A New Tax System (Goods and Services Tax) Act 1999
- C2005C00273
Superseded | View Series
Act No. 55 of 1999 as amended, taking into account amendments up to Act No. 41 of 2005
An Act about a goods and services tax to implement A New Tax System, and for related purposes
Administered by: Treasury
Prepared 08 Apr 2005 by OLDP
Prepared 08 Apr 2005
Registered 13 Apr 2005
Start Date 01 Apr 2005
End Date 30 Jun 2005
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A New Tax System (Goods and Services Tax) Act 1999

Act No. 55 of 1999 as amended

This compilation was prepared on 8 April 2005
taking into account amendments up to Act No. 41 of 2005

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

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

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑Generals Department, Canberra


Contents

Chapter 1Introduction 1

Part 1‑1Preliminary 1

Division 1Preliminary 1

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

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

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

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

Part 1‑2Using this Act 2

Division 2Overview of the GST legislation 2

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

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

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

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

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

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

2‑30....... Administration, collection and recovery provisions (Part VI of the Taxation Administration Act 1953) 3

Division 3Defined terms 4

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

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

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

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

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

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

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

Chapter 2The basic rules 7

Division 5Introduction 7

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

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

Part 2‑1The central provisions 9

Division 7The central provisions 9

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

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

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

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

Part 2‑2Supplies and acquisitions 10

Division 9Taxable supplies 10

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

Subdivision 9‑AWhat are taxable supplies? 10

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

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

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

9‑20....... Enterprises........................................................................................ 12

9‑25....... Supplies connected with Australia................................................... 14

9‑30....... Supplies that are GST‑free or input taxed........................................ 15

9‑39....... Special rules relating to taxable supplies.......................................... 16

Subdivision 9‑BWho is liable for GST on taxable supplies? 17

9‑40....... Liability for GST on taxable supplies.............................................. 17

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

Subdivision 9‑CHow much GST is payable on taxable supplies? 18

9‑70....... The amount of GST on taxable supplies.......................................... 18

9‑75....... The value of taxable supplies........................................................... 18

9‑80....... The value of taxable supplies that are partly GST‑free or input taxed 20

9‑85....... Value of taxable supplies to be expressed in Australian currency.... 20

9‑90....... Rounding of amounts of GST........................................................... 21

9‑99....... Special rules relating to the amount of GST on taxable supplies..... 22

Division 11Creditable acquisitions 24

11‑1....... What this Division is about.............................................................. 24

11‑5....... What is a creditable acquisition?....................................................... 24

11‑10..... Meaning of acquisition..................................................................... 24

11‑15..... Meaning of creditable purpose......................................................... 25

11‑20..... Who is entitled to input tax credits for creditable acquisitions?....... 26

11‑25..... How much are the input tax credits for creditable acquisitions?...... 26

11‑30..... Acquisitions that are partly creditable............................................. 26

11‑99..... Special rules relating to acquisitions................................................. 27

Part 2‑3Importations 29

Division 13Taxable importations 29

13‑1....... What this Division is about.............................................................. 29

13‑5....... What are taxable importations?........................................................ 29

13‑10..... Meaning of non‑taxable importation................................................ 29

13‑15..... Who is liable for GST on taxable importations?............................... 30

13‑20..... How much GST is payable on taxable importations?...................... 30

13‑25..... The value of taxable importations that are partly non‑taxable importations 31

13‑99..... Special rules relating to taxable importations................................... 31

Division 15Creditable importations 32

15‑1....... What this Division is about.............................................................. 32

15‑5....... What are creditable importations?.................................................... 32

15‑10..... Meaning of creditable purpose......................................................... 32

15‑15..... Who is entitled to input tax credits for creditable importations?..... 33

15‑20..... How much are the input tax credits for creditable importations?.... 33

15‑25..... Importations that are partly creditable............................................. 33

15‑99..... Special rules relating to creditable importations............................... 34

Part 2‑4Net amounts and adjustments 35

Division 17Net amounts and adjustments 35

17‑1....... What this Division is about.............................................................. 35

17‑5....... Net amounts..................................................................................... 35

17‑10..... Adjustments..................................................................................... 36

17‑15..... Working out net amounts using approved forms............................. 36

17‑20..... Determinations relating to how to work out net amounts................ 36

17‑99..... Special rules relating to net amounts or adjustments........................ 37

Division 19Adjustment events 39

19‑1....... What this Division is about.............................................................. 39

19‑5....... Explanation of the effect of adjustment events................................ 39

Subdivision 19‑AAdjustment events 40

19‑10..... Adjustment events............................................................................ 40

Subdivision 19‑BAdjustments for supplies 41

19‑40..... Where adjustments for supplies arise............................................... 41

19‑45..... Previously attributed GST amounts................................................. 42

19‑50..... Increasing adjustments for supplies................................................. 42

19‑55..... Decreasing adjustments for supplies................................................ 42

Subdivision 19‑CAdjustments for acquisitions 42

19‑70..... Where adjustments for acquisitions arise......................................... 42

19‑75..... Previously attributed input tax credit amounts................................ 43

19‑80..... Increasing adjustments for acquisitions............................................ 43

19‑85..... Decreasing adjustments for acquisitions........................................... 44

19‑99..... Special rules relating to adjustment events....................................... 44

Division 21Bad debts 45

21‑1....... What this Division is about.............................................................. 45

21‑5....... Writing off bad debts (taxable supplies)........................................... 45

21‑10..... Recovering amounts previously written off (taxable supplies)........ 45

21‑15..... Bad debts written off (creditable acquisitions)................................. 46

21‑20..... Recovering amounts previously written off (creditable acquisitions) 46

21‑99..... Special rules relating to adjustments for bad debts........................... 47

Part 2‑5Registration 48

Division 23Who is required to be registered and who may be registered 48

23‑1....... Explanation of Division.................................................................... 48

23‑5....... Who is required to be registered....................................................... 48

23‑10..... Who may be registered..................................................................... 49

23‑15..... The registration turnover threshold.................................................. 49

23‑99..... Special rules relating to who is required to be registered or who may be registered 49

Division 25How you become registered, and how your registration can be cancelled 51

Subdivision 25‑AHow you become registered 51

25‑1....... When you must apply for registration............................................. 51

25‑5....... When the Commissioner must register you...................................... 51

25‑10..... The date of effect of your registration.............................................. 52

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

25‑49..... Special rules relating to registration.................................................. 53

Subdivision 25‑BHow your registration can be cancelled 53

25‑50