method in addition to another simplified accounting method.

             (3)  Your choice to apply a *simplified accounting method has effect from the start of the tax period specified in your notice.

             (4)  Your choice to apply a *simplified accounting method ceases to have effect:

                     (a)  if you made your choice as a *retailer and cease to be a retailer of the kind to whom the method is available—from the start of the tax period occurring after the day on which you cease to be such a retailer; or

                    (aa)  if you made your choice as a *small enterprise entity and cease to be a small enterprise entity of the kind to whom the method is available—from the start of the tax period occurring after the day on which you cease to be such a small enterprise entity; or

                     (b)  if you revoke your choice to apply the method—from the start of the tax period specified in your notice of revocation.

123‑15  Net amounts

             (1)  If you are a *retailer or a *small enterprise entity who has chosen to apply a *simplified accounting method, the net amount for a tax period during which the choice has effect is worked out using the method provided for by the simplified accounting method.

          (1A)  However, the *net amount worked out under subsection (1) for the tax period:

                     (a)  may be increased or decreased under Subdivision 21‑A of the *Wine Tax Act; and

                     (b)  may be increased or decreased under Subdivision 13‑A of the A New Tax System (Luxury Car Tax) Act 1999.

Note 1:       Under Subdivision 21‑A of the Wine Tax Act, amounts of wine tax increase the net amount, and amounts of wine tax credits reduce the net amount.

Note 2:       Under Subdivision 13‑A of the A New Tax System (Luxury Car Tax) Act 1999, amounts of luxury car tax increase the net amount, and luxury car tax adjustments alter the net amount.

             (2)  This section has effect despite section 17‑5 (which is about net amounts).

Division 126Gambling

126‑1  What this Division is about

Gambling is dealt with under the GST by using a global accounting system that provides for an alternative way of working out your net amounts by incorporating your net profits from taxable supplies involving gambling.

126‑5  Global accounting system for gambling supplies

             (1)  If you are liable for the GST on a *gambling supply, your net amount for the tax period to which the GST on the supply is attributable is as follows:

where:

global GST amount is your *global GST amount for the tax period.

input tax credits is the sum of all of the input tax credits to which you are entitled on the *creditable acquisitions and *creditable importations that are attributable to the tax period.

Note:          Any supplies under the global accounting system will not have attracted input tax credits.

other 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, other than *gambling supplies.

For the basic rules on what is attributable to a particular period, see Division 29.

             (2)  However, the *net amount worked out under subsection (1) for the tax period:

                     (a)  may be increased or decreased if you have any *adjustments for the tax period; and

                     (b)  may be increased or decreased under Subdivision 21‑A of the *Wine Tax Act; and

                     (c)  may be increased or decreased under Subdivision 13‑A of the A New Tax System (Luxury Car Tax) Act 1999.

Note 1:       See Part 2‑4 for the basic rules on adjustments.

Note 2:       Under Subdivision 21‑A of the Wine Tax Act, amounts of wine tax increase the net amount, and amounts of wine tax credits reduce the net amount.

Note 3:       Under Subdivision 13‑A of the A New Tax System (Luxury Car Tax) Act 1999, amounts of luxury car tax increase the net amount, and luxury car tax adjustments alter the net amount.

             (3)  This section has effect despite section 17‑5 (which is about net amounts).

Note:          If you are a *GST instalment payer your net amount is reduced by GST instalments you have paid: see section 162‑105.

126‑10  Global GST amounts

             (1)  Your global GST amount for a tax period is as follows:

where:

total amounts wagered is the sum of the *consideration for all of your *gambling supplies that are attributable to that tax period.

total monetary prizes is the sum of:

                     (a)  the *monetary prizes you are liable to pay, during the tax period, on the outcome of gambling events (whether or not any of those gambling events, or the *gambling supplies to which the monetary prizes relate, take place during the tax period); and

                     (b)  any amounts of *money or *digital currency you are liable to pay, during the tax period, under agreements between you and *recipients of your gambling supplies, to repay to them a proportion of their losses relating to those supplies (whether or not the supplies take place during the tax period).

For the basic rules on what is attributable to a particular period, see Division 29.

             (2)  However, your global GST amount is zero for any tax period in which total monetary prizes exceeds total amounts wagered.

             (3)  In working out the total monetary prizes for a tax period, disregard any *monetary prizes you are liable to pay, during the tax period, that relate to supplies that are *GST‑free.

             (4)  Your global GST amount for a tax period may be affected by sections 126‑15 and 126‑20.

126‑15  Losses carried forward

                   If, for any tax period, your total monetary prizes referred to in subsection 126‑10(1) exceed your total amounts wagered referred to in that subsection, the amount of that excess is to be added to your total monetary prizes, referred to in that subsection, for the next tax period.

126‑20  Bad debts

             (1)  You cannot have an *adjustment under Division 21 in relation to a *gambling supply.

             (2)  If, in a tax period, you write off as bad the whole or part of the *consideration for a *gambling supply that is due as a debt, but has not been received, the amount written off is to be added to your total monetary prizes, referred to in subsection 126‑10(1), for that tax period.

             (3)  However, if, in a tax period, you recover the whole or part of the amount written off, the amount recovered is to be added to your total amounts wagered, referred to in subsection 126‑10(1), for that tax period.

             (4)  This section has effect despite sections 21‑5 and 21‑10 (which are about adjustments for writing off and recovering suppliers’ bad debts).

126‑25  Application of Subdivision 9‑C

                   Subdivision 9‑C does not apply to a *gambling supply.

126‑27  When gambling supplies are connected with the indirect tax zone

             (1)  A *gambling supply is connected with the indirect tax zone if the *recipient of the supply is an Australian resident (unless he or she is an Australian resident solely because the definition of Australia in the *ITAA 1997 includes the external Territories).

             (2)  This section has effect in addition to section 9‑25 (which is about when supplies are connected with the indirect tax zone).

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

             (1)  An acquisition of a thing is not a *creditable acquisition if the supply of the thing acquired was a *gambling supply.

             (2)  This section has effect despite section 11‑5 (which is about what is a creditable acquisition).

126‑32  Repayments of gambling losses are not consideration

             (1)  A payment of *money or *digital currency is not the provision of *consideration to the extent that the payment:

                     (a)  is made by a supplier of *gambling supplies to a *recipient of gambling supplies that the supplier makes; and

                     (b)  is made, under an agreement between them, to repay to the recipient a proportion of his or her losses relating to those supplies.

             (2)  This section has effect despite section 9‑15 (which is about what is consideration).

126‑33  Tax invoices not required for gambling supplies

             (1)  You are not required to issue a *tax invoice for a *taxable supply that you make that is solely a *gambling supply.

             (2)  This section has effect despite section 29‑70 (which is about the requirement to issue tax invoices).

126‑35  Meaning of gambling supply and gambling event

             (1)  A gambling supply is a *taxable supply involving:

                     (a)  the supply of a ticket (however described) in a lottery, raffle or similar undertaking; or

                     (b)  the acceptance of a bet (however described) relating to the outcome of a *gambling event.

             (2)  A gambling event is:

                     (a)  the conducting of a lottery or raffle, or similar undertaking; or

                     (b)  a race, game, or sporting event, or any other event, for which there is an outcome.

Division 129Changes in the extent of creditable purpose

  

Table of Subdivisions

129‑A   General

129‑B    Adjustment periods

129‑C    When adjustments for acquisitions and importations arise

129‑D   Amounts of adjustments for acquisitions and importations

129‑E    Attributing adjustments under this Division

129‑1  What this Division is about

The extent to which an acquisition or importation is for a creditable purpose affects the amount of the resulting input tax credit. When the extent of creditable purpose is changed by later events, adjustments (for the purpose of working out net amounts under Part 2‑4) may need to be made.

Subdivision 129‑AGeneral

129‑5  Adjustments arising under this Division

             (1)  An *adjustment can arise under this Division for:

                     (a)  an acquisition, even if it is not a *creditable acquisition; or

                     (b)  an importation, even if it is not a *creditable importation;

in respect of any *adjustment period for the acquisition or importation.

             (2)  However, in determining:

                     (a)  whether an adjustment under this Division arises; or

                     (b)  the amount of such an *adjustment;

disregard any change in the extent to which the thing acquired or imported is *applied in making *financial supplies, unless you *exceed the financial acquisitions threshold.

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

             (1)  Despite section 129‑5, an adjustment cannot arise under this Division for an acquisition or importation that *relates to business finance, unless the acquisition or importation had a *GST exclusive value of more than $10,000.

             (2)  Despite section 129‑5, an adjustment cannot arise under this Division for an acquisition or importation that does not *relate to business finance, unless the acquisition or importation had a *GST exclusive value of more than $1,000.

             (3)  An acquisition or importation relates to business finance if, at the time of the acquisition or importation, it:

                     (a)  related solely or partly to making *financial supplies; and

                     (b)  was not solely or partly of a private or domestic nature.

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

                   Despite section 129‑5, you cannot have an adjustment under this Division for an acquisition if you have already had an *adjustment under Division 130 (goods applied solely to private or domestic use) for the acquisition.

Subdivision 129‑BAdjustment periods

129‑20  Adjustment periods

             (1)  An adjustment period for an acquisition or importation is a tax period applying to you that:

                     (a)  starts at least 12 months after the end of the tax period to which the acquisition or importation is attributable (or would be attributable if it were a *creditable acquisition or *creditable importation); and

                     (b)  ends:

                              (i)  on 30 June in any year; or

                             (ii)  if none of the tax periods applying to you in a particular year ends on 30 June—closer to 30 June than any of the other tax periods applying to you in that year.

In addition, a tax period provided for under section 27‑39 or 27‑40 or subsection 151‑55(1) or 162‑85(1) is an adjustment period for the acquisition or importation.

Note:          Section 27‑39 deals with an incapacitated entity’s tax periods. Section 27‑40 and subsections 151‑55(1) and 162‑85(1) deal with an entity’s concluding tax period.

             (2)  Despite subsection (1), for an acquisition or importation that *relates to business finance:

                     (a)  if the *GST exclusive value of the acquisition or importation is $50,000 or less—only the first such tax period is an adjustment period; or

                     (b)  if the GST exclusive value of the acquisition or importation is more than $50,000 but less than $500,000—only the first 5 such tax periods are adjustment periods; or

                     (c)  if the GST exclusive value of the acquisition or importation is $500,000 or more—only the first 10 such tax periods are adjustment periods.

             (3)  Despite subsection (1), for an acquisition or importation that does not *relate to business finance:

                     (a)  if the *GST exclusive value of the acquisition or importation is $5,000 or less—only the first 2 such tax periods are adjustment periods; or

                     (b)  if the GST exclusive value of the acquisition or importation is more than $5,000 but less than $500,000—only the first 5 such tax periods are adjustment periods; or

                     (c)  if the GST exclusive value of the acquisition or importation is $500,000 or more—only the first 10 such tax periods are adjustment periods.

However, the Commissioner may, having regard to record keeping requirements for the purposes of income tax, determine in writing that a fewer number of tax periods are adjustment periods for a particular class of acquisitions or importations that do not *relate to business finance.

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

             (1)  Despite section 129‑20, if:

                     (a)  you dispose of a thing acquired or imported (other than in circumstances giving rise to a *decreasing adjustment under Division 132); or

                     (b)  a thing acquired or imported is lost, stolen or destroyed; or

                     (c)  a thing is acquired only for a particular period and that period expires;

the next tax period applying to you that ends:

                     (d)  on 30 June in any year; or

                     (e)  if none of the tax periods applying to you in a particular year ends on 30 June—closer to 30 June than any of the other tax periods applying to you in that year;

is the last *adjustment period for the acquisition or importation in question.

             (2)  Despite section 129‑20, if:

                     (a)  you dispose of a thing acquired or imported; and

                     (b)  the disposal takes place in circumstances giving rise to a *decreasing adjustment under Division 132;

then:

                     (c)  the last *adjustment period to end before the disposal is the last adjustment period for the acquisition or importation in question; and

                     (d)  if no such adjustment period ended before the disposal, there is no adjustment period for the acquisition or importation.

             (3)  This section does not apply to a disposal if this Division continues to apply to the acquisition or importation of the thing because of subsection 138‑17(2).

Subdivision 129‑CWhen adjustments for acquisitions and importations arise

129‑40  Working out whether you have an adjustment

             (1)  This is how to work out whether you have an *increasing adjustment or a *decreasing adjustment under this Division, for an *adjustment period, for an acquisition or importation:

Method statement

Step 1.   Work out the extent (if any) to which you have *applied the thing acquired or imported for a *creditable purpose during the period of time:

               (a)     starting when you acquired or imported the thing; and

              (b)     ending at the end of the *adjustment period.

              This is the actual application of the thing.

Step 2.   Work out:

               (a)     if you have not previously had an *adjustment under this Division for the acquisition or importation—the extent (if any) to which you acquired or imported the thing for a *creditable purpose; or

              (b)     if you have previously had an *adjustment under this Division for the acquisition or importation—the *actual application of the thing in respect of the last adjustment.

              This is the intended or former application of the thing.

Step 3.   If the *actual application of the thing is less than its *intended or former application, you have an increasing adjustment, for the *adjustment period, for the acquisition or importation.

Step 4.   If the *actual application of the thing is greater than its *intended or former application, you have a decreasing adjustment, for the *adjustment period, for the acquisition or importation.

Step 5.   If the *actual application of the thing is the same as its *intended or former application, you have neither an increasing adjustment nor a decreasing adjustment, for the *adjustment period, for the acquisition or importation.

             (2)  *Actual applications and *intended or former applications are to be expressed as percentages.

             (3)  If the thing is acquired through a *reduced credit acquisition and, at the time of the acquisition, it was wholly for a *creditable purpose because of Division 70, the extent to which it was acquired for a creditable purpose is the reduced input tax credit percentage prescribed for the purposes of subsection 70‑5(2) for an acquisition of that kind.

129‑45  Gifts to gift‑deductible entities

             (1)  If you are or were entitled to an input tax credit for the *creditable acquisition of a thing, an *adjustment does not arise under this Subdivision merely because you supply the thing as a gift to an *endorsed charity or *gift‑deductible entity.

             (3)  Subsection (1) does not apply in relation to a thing that you supply to a *gift‑deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30‑120 of the ITAA 1997, unless:

                     (a)  the entity is:

                              (i)  an *endorsed charity; or

                             (ii)  a fund, authority or institution of a kind referred to in paragraph 30‑125(1)(b) of the ITAA 1997; or

                     (b)  each purpose to which the supply relates is a *gift‑deductible purpose of the entity.

Note:          This subsection excludes from this section supplies to certain (but not all) gift‑deductible entities that are only endorsed for the operation of a fund, authority or institution. However, supplies can be covered by this section if they relate to the principal purpose of the fund, authority or institution.

129‑50  Creditable purpose

             (1)  You *apply a thing for a creditable purpose to the extent that you apply it in *carrying on your *enterprise.

             (2)  However, you do not *apply a thing for a creditable purpose to the extent that:

                     (a)  the application relates to making supplies that are *input taxed; or

                     (b)  the application is of a private or domestic nature.

             (3)  To the extent that an *application relates to making *financial supplies through an *enterprise, or a part of an enterprise, that you *carry on outside the indirect tax zone, the application is not, for the purposes of paragraph (2)(a), treated as one that relates to making supplies that would be *input taxed.

129‑55  Meaning of apply

                   Apply, in relation to a thing acquired or imported, includes:

                     (a)  supply the thing; and

                     (b)  consume, dispose of or destroy the thing; and

                     (c)  allow another entity to consume, dispose of or destroy the thing.

Subdivision 129‑DAmounts of adjustments for acquisitions and importations

129‑70  The amount of an increasing adjustment

                   The amount of an *increasing adjustment that you have under Step 3 of the Method statement in section 129‑40 for the thing acquired or imported is worked out as follows:

where:

full input tax credit is the amount of the input tax credit to which you would have been entitled for acquiring or importing the thing for the purpose of your *enterprise if:

                     (a)  the acquisition or importation had been solely for a *creditable purpose; and

                     (b)  in the case where the supply to you was a *taxable supply because of section 72‑5 or 84‑5—the supply had been or is a *taxable supply under section 9‑5.

129‑75  The amount of a decreasing adjustment

                   The amount of a *decreasing adjustment that you have under Step 4 of the Method statement in section 129‑40 for the thing acquired or imported is worked out as follows:

where:

full input tax credit is the amount of the input tax credit to which you would have been entitled for acquiring or importing the thing for the purpose of your *enterprise if:

                     (a)  the acquisition or importation had been solely for a *creditable purpose; and

                     (b)  in the case where the supply to you was a *taxable supply because of section 72‑5 or 84‑5—the supply had been or is a *taxable supply under section 9‑5.

129‑80  Effect of adjustment under certain Divisions

                   For the purpose of working out under this Subdivision the amount of an *adjustment for an acquisition, any adjustments under Division 19, 21, 133 or 134 that you have had for the acquisition are to be taken into account in working out the full input tax credit for the purpose of section 129‑70 or 129‑75.

Subdivision 129‑EAttributing adjustments under this Division

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

             (1)  An *adjustment that you have arising in respect of an *adjustment period under this Division is attributable to the tax period that is that adjustment period.

             (2)  This section has effect despite section 29‑20 (which is about attributing adjustments).

Division 130Goods applied solely to private or domestic use

130‑1  What this Division is about

You may have an increasing adjustment if you apply solely to private or domestic use goods for which you had a full input tax credit.

130‑5  Goods applied solely to private or domestic use

             (1)  You have an increasing adjustment if:

                     (a)  you made a *creditable acquisition or *creditable importation of goods; and

                     (b)  the acquisition or importation was solely for a *creditable purpose; and

                     (c)  you *apply the goods solely to private or domestic use.

             (2)  The amount of the increasing adjustment is an amount equal to the amount of the input tax credit to which you were entitled for the acquisition or importation, taking account of any *adjustments for the acquisition or importation.

             (3)  However, this section does not apply if you have previously had an adjustment under Division 129 for the acquisition or importation.

Division 131Annual apportionment of creditable purpose

Table of Subdivisions

131‑A   Electing to have annual apportionment

131‑B    Consequences of electing to have annual apportionment

131‑1  What this Division is about

In some cases, you may be able to claim a full input tax credit for acquisitions that are only partly for a creditable purpose. You will then have an increasing adjustment for a later tax period (that better matches your obligation to lodge an income tax return).

Subdivision 131‑AElecting to have annual apportionment

131‑5  Eligibility to make an annual apportionment election

             (1)  You are eligible to make an *annual apportionment election if:

                     (a)  either:

                              (i)  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 election; or

                             (ii)  you do not carry on a *business and your *GST turnover does not exceed the *annual apportionment turnover threshold; and

                     (b)  you have not made any election under section 162‑15 to pay GST by instalments (other than such an election that is no longer in effect); and

                     (c)  you have not made any *annual tax period election (other than such an election that is no longer in effect).

             (2)  The annual apportionment turnover threshold is:

                     (a)  $2 million; or

                     (b)  such higher amount as the regulations specify.

131‑10  Making an annual apportionment election

             (1)  You may make an *annual apportionment election if you are eligible under section 131‑5.

             (2)  Your election takes effect from:

                     (a)  the start of the earliest tax period for which, on the day on which you make your election, your *GST return is not yet due (taking into account any further period the Commissioner allows under paragraph 31‑8(1)(b) or 31‑10(1)(b)); or

                     (b)  the start of such other tax period as the Commissioner allows, in accordance with a request you make in the *approved form.

Note:          Refusing a request to allow your election to take effect from the start of another tax period is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

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

             (1)  A *representative member of a *GST group cannot make an *annual apportionment election unless each *member of the GST group is eligible under section 131‑5.

             (2)  If the *representative member makes such an election, or revokes such an election, each *member of the *GST group is taken to have made, or revoked, the election.

131‑20  Duration of an annual apportionment election

General rule

             (1)  Your election ceases to have effect if:

                     (a)  you revoke it; or

                     (b)  the Commissioner disallows it under subsection (3); or

                     (c)  in a case to which subparagraph 131‑5(1)(a)(i) applied—you are not a *small business entity of the kind referred to in that subparagraph for an *income year; or

                     (d)  in a case to which subparagraph 131‑5(1)(a)(ii) applied—on 31 July in a *financial year, you do not satisfy the requirements of that subparagraph.

Revocation

             (2)  A revocation of your election is taken to have had, or has, effect at the start of the earliest tax period for which, on the day of the revocation, your *GST return is not yet due.

Disallowance

             (3)  The Commissioner may disallow your election if, and only if, the Commissioner is satisfied that you have failed to comply with one or more of your obligations under a *taxation law.

Note:          Disallowing your election is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (4)  A disallowance of your election is taken to have had effect from the start of the tax period in which the Commissioner notifies you of the disallowance.

Not being a small business entity for an income year

             (5)  If paragraph (1)(c) applies, your election is taken to have ceased to have effect from the start of the tax period in which the first day of the *income year referred to in that paragraph falls.

Failing to satisfy the requirements of subparagraph 131‑5(1)(a)(ii)

             (6)  If paragraph (1)(d) applies, your election is taken to have ceased to have effect from the start of the tax period in which 31 July in the *financial year referred to in that paragraph falls.

Subdivision 131‑BConsequences of electing to have annual apportionment

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

             (1)  The amount of the input tax credit on an acquisition that you make that is *partly creditable is an amount equal to the GST payable on the supply of the thing acquired if:

                     (a)  an *annual apportionment election that you have made has effect at the end of the tax period to which the input tax credit is attributable; and

                     (b)  the acquisition is not an acquisition of a kind specified in the regulations.

             (2)  However, if one or both of the following apply to the acquisition:

                     (a)  the acquisition relates to making supplies that would be *input taxed;

                     (b)  you provide, or are liable to provide, only part of the *consideration for the acquisition;

the amount of the input tax credit on the acquisition 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 non‑input‑taxed purpose is the extent to which the acquisition does not relate to making supplies that would be *input taxed, 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.

             (3)  In determining for the purposes of subsection (2) whether, or the extent to which, an acquisition relates to making supplies that would be *input taxed, subsections 11‑15(3) to (5) apply in the same way that they apply for the purposes of paragraph 11‑15(2)(a).

             (4)  Determinations made by the Commissioner under subsection 11‑30(5) apply (so far as they are capable of applying) to working out the extent to which a *partly creditable acquisition does not relate to making supplies that would be *input taxed.

             (5)  This section does not apply to an input tax credit on an acquisition if the acquisition is, to any extent, a *reduced credit acquisition.

             (6)  This section has effect despite sections 11‑25 and 11‑30 (which are about amounts of input tax credits).

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

             (1)  The amount of the input tax credit on an importation that you make that is *partly creditable is an amount equal to the GST payable on the importation if:

                     (a)  an *annual apportionment election that you have made has effect at the end of the tax period to which the input tax credit is attributable; and

                     (b)  the importation is not an importation of a kind specified in the regulations.

             (2)  However, if the importation relates to making supplies that would be *input taxed, the amount of the input tax credit on the importation is as follows:

where:

extent of non‑input‑taxed purpose is the extent to which the importation does not relate to making supplies that would be *input taxed, 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.

             (3)  In determining for the purposes of subsection (2) whether, or the extent to which, an importation relates to making supplies that would be *input taxed, subsections 15‑10(3) to (5) apply in the same way that they apply for the purposes of paragraph 15‑10(2)(a).

             (4)  Determinations made by the Commissioner under subsection 15‑25(4) apply (so far as they are capable of applying) to working out the extent to which a *partly creditable importation does not relate to making supplies that would be *input taxed.

             (5)  This section has effect despite sections 15‑20 and 15‑25 (which are about amounts of input tax credits).

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

             (1)  If:

                     (a)  this Division applies to working out the amount of a *creditable acquisition or *creditable importation that you made; and

                     (b)  the acquisition or importation is an acquisition or importation of a *car;

the amount of the input tax credit on the acquisition or importation under this Division must not exceed the amount (if any) of the input tax credit worked out under section 69‑10.

             (2)  However, if subsection 131‑40(2) or 131‑45(2) applies to the acquisition or importation:

                     (a)  take into account the operation of section 69‑10 in working out the full input tax credit for the purposes of that subsection; but

                     (b)  disregard subsection 69‑10(3).

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

             (1)  You have an increasing adjustment if:

                     (a)  an acquisition or importation that you made was *partly creditable; and

                     (b)  the input tax credit on the acquisition or importation is attributable to a tax period ending in a particular *financial year; and

                     (c)  the amount of the input tax credit is an amount worked out under this Division.

             (2)  The amount of the increasing adjustment is an amount equal to the difference between:

                     (a)  the amount of the input tax credit worked out under this Division; and

                     (b)  what would have been the amount of the input tax credit if this Division did not apply.

             (3)  In working out for the purposes of paragraph (2)(a) the amount of an input tax credit, take into account any change of circumstances that has given rise to:

                     (a)  an adjustment for the acquisition under Division 19; or

                     (b)  an adjustment for the acquisition under Division 21; or

                     (c)  an adjustment for the acquisition under Division 134.

Note:       Because of subsection 136‑10(3), the amount of the Division 21 adjustment will not be reduced under Division 136.

             (4)  In working out for the purposes of paragraph (2)(b) what would have been the amount of an input tax credit, take into account any change of circumstances that has given rise to:

                     (a)  an adjustment for the acquisition under Division 19 (worked out as if this Division had not applied to working out the amount of the input tax credit); or

                     (b)  an adjustment for the acquisition under Division 21; or

                     (c)  an adjustment for the acquisition under Division 134.

Note:       If this Division did not apply, the amount of the Division 21 adjustment would have been worked out under Division 136.

Example:    While an annual apportionment election has effect, you make a partly creditable acquisition for $1,100, for which you have an input tax credit of $100. The extent of your creditable purpose is 10%.

      During later tax periods, the price increases by $110, for which you have a decreasing adjustment under Division 19 of $10, and the supplier writes off $660 as a bad debt, for which you have an increasing adjustment under Division 21 of $60 (subsection 136‑10(3) prevents the amount from being reduced under Division 136).

      The amount of your increasing adjustment under this section is $45. This is the difference between the amounts under paragraphs (2)(a) and (b).

      The paragraph (2)(a) amount (which is effectively worked out on a fully creditable basis) is:

      The paragraph (2)(b) amount (which is based on a 10% creditable purpose) is:

131‑60  Attributing adjustments under section 131‑55

             (1)  An *increasing adjustment under section 131‑55 is attributable to:

                     (a)  the tax period worked out using the method statement; or

                     (b)  such earlier tax period as you choose.

Method statement

Step 1.   Work out the tax period (the ITC tax period) to which the input tax credit for the acquisition or importation to which the adjustment relates is attributable.

Step 2.   Work out in which year of income that tax period starts.

Step 3.   If you are required under section 161 of the *ITAA 1936 to lodge a return in relation to that year of income, work out the last day of the period, specified in the instrument made under that section, for you to lodge as required under that section.

Step 4.   The *increasing adjustment is attributable to the tax period in which that last day occurs.

Step 5.   If step 3 does not apply, the increasing adjustment is attributable to the tax period in which occurs 31 December in the next *financial year to start after the end of the ITC tax period.

Note:          Section 388‑55 in Schedule 1 to the Taxation Administration Act 1953 allows the Commissioner to defer the time for giving the GST return.

             (2)  Despite subsection (1), if, during (but not from the start of) the *financial year in which the ITC tax period ended, your *annual apportionment election ceases to have effect because:

                     (a)  you revoke your annual apportionment election, or the Commissioner disallows your election, during that financial year; and

                     (b)  the revocation or disallowance takes effect before the end of that financial year;

the *increasing adjustment is attributable to the tax period in which the cessation takes effect, or to such earlier tax period as you choose.

             (3)  However, the *increasing adjustment is attributable to a tax period provided under section 27‑39 or 27‑40 if that tax period ends earlier than the end of the tax period to which the increasing adjustment would, but for this subsection, be attributable under subsections (1) and (2).

             (4)  This section has effect despite section 29‑20 (which is about attributing your adjustments).

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

132‑1  What this Division is about

You may have a decreasing adjustment if you make a supply of something that you earlier acquired or imported, or subsequently applied, to make financial supplies or for a private or domestic purpose.

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

             (1)  You have a decreasing adjustment under this Division if:

                     (a)  you make a *taxable supply of a thing (or a supply of a thing that would have been a taxable supply had it not been *GST‑free under Subdivision 38‑J); and

                     (b)  the supply is a supply by way of sale; and

                     (c)  your acquisition, importation or subsequent *application of the thing, related solely or partly to making *financial supplies, or was solely or partly of a private or domestic nature.

             (2)  The amount of the *decreasing adjustment is as follows:

where:

adjusted input tax credit is:

                     (a)  the amount of any input tax credit that was attributable to a tax period in respect of the acquisition or importation; minus

                     (b)  the sum of:

                              (i)  any *increasing adjustments, under Subdivision 19‑C or Division 129, that were previously attributable to a tax period in respect of the acquisition or importation; and

                             (ii)  any increasing adjustment under Division 131 that has been previously, is or will be attributable to a tax period in respect of the acquisition or importation; plus

                     (c)  the sum of any *decreasing adjustments, under Subdivision 19‑C or Division 129 or 133, that were previously attributable to a tax period in respect of the acquisition or importation.

full input tax credit is the amount of the input tax credit to which you would have been entitled for acquiring or importing the thing for the purpose of your *enterprise if:

                     (a)  the acquisition or importation had been solely for a *creditable purpose; and

                     (b)  in the case where the supply to you was a *taxable supply because of section 72‑5 or 84‑5—the supply had been or is a *taxable supply under section 9‑5.

price is the *price of the *taxable supply.

             (3)  However, if the amount worked out under subsection (2) is greater than the difference between the full input tax credit and the adjusted input tax credit, the amount of the *decreasing adjustment is an amount equal to that difference.

             (4)  In working out the adjusted input tax credit, the acquisition, importation or *application in question is treated as having been for a *creditable purpose except to the extent *that the acquisition, importation or application:

                     (a)  relates to the making of *financial supplies; or

                     (b)  is of a private or domestic nature.

132‑10  Attribution of adjustments under this Division

             (1)  A *decreasing adjustment under this Division is attributable to:

                     (a)  the same tax period as the *taxable supply to which it relates; or

                     (b)  if it relates to a supply that is not a taxable supply—the tax period to which the supply would be attributable if it were a taxable supply.

             (2)  This section has effect despite section 29‑20 (which is about attributing your adjustments).

Division 133Providing additional consideration under gross‑up clauses

133‑1  What this Division is about

You may have a decreasing adjustment for an acquisition that you made if, to take account of a GST liability that the supplier is subsequently found to have, you provide additional consideration at a time when you can no longer claim an input tax credit.

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

             (1)  You have a decreasing adjustment if:

                     (a)  you made an acquisition on the basis that:

                              (i)  it was not a *creditable acquisition because the supply to which the acquisition relates was not a *taxable supply; or

                             (ii)  it was *partly creditable because the supply to which the acquisition relates was only partly a taxable supply; and

                     (b)  you provided *additional consideration for the acquisition in compliance with a contractual obligation that required you, or had the effect of requiring you, to provide additional consideration if:

                              (i)  in a case where subparagraph (a)(i) applies—the supply was later found to be a taxable supply, or to be partly a taxable supply; or

                             (ii)  in a case where subparagraph (a)(ii) applies—the supply was later found to be a taxable supply to a greater extent; and

                     (c)  GST on the supply has not ceased to be payable (other than as a result of its payment); and

                     (d)  at the time you provided the additional consideration, you were no longer entitled to an input tax credit for the acquisition.

Note:          Section 93‑5 or 93‑15 may provide a time limit on your entitlement to an input tax credit.

             (2)  The amount of the *decreasing adjustment is the difference between:

                     (a)  what would have been the *previously attributed input tax credit amount for the acquisition if:

                              (i)  the *additional consideration for the acquisition had been provided as part of the original *consideration for the acquisition; and

                             (ii)  in a case where you have not held a *tax invoice for the acquisition—you held such an invoice; and

                            (iii)  subsection 29‑10(4) did not apply in relation to the acquisition; and

                     (b)  the previously attributed input tax credit amount.

             (3)  To avoid doubt, additional consideration for an acquisition includes a part of the *consideration for the acquisition that:

                     (a)  relates to the amount of GST payable on the *taxable supply to which the acquisition relates; and

                     (b)  at the time of the acquisition, the parties to the transaction under which the acquisition was made assumed was not payable.

133‑10  Availability of adjustments under Division 19 for acquisitions

             (1)  If:

                     (a)  you have a *decreasing adjustment under this Division for an acquisition; and

                     (b)  the circumstances that gave rise to the adjustment also constitute an *adjustment event;

you do not have a decreasing adjustment under section 19‑70 for the acquisition in relation to those circumstances.

             (2)  This section has effect despite section 19‑70 (which is about adjustments for acquisitions arising because of adjustment events).

Division 134Third party payments

134‑1  What this Division is about

You may have a decreasing adjustment if you make a payment to an entity that acquires something that you had supplied to another entity. The entity receiving the payment may have an increasing adjustment.

134‑5  Decreasing adjustments for payments made to third parties

             (1)  You have a decreasing adjustment if:

                     (a)  you make a payment to an entity (the payee) that acquires a thing that you supplied to another entity (whether or not that other entity supplies the thing to the payee); and

                     (b)  your supply of the thing to the other entity:

                              (i)  was a *taxable supply; or

                             (ii)  would have been a taxable supply but for a reason to which subsection (3) applies; and

                     (c)  the payment is in one or more of the following forms:

                              (i)  a payment of *money or *digital currency;

                             (ii)  an offset of an amount of money or digital currency that the payee owes to you;

                            (iii)  a crediting of an amount of money or digital currency to an account that the payee holds; and

                     (d)  the payment is made in connection with, in response to or for the inducement of the payee’s acquisition of the thing; and

                     (e)  the payment is not *consideration for a supply to you.

          (1A)  However, subsection (1) does not apply if:

                     (a)  the supply of the thing to the payee is a *GST‑free supply, or is not *connected with the indirect tax zone; or

                     (b)  the Commissioner is required to make a payment to the payee, under Division 168 (about the tourist refund scheme), related to the payee’s acquisition of the thing;

and you know, or have reasonable grounds to suspect, that the supply of the thing to the payee is a GST‑free supply or is not connected with the indirect tax zone, or that the Commissioner is so required.

             (2)  The amount of the *decreasing adjustment is an amount equal to the difference between:

                     (a)  either:

                              (i)  if your supply to the other entity was a *taxable supply—the amount of GST payable on the supply; or

                             (ii)  if your supply to the other entity would have been a taxable supply but for a reason to which subsection (3) applies—the amount of GST that would have been payable on the supply had it been a taxable supply;

                            taking into account any other *adjustments that arose, or would have arisen, relating to the supply; and

                     (b)  the amount of GST that would have been payable, or would (but for a reason to which subsection (3) applies) have been payable, for that supply:

                              (i)  if the *consideration for the supply had been reduced by the amount of your payment to the payee; and

                             (ii)  taking into account any other adjustments that arose, or would have arisen, relating to the supply, as they would have been affected (if applicable) by such a reduction in the consideration.

             (3)  This subsection applies to the following reasons why your supply of the thing to the other entity was not a *taxable supply:

                     (a)  you and the other entity are *members of the same *GST group;

                     (b)  you and the other entity are members of the same *GST religious group;

                     (c)  you are the *joint venture operator for a *GST joint venture, and the other entity is a *participant in the GST joint venture.

             (4)  However:

                     (a)  paragraph (3)(a) does not apply if you and the payee are *members of the same *GST group when the payment referred to in paragraph (1)(a) is made; and

                     (b)  paragraph (3)(b) does not apply if you and the payee are members of the same *GST religious group when that payment is made.

134‑10  Increasing adjustments for payments received by third parties

             (1)  You have an increasing adjustment if:

                     (a)  you receive a payment from an entity (the payer) that supplied a thing that you acquire from another entity (whether or not that other entity acquired the thing from the payer); and

                     (b)  your acquisition of the thing from the other entity:

                              (i)  was a *creditable acquisition; or

                             (ii)  would have been a creditable acquisition but for a reason to which subsection (3) applies; and

                     (c)  the payment is in one or more of the following forms:

                              (i)  a payment of *money or *digital currency;

                             (ii)  an offset of an amount of money or digital currency that you owe to the payer;

                            (iii)  a crediting of an amount of money or digital currency to an account that you hold; and

                     (d)  the payment is made in connection with, in response to or for the inducement of your acquisition of the thing; and

                     (e)  the payment is not *consideration for a supply you make.

          (1A)  However, subsection (1) does not apply unless the supply of the thing by the payer:

                     (a)  was a *taxable supply; or

                     (b)  would have been a taxable supply but for any of the following:

                              (i)  the payer and the entity that acquired the thing from the payer being *members of the same *GST group;

                             (ii)  the payer and the entity that acquired the thing from the payer being members of the same *GST religious group;

                            (iii)  the payer being the *joint venture operator for a *GST joint venture, and the entity that acquired the thing from the payer being a *participant in the GST joint venture.

             (2)  The amount of the *increasing adjustment is an amount equal to the difference between:

                     (a)  either:

                              (i)  if your acquisition from the other entity was a *creditable acquisition—the amount of the input tax credit entitlement for the acquisition; or

                             (ii)  if your acquisition from the other entity would have been a creditable acquisition but for a reason to which subsection (3) applies—the amount that would have been the amount of the input tax credit entitlement for the acquisition had it been a creditable acquisition;

                            taking into account any other *adjustments that arose, or would have arisen, relating to the acquisition; and

                     (b)  the amount of the input tax credit to which you would have been entitled, or would (but for a reason to which subsection (3) applies) have been entitled, for that acquisition:

                              (i)  if the *consideration for the acquisition had been reduced by the amount of the payer’s payment to you; and

                             (ii)  taking into account any other adjustments that arose, or would have arisen, relating to the acquisition, as they would have been affected (if applicable) by such a reduction in the consideration.

             (3)  This subsection applies to the following reasons why your acquisition of the thing from the other entity was not a *creditable acquisition:

                     (a)  you and the other entity are *members of the same *GST group;

                     (b)  you and the other entity are members of the same *GST religious group;

                     (c)  you are the *joint venture operator for a *GST joint venture, and the other entity is a *participant in the GST joint venture.

             (4)  However:

                     (a)  paragraph (3)(a) does not apply if you and the payer are *members of the same *GST group when the payment referred to in paragraph (1)(a) is made; and

                     (b)  paragraph (3)(b) does not apply if you and the payer are members of the same *GST religious group when that payment is made.

134‑15  Attribution of decreasing adjustments

             (1)  If:

                     (a)  you have a *decreasing adjustment under section 134‑5; and

                     (b)  you do not hold a *third party 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 third party adjustment note.

However, this subsection does not apply in circumstances of a kind determined by the Commissioner, by legislative instrument, to be circumstances in which the requirement for an adjustment note does not apply.

Note:          For the giving of GST returns to the Commissioner, see Division 31.

             (2)  This section does not apply to a *decreasing adjustment of an amount that does not exceed the amount provided for under subsection 29‑80(2).

             (3)  This section has effect despite section 29‑20 (which is about attributing adjustments).

134‑20  Third party adjustment notes

             (1)  A third party adjustment note for a *decreasing adjustment that you have under section 134‑5 is a document:

                     (a)  that is created by you; and

                     (b)  a copy of which is given, in the circumstances set out in subsection (2), to the entity that received the payment that gave rise to the adjustment; and

                     (c)  that sets out your *ABN; and

                     (d)  that contains such other information as the Commissioner determines in writing; and

                     (e)  that is in the *approved form.

However, the Commissioner may treat as a third party adjustment note a particular document that is not a third party adjustment note.

             (2)  You must give the copy of the document to the entity that received the payment:

                     (a)  within 28 days after the entity requests you to give the copy; or

                     (b)  if you become aware of the *adjustment before the copy is requested—within 28 days, or such other number of days as the Commissioner determines under subsection (4) or (6), after becoming aware of the adjustment.

             (3)  Subsection (2) does not apply to an *adjustment of an amount that does not exceed the amount provided for under subsection 29‑80(2).

             (4)  The Commissioner may determine in writing that paragraph (2)(b) has effect, in relation to a particular document, as if the number of days referred to in that paragraph is the number of days specified in the determination.

             (5)  A determination made under subsection (4) is not a legislative instrument.

             (6)  The Commissioner may determine, by legislative instrument, circumstances in which paragraph (2)(b) has effect, in relation to those circumstances, as if the number of days referred to in that paragraph is the number of days specified in the determination.

             (7)  A determination made under subsection (4) has effect despite any determination made under subsection (6).

134‑25  Adjustment events do not arise

                   To avoid doubt, a payment that gives rise to an *adjustment under this Division cannot give rise to an *adjustment event.

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

             (1)  For the purposes of working out whether you have an adjustment under this Division, disregard sections 48‑55 and 49‑50.

             (2)  However, this section does not affect the application of sections 48‑55 and 49‑50 for the purposes of working out the amount of an adjustment under this Division.

Note:          Sections 48‑55 and 49‑50 require GST groups and GST religious groups to be treated as single entities for the purposes of adjustments.

Division 135Supplies of going concerns

135‑1  What this Division is about

The recipient of a supply of a going concern has an increasing adjustment to take into account the proportion (if any) of supplies that will be made in running the concern and that will not be taxable supplies or GST‑free supplies. Later adjustments are needed if this proportion changes over time.

135‑5  Initial adjustments for supplies of going concerns

             (1)  You have an increasing adjustment if:

                     (a)  you are the *recipient of a *supply of a going concern, or a supply that is *GST‑free under section 38‑480; and

                     (b)  you intend that some or all of the supplies made through the *enterprise to which the supply relates will be supplies that are neither *taxable supplies nor *GST‑free supplies.

             (2)  The amount of the increasing adjustment is as follows:

where:

proportion of non‑creditable use is the proportion of all the supplies made through the *enterprise that you intend will be supplies that are neither *taxable supplies nor *GST‑free supplies, expressed as a percentage worked out on the basis of the *prices of those supplies.

supply price means the *price of the supply in relation to which the increasing adjustment arises.

135‑10  Later adjustments for supplies of going concerns

             (1)  If you are the *recipient of a *supply of a going concern, or a supply that is *GST‑free under section 38‑480, Division 129 (which is about changes in the extent of creditable purpose) applies to that acquisition, in relation to:

                     (a)  the proportion of all the supplies made through the *enterprise that you intend will be supplies that are neither *taxable supplies nor *GST‑free supplies; and

                     (b)  the proportion of all the supplies made through the *enterprise that are supplies that are neither taxable supplies nor GST‑free supplies;

in the same way as that Division applies:

                     (c)  in relation to the extent to which you made an acquisition for a *creditable purpose; and

                     (d)  in relation to the extent to which a thing acquired is *applied for a creditable purpose.

             (2)  For the purpose of applying Division 129, the proportions referred to in paragraphs (1)(a) and (b) are to be expressed as percentages worked out on the basis of the *prices of the supplies in question.

             (3)  This section applies in relation to any *supply of a going concern, or a supply that is *GST‑free under section 38‑480, whether or not it is a supply in respect of which you have had an *increasing adjustment under section 135‑5.

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

Table of Subdivisions

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

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

136‑1  What this Division is about

The amount of an adjustment that you have under Division 21 for a bad debt is reduced under this Division if the transaction to which the adjustment relates:

•      was a supply that was partly taxable or an acquisition that was partly creditable; or

•      was fully taxable or creditable, but not to the extent of 1/11 of the price or consideration for the transaction.

Subdivision 136‑ABad debts relating to partly taxable or creditable transactions

136‑5  Adjustments relating to partly taxable supplies

                   If you have an *adjustment under section 21‑5, 21‑10, 136‑30 or 136‑35 in relation to a supply that was partly a *taxable supply, the amount of that adjustment is reduced to the following amount:

where:

full adjustment is what would be the amount of the adjustment worked out under section 21‑5, 21‑10, 136‑30 or 136‑35 if this section did not apply.

taxable proportion is the proportion of the *value of the supply (worked out as if it were solely a taxable supply) that the taxable supply represents.

Example:    If the amount of an adjustment under section 21‑5 would be $100 but the supply was only 80% taxable, the amount of the adjustment is $80.

136‑10  Adjustments in relation to partly creditable acquisitions

             (1)  If you have an *adjustment under section 21‑15, 21‑20, 136‑40 or 136‑45 in relation to a *creditable acquisition that was *partly creditable, the amount of that adjustment is reduced to the following amount:

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 of *creditable purpose last used to work out:

                     (a)  the amount of the input tax credit for the acquisition; or

                     (b)  the amount of any *adjustment under Division 129 in relation to the acquisition;

expressed as a percentage of the total purpose of the acquisition.

full adjustment is what would be the amount of the adjustment worked out under section 21‑15, 21‑20, 136‑40 or 136‑45 if this section did not apply.

             (2)  If you have an *adjustment under section 21‑15, 21‑20, 136‑40 or 136‑45 in relation to a *creditable acquisition that was a *reduced credit acquisition and that was not *partly creditable (that is, it is wholly for a *creditable purpose because of Division 70), the amount of that adjustment is reduced to the following amount:

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.

percentage credit reduction is the reduced input tax credit percentage prescribed for the purposes of subsection 70‑5(2) for an acquisition of that kind.

full adjustment is what would be the amount of the adjustment worked out under section 21‑15, 21‑20, 136‑40 or 136‑45 if this section did not apply.

             (3)  However, this section does not apply to an *adjustment that you have in relation to a *creditable acquisition if:

                     (a)  the amount of the input tax credit for the acquisition is worked out under Division 131; and

                     (b)  the adjustment is attributable to a tax period that is not later than the tax period to which an adjustment under section 131‑55 relating to the acquisition is attributable.

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

136‑30  Writing off bad debts (taxable supplies)

             (1)  The amount of a *decreasing adjustment that you have under section 21‑5, relating to a *taxable supply that is *taxable at less than 1/11 of the price, is worked out under this section and not under section 21‑5.

             (2)  This is how to work out the amount:

Method statement

Step 1.   Work out the amount of GST (if any) that was payable on the supply, taking into account any previous *adjustments for the supply. This amount is the previous GST amount.

Step 2.   Add together:

               (a)     the amount or amounts written off as bad from the debt to which the decreasing adjustment relates; and

              (b)     the amount of the debt that has been *overdue for 12 months or more (other than amounts already written off).

Step 3.   Subtract the step 2 amount from the *price of the supply.

Step 4.   Work out the amount of GST (if any), taking into account any previous *adjustments for the supply (but not adjustments relating to bad debts or debts overdue), that would be payable on the supply if the *price of the supply were the step 3 amount. This amount of GST is the adjusted GST amount.

Step 5.   Subtract the adjusted GST amount from the previous GST amount.

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

             (1)  The amount of an *increasing adjustment that you have under section 21‑10, relating to a *taxable supply that is *taxable at less than 1/11 of the price, is worked out under this section and not under section 21‑10.

             (2)  This is how to work out the amount:

Method statement

Step 1.   Work out the amount of GST (if any) that was payable on the supply, taking into account any previous *adjustments for the supply. This amount is the previous GST amount.

Step 2.   Add together:

               (a)     the amount or amounts previously written off as bad from the debt to which the increasing adjustment relates; and

              (b)     the amount of the debt that has been *overdue for 12 months or more (other than amounts already written off).

Step 3.   Subtract the step 2 amount from the *price of the supply.

Step 4.   Add to the step 3 amount an amount equal to the amount or amounts, written off or overdue for 12 months or more, that have been recovered.

Step 5.   Work out the amount of GST (if any), taking into account any previous *adjustments for the supply (but not adjustments relating to bad debts or debts overdue), that would be payable on the supply if the *price of the supply were the step 4 amount. This amount of GST is the adjusted GST amount.

Step 6.   Subtract the previous GST amount from the adjusted GST amount.

136‑40  Bad debts written off (creditable acquisitions)

             (1)  The amount of an *increasing adjustment that you have under section 21‑15, relating to a *creditable acquisition that is *creditable at less than 1/11 of the consideration, is worked out under this section and not under section 21‑15.

             (2)  This is how to work out the amount:

Method statement

Step 1.   Work out the amount of the input tax credit (if any) to which you were entitled for the acquisition, taking into account any previous *adjustments for the acquisition. This amount is the previous credit amount.

Step 2.   Add together:

               (a)     the amount or amounts previously written off as bad from the debt to which the increasing adjustment relates; and

              (b)     the amount of the debt that has been *overdue for 12 months or more (other than amounts already written off).

Step 3.   Subtract the step 2 amount from the total amount of the *consideration that you have either provided, or are liable to provide, for the acquisition.

Step 4.   Work out the amount of the input tax credit (if any), taking into account any previous *adjustments for the acquisition (but not adjustments relating to bad debts or debts overdue), to which you would be entitled for the acquisition if the *consideration for the acquisition were the step 3 amount. This amount of GST is the adjusted credit amount.

Step 5.   Subtract the adjusted credit amount from the previous credit amount.

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

             (1)  The amount of a *decreasing adjustment that you have under section 21‑20, relating to a *creditable acquisition that is *creditable at less than 1/11 of the consideration, is worked out under this section and not under section 21‑20.

             (2)  This is how to work out the amount:

Method statement

Step 1.   Work out the amount of the input tax credit (if any) to which you were entitled for the acquisition, taking into account any previous *adjustments for the acquisition. This amount is the previous credit amount.

Step 2.   Add together:

               (a)     the amount or amounts previously written off as bad from the debt to which the decreasing adjustment relates; and

              (b)     the amount of the debt that has been *overdue for 12 months or more (other than amounts already written off).

Step 3.   Subtract the step 2 amount from the total amount of the *consideration that you have either provided, or are liable to provide, for the acquisition.

Step 4.   Add to the step 3 amount an amount equal to the amount or amounts, written off or overdue for 12 months or more, that you have paid.

Step 5.   Work out the amount of the input tax credit (if any), taking into account any previous *adjustments for the acquisition (but not adjustments relating to bad debts or debts overdue), to which you would be entitled for the acquisition if the *consideration for the acquisition were the step 4 amount. This amount of GST is the adjusted credit amount.

Step 6.   Subtract the previous credit amount from the adjusted credit amount.

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

             (1)  A *taxable supply is taxable at less than 1/11 of the price if the amount of GST payable on the supply is an amount that is less than 1/11 of the *price of the supply.

             (2)  A *creditable acquisition is creditable at less than 1/11 of the consideration if the *taxable supply to which it relates is *taxable at less than 1/11 of the price.

Division 137Stock on hand on becoming registered etc.

137‑1  What this Division is about

If you become registered or required to be registered, you may have a decreasing adjustment for stock you have already acquired.

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

             (1)  You have a decreasing adjustment if:

                     (a)  you become *registered or *required to be registered; and

                     (b)  at that time, you hold stock for the purpose of sale or exchange, or for use as raw materials, in *carrying on your *enterprise; and

                     (c)  you had acquired the stock solely or partly for a *creditable purpose.

             (2)  However, this section does not apply if:

                     (a)  you were entitled to an input tax credit for the acquisition; and

                     (b)  you have not had a *increasing adjustment under Division 138 (cessation of registration) relating solely or partly to the stock.

             (3)  The amount of the decreasing adjustment is an amount equal to what would have been the *previously attributed input tax credit amount for the acquisition if you had been *registered at the time of the acquisition.

Division 138Cessation of registration

138‑1  What this Division is about

An entity whose registration has been cancelled may still have acquisitions and importations for which entitlements to input tax credits have arisen. This Division provides for an increasing adjustment to cancel those input tax credits.

138‑5  Adjustments for cessation of registration

             (1)  You have an increasing adjustment if:

                     (a)  your *registration is cancelled; and

                     (b)  immediately before the cancellation takes effect, your assets include anything in respect of which you were, or are, entitled to an input tax credit.

Note:          Increasing adjustments increase your net amounts.

             (2)  The amount of the adjustment, for each thing referred to in paragraph (1)(b), is as follows:

where:

applicable value is:

                     (a)  the *GST inclusive market value of the thing immediately before the cancellation takes effect; or

                     (b)  if you were, or are, entitled to an input tax credit for acquiring the thing—the amount of the *consideration that you provided, or were liable to provide, for your acquisition of the thing, but only if the amount is less than that value; or

                     (c)  if you were, or are, entitled to an input tax credit for importing the thing—the cost to you of acquiring or producing the thing (plus the *assessed GST paid on its importation), but only if the amount is less than that value.

             (3)  However, an *adjustment does not arise under this section in respect of an asset if:

                     (a)  there were one or more *adjustment periods for your acquisition or importation of the asset; and

                     (b)  the last of those adjustment periods has ended before the cancellation of your *registration takes effect.

138‑10  Attributing adjustments for cessation of registration

             (1)  An *adjustment that you have under this Division is attributable to:

                    (aa)  if you are an *incapacitated entity—your tax period under section 27‑39; or

                     (a)  your concluding tax period under section 27‑40; or

                     (b)  if, because of subsection 151‑55(1) or 162‑85(1), you do not have a concluding tax period under section 27‑40—the tax period to which that subsection applies.

             (2)  This section has effect despite section 29‑20 (which is about attributing your adjustments).

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

             (1)  The GST payable by you on a *taxable supply, the input tax credit to which you are entitled for a *creditable acquisition, or an *adjustment that you have, is attributable to a particular tax period, and no other, if:

                     (a)  during the tax period, your *registration is cancelled; and

                     (b)  immediately before the cancellation, you were *accounting on a cash basis; and

                     (c)  the GST on the supply, the input tax credit on the acquisition, or the adjustment, was not attributable, to any extent, to a previous tax period during which you accounted on a cash basis; and

                     (d)  it would have been attributable to that previous tax period had you not accounted on a cash basis during that period.

For accounting on a cash basis, see Subdivision 29‑B.

             (2)  This section has effect despite sections 29‑5, 29‑10 and 29‑20 (which are about attributing GST on supplies, input tax credits on acquisitions, and adjustments) and any other provisions of this Chapter.

138‑17  Situations to which this Division does not apply

             (1)  This Division does not apply to anything included in the assets of an entity whose *registration is cancelled, to the extent that the thing relates to an *enterprise that the entity *carried on before the cancellation, if:

                     (a)  the cancellation arises as a result of the death of the entity, and the executor or trustee of the deceased estate:

                              (i)  is registered or is *required to be registered; and

                             (ii)  continues, immediately after the cancellation, to carry on that enterprise; or

                     (b)  the cancellation arises as a result of the executor or trustee of a deceased estate ceasing to carry on any enterprise, and one or more beneficiaries of the deceased estate:

                              (i)  are registered or is *required to be registered; and

                             (ii)  continue, immediately after the cancellation, to carry on the enterprise that the deceased had carried on.

             (2)  Division 129 (which is about changes in the extent of creditable purpose) continues to apply to the acquisition or importation of the thing immediately after the cancellation if:

                     (a)  Subdivision 129‑A does not prevent an adjustment arising under that Division for the acquisition or importation; and

                     (b)  the cancellation occurs during an *adjustment period for the acquisition or importation.

             (3)  For the purposes of applying Division 129 to the acquisition or importation after the cancellation:

                     (a)  the entity *carrying on the *enterprise in question immediately after the cancellation is taken to have made the acquisition or importation at the time it was originally made; and

                     (b)  the extent (if any) to which the thing was originally acquired or imported for a *creditable purpose is taken to be the extent (if any) to which the entity acquired or imported the thing for a creditable purpose; and

                     (c)  any *application of the thing since the original acquisition or importation is taken to be an application of the thing by the entity.

138‑20  Application of Division 129

                   This Division (except subsections 138‑17(2) and (3)) does not affect the operation of Division 129 (which is about changes in the extent of creditable purpose).

Division 139Distributions from deceased estates

 

139‑1  What this Division is about

Distributions from deceased estates, for private consumption, that are not taxable supplies may involve disposing of assets that were acquired or imported in circumstances giving rise to entitlements to input tax credits. This Division provides for an increasing adjustment to cancel those input tax credits.

139‑5  Adjustments for distributions from deceased estates

             (1)  You have an increasing adjustment if:

                     (a)  you are the executor or trustee of a deceased estate; and

                     (b)  you are *registered or *required to be registered; and

                     (c)  you supply an asset of the deceased estate to a beneficiary of the deceased estate; and

                     (d)  the supply is not a *taxable supply and is not a supply that is *GST‑free or *input taxed; and

                     (e)  you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person’s acquisition or importation of the asset.

Note:          Increasing adjustments increase your net amounts.

             (2)  The amount of the adjustment, for the asset, is as follows:

where:

applicable value is:

                     (a)  the *GST inclusive market value of the asset immediately before it is supplied; or

                     (b)  if you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person acquiring the thing—the amount of the *consideration that you or the deceased person provided, or was liable to provide, for the acquisition of the thing, but only if the amount is less than that value; or

                     (c)  if you were, or are, or the deceased person was, entitled to an input tax credit for the deceased person importing the thing—the cost to you or the deceased person of acquiring or producing the thing (plus the *assessed GST paid on its importation), but only if the amount is less than that value.

             (3)  However, an *adjustment does not arise under this section in respect of the asset if:

                     (a)  the asset related to an *enterprise that the deceased person *carried on, and the beneficiary intends to continue to carry on that enterprise; or

                     (b)  there were one or more *adjustment periods for the deceased person’s acquisition or importation of the asset, and the last of those adjustment periods has ended before the cancellation of your *registration takes effect.

139‑10  Attributing adjustments for distributions from deceased estates

             (1)  An *adjustment that you have under this Division is attributable to the tax period in which it arises.

             (2)  This section has effect despite section 29‑20 (which is about attributing your adjustments).

139‑15  Application of Division 129

                   This Division does not affect the operation of Division 129 (which is about changes in the extent of creditable purpose).

Division 141Tradex scheme goods

141‑1  What this Division is about

The holder of a tradex order has an increasing adjustment if goods relating to that order are dealt with contrary to the Tradex Scheme.

Note:          GST would not have been payable on importation of the goods under the Tradex Scheme: see section 42‑5.

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

             (1)  You have an increasing adjustment if:

                     (a)  you import *tradex scheme goods; and

                     (b)  you are the holder (within the meaning of the Tradex Scheme Act 1999) of the *tradex order relating to the goods; and

                     (c)  the importation would have been a *taxable importation if the goods had not been covered by item 21A of Schedule 4 to the Customs Tariff Act 1995 at the time of their entry for home consumption under the Customs Act 1901; and

                     (d)  any of the circumstances referred to in subsection 21(1) of that Act occur in respect of any of the goods.

However, the increasing adjustment only arises in relation to the first occurrence of such a circumstance following an importation of the goods.

             (2)  The amount of the *increasing adjustment is the difference between:

                     (a)  the amount of GST that would have been payable on the importation if the importation had been a *taxable importation; and

                     (b)  the amount (if any) of the input tax credit to which you would have been entitled for the importation if the importation had been a taxable importation.

141‑10  Meaning of tradex scheme goods etc.

             (1)  Tradex scheme goods are imported goods that:

                     (a)  are nominated goods (within the meaning of the Tradex Scheme Act 1999) in relation to a *tradex order; and

                     (b)  were covered by item 21A in Schedule 4 to the Customs Tariff Act 1995 at the time of their entry for home consumption under the Customs Act 1901.

             (2)  Tradex order has the meaning given by section 4 of the Tradex Scheme Act 1999.

141‑15  Attribution of adjustments under this Division

             (1)  An adjustment under this Division is attributable to the tax period in which the adjustment arises.

             (2)  This section has effect despite section 29‑20 (which is about attributing your adjustments).

141‑20  Application of Division 129

                   This Division does not affect the operation of Division 129 (which is about changes in the extent of creditable purpose).

Division 142Excess GST

Table of Subdivisions

142‑A   Excess GST unrelated to adjustments

142‑B    GST related to cancelled supplies

142‑C    Passed‑on GST

142‑1  What this Division is about

Excess GST is not to be refunded if this would give an entity a windfall gain.

Note:          Refunding excess GST to a supplier will give it a windfall gain if it has already passed on the excess GST in the price of the supply (and not reimbursed the recipient).

Subdivision 142‑AExcess GST unrelated to adjustments

142‑5  When this Subdivision applies

             (1)  This Subdivision applies if, after disregarding any amounts covered by subsection (2), your *assessed net amount for a tax period takes into account an amount of GST exceeding that which is payable.

Note:          This Subdivision applies whether or not you have paid, or been refunded, the assessed net amount.

Example:    Sunny Co mistakenly reports a negative net amount of $4,000 made up of GST of $10,000 less input tax credits of $14,000. In fact, Sunny Co’s GST should have been $8,000 making its negative net amount $6,000. Sunny Co has excess GST of $2,000.

             (2)  Disregard the following amounts:

                     (a)  an amount of GST that was correctly payable and attributable to the tax period, but which later becomes the subject of a *decreasing adjustment;

                     (b)  an amount of GST that is payable, but is correctly attributable to a different tax period;

                     (c)  an amount of GST to which section 142‑16 (about low value goods) applies.

142‑10  Refunding the excess GST

                   For the purposes of each *taxation law, so much of the excess from subsection 142‑5(1) (the excess GST) as you have *passed on to another entity is taken to have always been:

                     (a)  payable; and

                     (b)  on a *taxable supply;

until you reimburse the other entity for the passed‑on GST.

Note 1:       If you reimburse the passed‑on GST so that this section ceases to apply there will be an adjustment event under paragraph 19‑10(1)(b) or (c). You will have a decreasing adjustment (see section 19‑55) and the other entity may have an increasing adjustment (see section 19‑80).

Note 2:       Any excess GST you have not passed on will be refunded as described in section 155‑75 in Schedule 1 to the Taxation Administration Act 1953.

Note 3:       While this section applies, paragraph 11‑5(b) (about taxable supplies) is satisfied for the corresponding acquisition by the other entity.

142‑15  When section 142‑10 does not apply

Commissioner satisfied it is inappropriate for that section to apply

             (1)  Treat section 142‑10 as never having applied to the extent that the Commissioner is satisfied that:

                     (a)  applying that section would be inconsistent with the principle that excess GST is not to be refunded if this would give an entity a windfall gain; and

                     (b)  you have requested a decision under this subsection in the *approved form.

Note:          Refusing to make the requested decision 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 relating to you made under subsection (1).

If there never was a supply

             (3)  Treat section 142‑10 as never having applied to the extent that:

                     (a)  you treated the excess GST as payable on a supply, but in fact there never was a supply; and

                     (b)  you reimburse the other entity for the *passed‑on GST.

Note:          If you reimburse the passed‑on GST, you will be refunded an equivalent amount as described in section 155‑75 in Schedule 1 to the Taxation Administration Act 1953.

So far as it relates to your creditable acquisitions

             (4)  Section 142‑10 does not apply for the purposes of applying subsection 11‑15(2) (about creditable purpose) to you.

If the recipient knows you have not paid the excess GST

             (5)  Section 142‑10 does not apply for the purposes of applying a *taxation law to the other entity if, and while, that other entity knows, or could reasonably be expected to have known, that you have not paid the excess GST to the Commissioner.

Note:          Section 142‑10 still applies for the purposes of applying taxation laws to you.

142‑16  No refund of excess GST relating to supplies treated as non‑taxable importations

             (1)  This section applies to an amount of GST on a supply (the low value goods GST) that is taken into account in your *assessed net amount for a tax period if:

                     (a)  you incorrectly treated the low value goods GST as payable on a supply of goods; and

                     (b)  an importation of the goods was a *taxable importation, but was incorrectly treated as being a *non‑taxable importation under section 42‑15; and

                     (c)  the *recipient of the supply is a *consumer of the supply.

             (2)  For the purposes of each *taxation law, the low value goods GST is taken to have always been payable on a *taxable supply until:

                     (a)  to the extent (if any) that you have *passed on the GST to another entity—you reimburse the other entity for the passed on GST; and

                     (b)  an entity provides to you a declaration or information that indicates that GST has been paid on the *taxable importation.

Subdivision 142‑BGST related to cancelled supplies

142‑20  Refunding GST relating to cancelled supplies

             (1)  This section applies if:

                     (a)  your *assessed net amount for a tax period takes into account an amount of GST on a supply; and

                     (b)  you have a *decreasing adjustment attributable to a later tax period as a result of the cancellation of the supply.

             (2)  Reduce:

                     (a)  your *decreasing adjustment; and

                     (b)  if the *recipient of the supply has a corresponding *increasing adjustment—the recipient’s increasing adjustment;

to the extent that you have *passed on that GST to the recipient, but not reimbursed the recipient for the passed‑on GST.

             (3)  This section has effect despite sections 19‑55 (about decreasing adjustments for supplies) and 19‑80 (about increasing adjustments for acquisitions).

Subdivision 142‑CPassed‑on GST

142‑25  Working out if GST has been passed on

             (1)  Some or all of an amount of GST may have been passed on to another entity even if:

                     (a)  a *tax invoice is not issued to or by that other entity; or

                     (b)  a tax invoice issued to or by that other entity relates to that GST, but does not contain enough information to enable that GST to be clearly ascertained.

             (2)  If:

                     (a)  you issue a *tax invoice or a notice under section 84‑89 to another entity, or another entity issues a *recipient created tax invoice to you; and

                     (b)  the invoice or notice contains enough information to enable some or all of an amount of GST to be clearly ascertained; and

                     (c)  in a case where you must pay the *assessed net amount for a tax period to which the invoice or notice relates—you have paid that assessed net amount to the Commissioner;

the invoice or notice is prima facie evidence of that part of that GST having *passed on to that other entity.

Part 4‑5Special rules mainly about registration

Note:       The special rules in this Part mainly modify the operation of Part 2‑5, but they may affect other Parts of Chapter 2 in minor ways.

Division 144Taxis

144‑1  What this Division is about

Taxi operators are required to be registered, regardless of turnover.

144‑5  Requirement to register

             (1)  You are required to be registered if, in *carrying on your enterprise, you supply *taxi travel.

             (2)  It does not matter whether:

                     (a)  your *GST turnover meets the *registration turnover threshold; or

                     (b)  in *carrying on your enterprise, you make other supplies besides supplies of *taxi travel.

             (3)  This section has effect despite section 23‑5 (which is about who is required to be registered).

Division 146Limited registration entities

146‑1  What this Division is about

Non‑residents may elect to be limited registration entities. Limited registration entities are not entitled to input tax credits for acquisitions and importations, and must have quarterly tax periods.

Note:          The Commissioner may approve simpler approved forms for limited registration entities: see subsection 388‑50(3) in Schedule 1 to the Taxation Administration Act 1953.

146‑5  Limited registration entities

             (1)  You are a limited registration entity for a tax period applying to you if an election under subsection (2) is in effect for you during the period.

Electing to be a limited registration entity

             (2)  You may, by notifying the Commissioner in the *approved form, make an election under this subsection if you are a *non‑resident who:

                     (a)  makes, or intends to make, one or more supplies that are:

                              (i)  *inbound intangible consumer supplies; or

                             (ii)  *offshore supplies of low value goods that were, or would be, *connected with the indirect tax zone, solely because of Subdivision 84‑C; or

                     (b)  is, or intends to become, a *redeliverer of *offshore supplies of low value goods.

When an election is in effect

             (3)  The election:

                     (a)  takes effect from the start of the tax period you nominate in the election; and

                     (b)  if your *registration is cancelled and the date of effect of the cancellation occurs after the start of that tax period—ceases to have effect on the date of effect of the cancellation; and

                     (c)  if paragraph (b) does not apply and, under subsection (5), you revoke the election—ceases to have effect at the start of your first tax period to start after the revocation.

             (4)  However, the election never takes effect if your *registration is cancelled and the date of effect of the cancellation occurs on or before the start of the tax period you nominate in the election.

Revoking an election

             (5)  You may, by notifying the Commissioner in the *approved form, revoke an election under subsection (2).

             (6)  However, subsection (5) does not apply if you have been notified that the Commissioner has decided to cancel your *registration (whether or not the cancellation has already taken effect).

146‑10  Limited registration entities cannot make creditable acquisitions

             (1)  An acquisition made by a *limited registration entity is not a *creditable acquisition if an election under subsection 146‑5(2) is in effect for the entity when the acquisition is made.

             (2)  However, subsection (1) does not apply, and is taken never to have applied, to the acquisition if you revoke the election under subsection 146‑5(5) during:

                     (a)  the *financial year in which the acquisition is made; or

                     (b)  the next financial year.

             (3)  This section has effect despite section 11‑5 (which is about what is a creditable acquisition).

146‑15  Limited registration entities cannot make creditable importations

             (1)  An importation made by a *limited registration entity is not a *creditable importation if an election under subsection 146‑5(2) is in effect for the entity when the importation is made.

             (2)  However, subsection (1) does not apply, and is taken never to have applied, to the importation if you revoke the election under subsection 146‑5(5) during:

                     (a)  the *financial year in which the importation is made; or

                     (b)  the next financial year.

             (3)  This section has effect despite section 15‑5 (which is about what is a creditable importation).

146‑20  Entries in the Australian Business Register

             (1)  Subsection 25‑10(2) does not apply if:

                     (a)  you become *registered; and

                     (b)  on the date your registration takes or took effect, you are a *limited registration entity.

Note:          Under subsection 25‑10(2), the Australian Business Registrar would otherwise be required to enter that date in the Australian Business Register.

             (2)  However, if:

                     (a)  you cease to be a *limited registration entity at a time when you are *registered; and

                     (b)  because of subsection (1) of this section, subsection 25‑10(2) did not apply to your registration;

subsection 25‑10(2) is taken to apply from the time you cease to be a limited registration entity.

             (3)  Subsection 25‑60(2) does not apply if:

                     (a)  your *registration is cancelled; and

                     (b)  because of subsection (1) of this section, the date on which your registration took effect was not entered in the *Australian Business Register; and

                     (c)  immediately before the cancellation took effect, you were a *limited registration entity.

Note:          Under subsection 25‑60(2), the Australian Business Registrar would otherwise be required to enter that date in the Australian Business Register.

146‑25  Limited registration entities have only quarterly tax periods

             (1)  If you are a *limited registration entity, you cannot make an election under section 27‑10, and the Commissioner cannot determine your tax periods under section 27‑15 or 27‑37.

Note:          Sections 27‑10 and 27‑15 provide for each individual month to be a tax period. Section 27‑37 provides for 12 complete tax periods in each year.

             (2)  An election by you under section 27‑10 or a determination under section 27‑15 or 27‑37 in relation to you is taken not to be in force at any time during which you are a *limited registration entity.

             (3)  This section has effect despite sections 27‑10, 27‑15 and 27‑37 (which are about one month tax periods).

Division 149Government entities

149‑1  What this Division is about

Parts of the Commonwealth, a State or a Territory may register even if they are not separate legal entities. Once registered, they may become liable for GST and entitled to input tax credits. Government entities may also form GST groups.

149‑5  Government entities may register

             (1)  A *government entity may apply to be *registered under section 23‑10 even if:

                     (a)  it is not an entity; and

                     (b)  it is not *carrying on an *enterprise or is not intending to carry on an enterprise.

             (2)  For the purposes of subsections 25‑5(1) and (3), the Commissioner is to treat the government entity as an entity.

             (3)  The Commissioner must *register the government entity whether or not the Commissioner is satisfied that it is *carrying on an *enterprise or intending to carry on an enterprise.

             (4)  This section has effect despite section 23‑10 (which is about who may be registered) and modifies the effect of section 25‑5 (which is about when the Commissioner must register an entity).

149‑10  Government entities are not required to be registered

             (1)  A *government entity is not *required to be registered even if:

                     (a)  it is *carrying on an *enterprise; and

                     (b)  its *GST turnover meets the *registration turnover threshold.

             (2)  This subsection has effect despite section 23‑5.

149‑15  GST law applies to registered government entities

                   For the purposes of the *GST law, a *government entity that is *registered is treated, while its registration has effect, as if it were an entity carrying on an *enterprise.

149‑20  Government entities not required to cancel their registration

                   Section 25‑50 and subsection 25‑55(2) (which are about cancelling registration) do not apply to *government entities.

149‑25  Membership requirements of a government GST group

                   A *government related entity satisfies the membership requirements for a *GST group, or a proposed GST group, of government related entities if:

                     (a)  it is *registered; and

                     (b)  it is not a *member of any other GST group; and

                     (c)  it has the same tax periods applying to it as the tax periods applying to all the other members of the GST group or proposed GST group; and

                     (d)  it accounts on the same basis as all those other members; and

                     (e)  all those other members are government related entities.

Note:          Some government related entities can still use section 48‑10 to satisfy the membership requirements of GST groups.

Part 4‑6Special rules mainly about tax periods

Note:       The special rules in this Part mainly modify the operation of Part 2‑6, but they may affect other Parts of Chapter 2 in minor ways.

Division 151Annual tax periods

Table of Subdivisions

151‑A   Electing to have annual tax periods

151‑B    Consequences of electing to have annual tax periods

151‑1  What this Division is about

In some cases, you may elect to have annual tax periods. You will then lodge GST returns, and pay amounts of GST or receive refunds of GST, on an annual basis (which better matches your obligation to lodge an income tax return).

Subdivision 151‑AElecting to have annual tax periods

151‑5  Eligibility to make an annual tax period election

             (1)  You are eligible to make an *annual tax period election if:

                     (a)  you are not *required to be registered; and

                     (b)  you have not made any election under section 162‑15 to pay GST by instalments (other than such an election that is no longer in effect).

             (2)  However, you are not eligible to make an *annual tax period election if the only reason you are not *required to be registered is because you disregarded supplies under paragraph 188‑15(3)(b) or 188‑20(3)(b) (which are about supplies of rights or options offshore).

151‑10  Making an annual tax period election

             (1)  You may, by notifying the Commissioner in the *approved form, make an *annual tax period election if you are eligible under section 151‑5.

             (2)  Your election takes effect from:

                     (a)  the start of the earliest tax period for which, on the day on which you make your election, your *GST return is not yet due (taking into account any further period the Commissioner allows under paragraph 31‑8(1)(b) or 31‑10(1)(b)); or

                     (b)  the start of such other tax period as the Commissioner allows, in accordance with a request you make in the *approved form.

Note:          Refusing a request to allow your election to take effect from the start of another tax period is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

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

             (1)  A *representative member of a *GST group cannot make an *annual tax period election unless each *member of the GST group is eligible under section 151‑5.

             (2)  If the *representative member makes such an election, the *annual tax period applying to the representative member also applies to each member.

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

             (1)  You must make your *annual tax period election:

                     (a)  if the tax periods applying to you are *quarterly tax periods—on or before 28 October in the *financial year to which it relates; or

                     (b)  in any other case—on or before 21 August in that financial year.

             (2)  However:

                     (a)  if:

                              (i)  during the *financial year but after 28 October in that financial year, you became eligible under section 151‑5 to make an *annual tax period election; and

                             (ii)  this subsection had not applied to you before; and

                            (iii)  your *current GST lodgment record is not more than 6 months; or

                     (b)  if the financial year started on 1 July 2004 and the Commissioner determines in writing that this paragraph applies;

you must make your election on or before the first day, after becoming eligible under section 151‑5 or after the Commissioner’s determination, on which you would, but for this Division, be required to give a *GST return to the Commissioner.

             (3)  The Commissioner may, in accordance with a request you make in the *approved form, allow you to make your election on a specified day occurring after the day provided for under subsection (1) or (2).

Note:          Refusing a request to be allowed to make an election on a specified day under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

151‑25  Duration of an annual tax period election

General rule

             (1)  Your election ceases to have effect if:

                     (a)  you revoke it by notifying the Commissioner in the *approved form; or

                     (b)  the Commissioner disallows it under subsection (3); or

                     (c)  on 31 July in a *financial year, you are *required to be registered.

Your election also ceases to have effect at the end of your tax period under subsection 27‑39(1), at the end of your concluding tax period under section 27‑40, or at the end of a tax period applying to you to which subsection 151‑55(1) applies.

Revocation

             (2)  A revocation of your election is taken to have had, or has, effect:

                     (a)  if you notify the Commissioner on or before 28 October in a financial year—from the start of that *financial year; or

                     (b)  if you notify the Commissioner after 28 October in a financial year—from the start of the next financial year.

Disallowance

             (3)  The Commissioner may disallow your election if, and only if, the Commissioner is satisfied that you have failed to comply with one or more of your obligations under a *taxation law.

Note:          Disallowing your election is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

             (4)  A disallowance of your election is taken to have had effect:

                     (a)  if the Commissioner notifies you of the disallowance during the *financial year in which your election first took effect—from the start of the tax period in which it first took effect; or

                     (b)  if the Commissioner notifies you of the disallowance on or before 28 October during a later financial year—from the start of that later financial year; or

                     (c)  if the Commissioner notifies you of the disallowance after 28 October during a later financial year—from the start of the financial year immediately following that later financial year.

Becoming subject to a requirement to register

             (5)  If paragraph (1)(c) applies, your election is taken to have ceased to have effect from the start of the *financial year referred to in that paragraph.

Subdivision 151‑BConsequences of electing to have annual tax periods

151‑40  Annual tax periods

             (1)  While an *annual tax period election that you have made has effect, each *financial year is a tax period that applies to you.

             (2)  However, if your *annual tax period election takes effect on a day that is not the start of a *financial year, the period from when your annual tax period election takes effect until the end of the financial year in which it takes effect is a tax period that applies to you.

             (3)  A tax period under this section is an annual tax period.

             (4)  This section has effect despite sections 27‑5, 27‑10 and 27‑30 (which are about tax periods).

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

             (1)  You must give your *GST return for an *annual tax period to the Commissioner:

                     (a)  if you are required under section 161 of the *ITAA 1936 to lodge a return in relation to a year of income corresponding to, or ending during, an annual tax period applying to you—within:

                              (i)  the period, specified in the instrument made under that section, for you to lodge as required under that section; or

                             (ii)  such further time as the Commissioner has permitted for you to lodge as required under that section; or

                     (b)  if paragraph (a) does not apply—on or before the 28 February following the end of the annual tax period.

Note:          Section 388‑55 in Schedule 1 to the Taxation Administration Act 1953 allows the Commissioner to defer the time for giving the GST return.

             (2)  This section has effect despite sections 31‑8 and 31‑10 (which are about when GST returns must be given).

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

             (1)  If the *assessed net amount for an *annual tax period applying to you is greater than zero, you must pay the assessed net amount to the Commissioner on or before the day on which, under section 151‑45, you are required to give to the Commissioner your *GST return for the annual tax period.

             (2)  This section has effect despite section 33‑5 (which is about when payments of assessed net amounts must be made).

151‑55  An entity’s concluding annual tax period

             (1)  If any of the following occurs:

                     (a)  an entity who is an individual dies;

                     (b)  an entity ceases to *carry on any *enterprise;

                     (c)  an entity’s *registration is cancelled;

during an *annual tax period applying to the entity, the annual tax period is not affected by the death, cessation or cancellation.

             (2)  This section has effect despite section 27‑40 (which is about an entity’s concluding tax period).

             (3)  However, this section does not affect the application of:

                     (a)  section 27‑39; or

                     (b)  if an entity for any reason ceases to exist—section 27‑40.

151‑60  The effect of incapacitation or cessation

             (1)  If an entity becomes an *incapacitated entity, or the entity for any reason ceases to exist, the entity must give the *GST return, for the *annual tax period that ends as a result, to the Commissioner:

                     (a)  on or before the 21st day of the month following the end of the annual tax period; or

                     (b)  within such further period as the Commissioner allows.

             (2)  If the *assessed net amount for the *annual tax period is greater than zero, the entity must pay the assessed net amount to the Commissioner on or before the 21st day of the month following the end of the annual tax period.

             (3)  This section has effect despite sections 151‑45 (which is about when GST returns for annual tax periods must be given) and 151‑50 (which is about when payments of assessed net amounts for annual tax periods must be made).

Division 153Agents etc. and insurance brokers

Table of Subdivisions

153‑A   General

153‑B    Principals and intermediaries as separate suppliers or acquirers

153‑1  What this Division is about

This Division sets out the rules for holding and issuing tax invoices and adjustment notes when your supplies or acquisitions are made through an agent, or when insurance is supplied through an insurance broker. It also allows in some cases a supply or acquisition made through, or facilitated by, an entity on your behalf to be treated as 2 separate supplies or acquisitions.

Subdivision 153‑AGeneral

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

             (1)  If:

                     (a)  you are entitled to the input tax credit for a *creditable acquisition made through an agent; and

                     (b)  neither you nor your agent holds a *tax invoice for the acquisition when you give to the Commissioner a *GST return for the tax period to which the input tax credit on the acquisition would otherwise be attributable;

then:

                     (c)  the input tax credit (including any part of the input tax credit) is not attributable to that tax period; and

                     (d)  the input tax credit (or the part of the input tax credit) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you or your agent holds that tax invoice.

             (2)  This section has effect despite subsection 29‑10(3) (which is about the requirement to hold a tax invoice).

153‑10  Attributing your adjustments

             (1)  If:

                     (a)  you have a *decreasing adjustment relating to a supply made by you through an agent or made to you through an agent; and

                     (b)  neither you nor your agent holds an *adjustment note or *third party adjustment note for the adjustment when you give to the Commissioner a *GST return for the tax period to which 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 the part of the adjustment) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you or your agent holds that adjustment note or third party adjustment note.

             (2)  This section has effect despite subsections 29‑20(3) (which is about the requirement to hold an adjustment note) and 134‑15(1) (which is about the requirement to hold a third party adjustment note).

153‑15  Tax invoices

             (1)  If you make a *taxable supply through an agent, an obligation to issue a *tax invoice relating to the supply:

                     (a)  arises whether the *recipient makes a request for a tax invoice to you or the agent; and

                     (b)  is complied with if either you or the agent gives the recipient a tax invoice within 28 days after the request.

             (2)  However, you and the agent must not both issue separate *tax invoices relating to the supply.

Note:          If Subdivision 153‑B is to apply to the supply, there will be an arrangement under which only your agent can issue the tax invoice: see paragraph 153‑50(1)(d).

             (3)  This section has effect despite section 29‑70 (which is about tax invoices).

153‑20  Adjustment notes

             (1)  If you have a *decreasing adjustment relating to a supply made by you through an agent or made to you through an agent, an obligation under subsection 29‑75(2) to issue an *adjustment note for the adjustment, or an obligation under subsection 134‑20(2) to issue a *third party adjustment note for the adjustment:

                     (a)  arises whether the *recipient makes a request for an adjustment note or a third party adjustment note to you or the agent; and

                     (b)  is complied with if either you or your agent gives the recipient an adjustment note or a third party adjustment note within 28 days after the request.

             (2)  However, you and the agent must not both issue separate *adjustment notes or *third party adjustment notes for the adjustment.

             (3)  This section has effect despite sections 29‑75 (which is about adjustment notes) and 134‑20 (which is about third party adjustment notes).

153‑25  Insurance supplied through insurance brokers

             (1)  If an insurer supplies an *insurance policy through an *insurance broker acting on behalf of the *recipient of the supply, this Subdivision has effect as if the supply were made through the insurance broker as an agent of the insurer.

             (2)  This section does not affect the application of this Subdivision in relation to the acquisition of the *insurance policy through the insurance broker as an agent of the *recipient.

Subdivision 153‑BPrincipals and intermediaries as separate suppliers or acquirers

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

             (1)  An entity (the principal) may, in writing, enter into an arrangement with another entity (the intermediary) under which:

                     (a)  the intermediary will, on the principal’s behalf, do any or all of the following:

                              (i)  make supplies to third parties;

                             (ii)  facilitate supplies to third parties (including by issuing *invoices relating to, or receiving *consideration for, such supplies);

                            (iii)  make acquisitions from third parties;

                            (iv)  facilitate acquisitions from third parties (including by providing consideration for such acquisitions); and

                     (b)  the kinds of supplies or acquisitions, or the kinds of supplies and acquisitions, to which the arrangement applies are specified; and

                     (c)  for the purposes of the GST law:

                              (i)  the intermediary will be treated as making the supplies to the third parties, or acquisitions from the third parties, or both; and

                             (ii)  the principal will be treated as making corresponding supplies to the intermediary, or corresponding acquisitions from the intermediary, or both; and

                     (d)  in the case of supplies to third parties:

                              (i)  the intermediary will issue to the third parties, in the intermediary’s own name, all the *tax invoices and *adjustment notes relating to those supplies; and

                             (ii)  the principal will not issue to the third parties any tax invoices and adjustment notes relating to those supplies; and

                     (e)  the arrangement ceases to have effect if the principal or the intermediary, or both of them, cease to be *registered.

             (2)  For the purposes of subsection (1), an entity can be an intermediary whether or not the entity is the agent of the principal.

153‑55  The effect of these arrangements on supplies

             (1)  A *taxable supply that the principal makes to a third party through the intermediary is taken to be a supply that is a taxable supply made by the intermediary to the third party, and not by the principal, if:

                     (a)  the supply is of a kind to which the arrangement applies; and

                     (b)  the supply is made in accordance with the arrangement; and

                     (c)  both the principal and the intermediary are *registered.

             (2)  In addition, the principal is taken to make a supply that is a *taxable supply to the intermediary. This supply is taken:

                     (a)  to be a supply of the same thing as is supplied in the taxable supply (the intermediary’s supply) that the intermediary is taken to make; and

                     (b)  to have a *value equal to 10/11 of the amount that is payable to the principal by the intermediary in respect of the intermediary’s supply.

The intermediary is taken to make a corresponding *creditable acquisition from the principal.

             (3)  If the principal pays, or is liable to pay, an amount, as a commission or similar payment, to the intermediary for the intermediary’s supply to the third party:

                     (a)  for the purpose of paragraph (2)(b), the amount payable by the intermediary to the principal is taken to be reduced by the amount the principal pays, or is liable to pay, to the intermediary; and

                     (b)  the supply by the intermediary to the principal, to which the principal’s payment or liability relates, is not a *taxable supply.

             (4)  However, this section no longer applies, and is taken never to have applied, if the principal issues to the third party, in the principal’s own name, any *tax invoice or *adjustment note relating to the supply.

          (4A)  Without limiting subsection (4), this section does not apply in relation to a supply to which section 84‑55 or section 84‑81 applies.

Note:          These sections treat an operator of an electronic distribution platform, or a goods redeliverer, as having made the supply.

             (5)  This section has effect despite section 9‑5 (which is about what are taxable supplies), section 9‑75 (which is about the value of taxable supplies) and section 11‑5 (which is about what are creditable acquisitions).

153‑60  The effect of these arrangements on acquisitions

             (1)  An acquisition that the principal makes from a third party through the intermediary is taken to be a *creditable acquisition made by the intermediary from the third party, and not by the principal, if:

                     (a)  the acquisition is of a kind to which the arrangement applies; and

                     (b)  the acquisition is made in accordance with the arrangement; and

                     (c)  both the principal and the intermediary are *registered.

             (2)  In addition, the intermediary is taken to make a supply that is a *taxable supply to the principal. This supply is taken:

                     (a)  to be a supply of the same thing as is acquired in the *creditable acquisition (the intermediary’s acquisition) that the intermediary is taken to make; and

                     (b)  to have a *value equal to 10/11 of the amount that is payable to the intermediary by the principal in respect of the intermediary’s acquisition.

The principal is taken to make a corresponding acquisition from the intermediary, and the acquisition is taken to be a creditable acquisition if, apart from this section, the principal’s acquisition from the third party would have been a creditable acquisition.

             (3)  If the principal pays, or is liable to pay, an amount, as a commission or similar payment, to the intermediary for the intermediary’s acquisition from the third party:

                     (a)  for the purpose of paragraph (2)(b), the amount payable by the principal to the intermediary is taken to be increased by the amount the principal pays, or is liable to pay, to the intermediary; and

                     (b)  the supply by the intermediary to the principal, to which the principal’s payment or liability relates, is not a *taxable supply.

          (3A)  This section does not apply in relation to an acquisition if section 84‑55 applies to the supply to which the acquisition relates.

Note:          Under section 84‑55, an inbound intangible consumer supply, or an offshore supply of low value goods, made through an electronic distribution platform (or a supply that is taken to be such a supply because of section 84‑60) is treated as having been made by the operator of the platform.

             (4)  This section has effect despite section 11‑5 (which is about what are creditable acquisitions), section 11‑10 (which is about what are acquisitions), section 9‑5 (which is about what are taxable supplies) and section 9‑75 (which is about the value of taxable supplies).

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

             (1)  The Commissioner may determine in writing that:

                     (a)  supplies of a specified kind to third parties that any entity (the intermediary) makes or facilitates (including by issuing *invoices relating to, or receiving *consideration for, such supplies) on behalf of any other entity (the principal); or

                     (b)  acquisitions of a specified kind from third parties that any entity (the intermediary) makes or facilitates (including by providing consideration for such acquisitions) on behalf of any other entity (the principal);

are taken to be supplies or acquisitions that are of a kind to which an arrangement of a kind referred to in section 153‑50 applies, and that are made in accordance with that arrangement.

             (2)  The determination has effect accordingly, unless either the intermediary or the principal notifies the other in writing, or both notify each other in writing, that:

                     (a)  any supplies to third parties that the intermediary makes or facilitates (including by issuing *invoices relating to, or receiving *consideration for, such supplies) on the principal’s behalf are not supplies to which such an arrangement applies; and

                     (b)  any acquisitions from third parties that the intermediary makes or facilitates (including by providing consideration for such acquisitions) on the principal’s behalf are not acquisitions to which such an arrangement applies.

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

156‑1  What this Division is about

Supplies and acquisitions made for a period or on a progressive basis are treated as separate supplies or acquisitions for some purposes, in particular the attribution rules.

156‑5  Attributing the GST on progressive or periodic supplies

             (1)  The GST payable by you on a *taxable supply that is made:

                     (a)  for a period or on a progressive basis; and

                     (b)  for *consideration that is to be provided on a progressive or periodic basis;

is attributable, in accordance with section 29‑5, as if each progressive or periodic component of the supply were a separate supply.

             (2)  If the progressive or periodic components of such a supply are not readily identifiable, the components correspond to the proportion of the total *consideration for the supply that the separate amounts of consideration represent.

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

             (1)  The input tax credit to which you are entitled for a *creditable acquisition that is made:

                     (a)  for a period or on a progressive basis; and

                     (b)  for *consideration that is to be provided on a progressive or periodic basis;

is attributable, in accordance with section 29‑10, as if each progressive or periodic component of the acquisition were a separate acquisition.

             (2)  If the progressive or periodic components of such an acquisition are not readily identifiable, the components correspond to the proportion of the total *consideration for the acquisition that the separate amounts of consideration represent.

156‑15  Progressive or periodic supplies partly connected with the indirect tax zone

             (1)  If:

                     (a)  a *taxable supply is made for a period or on a progressive basis; and

                     (b)  the supply is made for *consideration that is to be provided on a progressive or periodic basis; and

                     (c)  the whole of a progressive or periodic component of the supply would not be *connected with the indirect tax zone if it were a separate supply;

that component is treated as if it were a separate supply that is not connected with the indirect tax zone.

             (2)  This section has effect despite section 9‑25 (which is about when supplies are connected with the indirect tax zone) and Division 96.

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

             (1)  A supply that is made:

                     (a)  for a period or on a progressive basis; and

                     (b)  for *consideration that is to be provided on a progressive or periodic basis;

is treated, for the purposes of Division 58 (which is about representatives of incapacitated entities), as if each progressive or periodic component of the supply were a separate supply.

             (2)  An acquisition that is made:

                     (a)  for a period or on a progressive basis; and

                     (b)  for *consideration that is to be provided on a progressive or periodic basis;

is treated, for the purposes of Division 58 (which is about representatives of incapacitated entities), as if each progressive or periodic component of the acquisition were a separate acquisition.

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

                   An acquisition that is made:

                     (a)  for a period or on a progressive basis; and

                     (b)  for *consideration that is to be provided on a progressive or periodic basis;

is treated, for the purposes of Division 129 (which is about changes in the extent of creditable purpose), as if each progressive or periodic component of the acquisition were a separate acquisition.

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

                   For the purposes of this Division, a supply or acquisition by way of lease, hire or similar arrangement is to be treated as a supply or acquisition that is made on a progressive or periodic basis, for the period of the lease, hire or arrangement.

156‑23  Certain supplies or acquisitions under hire purchase agreements treated as not on progressive or periodic basis

                   For the purposes of this Division, a supply or acquisition of goods or credit under a *hire purchase agreement is treated as not being a supply or acquisition made on a progressive or periodic basis.

156‑25  Accounting on a cash basis

                   This Division (other than sections 156‑15 and 156‑17) does not apply if you *account on a cash basis.

Division 157Accounting basis of charities etc.

157‑1  What this Division is about

The choice available to an endorsed charity, gift‑deductible entity or government school to account on a cash basis is not restricted as it is for other entities, but other restrictions may apply.

157‑5  Charities etc. choosing to account on a cash basis

             (1)  An *endorsed charity, a *gift‑deductible entity or a *government school may choose to *account on a cash basis, with effect from the first day of the tax period that the endorsed charity or entity chooses.

             (3)  This section does not apply in relation to a *gift‑deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30‑120 of the ITAA 1997, unless the entity is:

                     (a)  an *endorsed charity; or

                     (b)  a *government school; or

                     (c)  a fund, authority or institution of a kind referred to in paragraph 30‑125(1)(b) of the ITAA 1997.

Note:          This subsection excludes from this section certain (but not all) gift‑deductible entities that are only endorsed for the operation of a fund, authority or institution.

             (4)  This section has effect despite section 29‑40 (which is about choosing to account on a cash basis).

157‑10  Charities etc. ceasing to account on a cash basis

             (1)  Paragraphs 29‑50(1)(a) and (ab) and subsection 29‑50(3) do not apply in relation to any *endorsed charity, any *gift‑deductible entity or any *government school.

             (3)  This section does not apply in relation to a *gift‑deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30‑120 of the ITAA 1997, unless the entity is:

                     (a)  an *endorsed charity; or

                     (b)  a *government school; or

                     (c)  a fund, authority or institution of a kind referred to in paragraph 30‑125(1)(b) of the ITAA 1997.

Note:          This subsection excludes from this section certain (but not all) gift‑deductible entities that are only endorsed for the operation of a fund, authority or institution.

Division 158Hire purchase agreements

158‑1  What this Division is about

If you account on a cash basis, you are treated as if you do not account on a cash basis for any acquisition made under a hire purchase agreement.

158‑5  Treat as not accounting on a cash basis

             (1)  This section applies if you *account on a cash basis.

             (2)  This Act and the regulations apply in relation to:

                     (a)  an acquisition you make under a *hire purchase agreement; or

                     (b)  an input tax credit to which you are entitled, or an *adjustment you have, under subsection 58‑10(1) for an acquisition made under a hire purchase agreement;

as if you do not *account on a cash basis.

Division 159Changing your accounting basis

159‑1  What this Division is about

This Division tells you to which tax periods to attribute any supplies and acquisitions that are affected by a change in your accounting basis, and how to treat bad debts if your accounting basis changes.

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

             (1)  The GST payable by you on a *taxable supply, the input tax credit to which you are entitled for a *creditable acquisition, or an *adjustment that you have, is attributable to a particular tax period (the transition tax period), and not to any other tax period, if:

                     (a)  at the start of the transition tax period, you cease to *account on a cash basis; and

                     (b)  the GST on the supply, the input tax credit on the acquisition, or the adjustment, was not attributable, to any extent, to a previous tax period during which you accounted on a cash basis; and

                     (c)  it would have been attributable to that previous tax period had you not accounted on a cash basis during that period.

For accounting on a cash basis, see Subdivision 29‑B.

Example:    In tax period A in the following diagram, you issue an invoice for a supply that you made, but you receive no payment for the supply until tax period D. However, you cease to account on a cash basis at the start of tax period C (which is therefore the transition tax period).

 

           

                   Under section 29‑5, the supply was not attributable to tax period A (because at the time you were accounting on a cash basis), but it would have been attributable to that period if you had not been accounting on a cash basis (because you issued the invoice in that period). Therefore the supply is attributable to tax period C (the transition tax period).

             (2)  This section has effect despite sections 29‑5, 29‑10 and 29‑20 (which are about attributing GST on supplies, input tax credits on acquisitions, and adjustments) and any other provisions of this Chapter.

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

             (1)  The GST payable by you on a *taxable supply, the input tax credit to which you are entitled for a *creditable acquisition, or an *adjustment that you have, is attributable to a particular tax period (the transition tax period), and not to any other tax period, if:

                     (a)  at the start of the transition tax period, you cease to *account on a cash basis; and

                     (b)  the GST on the supply, the input tax credit on the acquisition, or the adjustment, was only to some extent attributable to a previous tax period during which you accounted on a cash basis; and

                     (c)  it would have been attributable solely to that previous tax period had you not accounted on a cash basis during that period.

             (2)  However, the GST on the supply, the input tax credit on the acquisition, or the adjustment, is attributable to the transition tax period only to the extent that it has not been previously attributed to one or more of those previous tax periods.

For accounting on a cash basis, see Subdivision 29‑B.

Example:    Take the example in section 159‑5 as changed in the following diagram so that you receive part of the payment for the supply in tax period A. The transition tax period is still tax period C.

 

                   Under section 29‑5, the supply was to some extent attributable to tax period A, but it would have been attributable only to that tax period if you had not been accounting on a cash basis. Therefore the supply is attributable to tax period C (the transition tax period), but only to the extent that it is not attributable to tax period A.

             (3)  This section has effect despite sections 29‑5, 29‑10 and 29‑20 (which are about attributing GST on supplies, input tax credits on acquisitions, and adjustments) and any other provisions of this Chapter.

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

             (1)  If:

                     (a)  the GST payable by you on a *taxable supply or the input tax credit to which you are entitled for a *creditable acquisition is attributable to a particular tax period (the transition tax period) under section 159‑5 or 159‑10; and

                     (b)  before the start of the transition tax period, the whole or part of a debt relating to the *consideration for the supply or acquisition is written off as bad;

then:

                     (c)  the amount written off, and any part of that amount recovered before the start of the transition tax period, is to be treated, for the purposes of Division 21, as if at all relevant times you were not *accounting on a cash basis; and

                     (d)  any adjustment arising under Division 21 as a result is attributable to the transition tax period.

             (2)  This section has effect despite subsections 21‑5(2) and 21‑15(2) (which preclude adjustments for bad debts when accounting on a cash basis) and section 29‑20 (which is about attributing adjustments).

159‑20  Starting to account on a cash basis

             (1)  If, at the start of a tax period, you start to *account on a cash basis, then:

                     (a)  the GST payable by you on a *taxable supply that you made; or

                     (b)  the input tax credit to which you are entitled for a *creditable acquisition; or

                     (c)  an *adjustment that you have;

that was attributable to one or more previous tax periods remains attributable to those periods, and not to any other tax period.

             (2)  This section has effect despite sections 29‑5, 29‑10 and 29‑20 (which are about attributing GST on supplies, input tax credits on acquisitions, and adjustments) and any other provisions of this Chapter.

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

             (1)  If:

                     (a)  the GST payable by you on a *taxable supply, or the input tax credit to which you are entitled for a *creditable acquisition, was attributable to a tax period during which you were not *accounting on a cash basis; and

                     (b)  at a time when you are accounting on a cash basis, the whole or part of a debt relating to the *consideration for the supply or acquisition is written off as bad;

the amount written off, and any part of that amount that is recovered, is to be treated, for the purposes of Division 21, as if at all relevant times you were not accounting on a cash basis.

             (2)  This section has effect despite subsections 21‑5(2) and 21‑15(2) (which preclude adjustments for bad debts when accounting on a cash basis).

159‑30  Entities ceasing to exist or coming into existence

                   This Division does not apply in relation to an entity ceasing to *account on a cash basis as it ceases to exist, or in relation to an entity starting to account on a cash basis as it comes into existence.

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

Note:       The special rules in this Part mainly modify the operation of Part 2‑7, but they may affect other Parts of Chapter 2 in minor ways.

Division 162Payment of GST by instalments

Table of Subdivisions

162‑A   Electing to pay GST by instalments

162‑B    Consequences of electing to pay GST by instalments

162‑C    GST instalments

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

162‑1  What this Division is about

You may be able to elect to pay GST by instalments. If you do, GST returns are given to the Commissioner annually, and quarterly instalments of GST are paid on the basis of the Commissioner’s or your estimates of what your annual GST liability will be (followed by a reconciliation based on the annual GST return).

If you can average your income for income tax purposes, you only pay the last 2 quarterly instalments.

Note:          In some cases, you will only pay the last 2 quarterly instalments: see section 162‑105.

Subdivision 162‑AElecting to pay GST by instalments

162‑5  Eligibility to elect to pay GST by instalments

             (1)  You are eligible to elect to pay GST by instalments if:

                     (a)  either:

                              (i)  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 election; or

                             (ii)  you do not carry on a *business and your *GST turnover does not exceed the *instalment turnover threshold; and

                     (b)  the current tax period applying to you is not affected by:

                              (i)  an election under section 27‑10 (election of one month tax periods); or

                             (ii)  a determination under section 27‑15 (determination of one month tax periods); or

                            (iii)  a determination under section 27‑37 (special determination of tax periods on request); and

                     (c)  your *current GST lodgment record is at least 4 months; and

                     (d)  you have complied with all your obligations to give *GST returns to the Commissioner; and

                     (e)  you are not in a *net refund position; and

                      (f)  you are not a *limited registration entity.

             (2)  The instalment turnover threshold is:

                     (a)  $2 million; or

                     (b)  such higher amount as the regulations specify.

             (3)  You are in a net refund position if the sum of all your *assessed net amounts is less than zero, for the tax periods for which *GST returns fell due during the period referred to in the relevant item in the third column of this table.

 

When you are in a net refund position

Item

If your *current GST lodgment record is…

Take into account this period to work out whether you are in a net refund position:

1

at least 13 months

the 12 months preceding the current tax period applying to you

2

at least 10 months, but less than 13 months

the 9 months preceding that current tax period

3

at least 7 months, but less than 10 months

the 6 months preceding that current tax period

4

less than 7 months

the 3 months preceding that current tax period

162‑10  Your current GST lodgment record

             (1)  If you are not a *member of a *GST group, your current GST lodgment record is the period, immediately preceding the current tax period applying to you, that is covered by tax periods applying to you for which you have given *GST returns to the Commissioner.

             (2)  If you are a *member of a *GST group, your current GST lodgment record is the period, immediately preceding the current tax period applying to you, that is covered by tax periods applying to you:

                     (a)  for which you have given *GST returns to the Commissioner; and

                     (b)  during which the membership of the GST group has not changed.

             (3)  However, if you have been (but are not currently) the *representative member of a *GST group, any tax periods applying to you during which you were such a representative member are not to be counted towards your current GST lodgment record.

162‑15  Electing to pay GST by instalments

             (1)  You may, by notifying the Commissioner in the *approved form, elect to pay GST by instalments if you are eligible under section 162‑5.

             (2)  Your election takes effect from:

                     (a)  the start of the earliest tax period for which, on the day on which you make your election, your *GST return is not yet due; or

                     (b)  the start of such other tax period as the Commissioner allows, in accordance with a request you make in the *approved form.

Note:          Refusing a request to allow your election to take effect from the start of another tax period is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

162‑20  Elections by representative members of GST groups

             (1)  A *representative member of a *GST group cannot elect to pay GST by instalments unless each *member of the GST group is eligible under section 162‑5.

             (2)  If the *representative member makes such an election, the *instalment tax period applying to the representative member also applies to each member. However, the members other than the representative member are not *GST instalment payers.

162‑25  When you must make your election

             (1)  You must make your election on or before 28 October in the *financial year to which it relates.

             (2)  However, if:

                     (a)  during the *financial year but after 28 October in that financial year, you became eligible under section 162‑5 to elect to pay GST by instalments; and

                     (b)  this subsection had not applied to you before; and

                     (c)  your *current GST lodgment record is not more than 6 months;

you must make your election on or before the first day, after becoming eligible under section 162‑5, on which you would, but for this Division, be required under section 31‑8 to give a *GST return to the Commissioner.

             (3)  The Commissioner may, in accordance with a request you make in the *approved form, allow you to make your election on a specified day occurring after the day provided for under subsection (1) or (2).

Note:          Refusing a request to be allowed to make an election on a specified day under this subsection is a reviewable GST decision (see Subdivision 110‑F in Schedule 1 to the Taxation Administration Act 1953).

162‑30  Duration of your election

General rule

             (1)  Your election ceases to have effect if:

                     (a)  you revoke it, by notifying the Commissioner in the *approved form; or

                     (b)  the Commissioner disallows it under subsection (3); or

                     (c)  in a case to which subparagraph 162‑5(1)(a)(i) applied—you are not a *small business entity of the kind referred to in that subparagraph for an *income year; or

                    (ca)  in a case to which subparagraph 162‑5(1)(a)(ii) applied—on 31 July in a *financial year, you do not satisfy the requirements of that subparagraph; or

                     (d)  during a financial year, you become a *limited registration entity; or

                     (e)  in a case where you are the *representative member of a *GST group—the membership of the GST group changes.

Your election also ceases to have effect at the end of your tax period under subsection 27‑39(1), at the end of your concluding tax period under section 27‑40, or at the end of a tax period applying to you to which subsection 162‑85(1) applies.

Revocation

             (2)  A revocation of your election is taken to have had, or has, effect:

                     (a)  if you notify the Commissioner on or before 28 October in a *financial year—from the start of that financial year; or

                     (b)  if you notify the Commissioner after 28 October in a financial year—from the start of the next financial year.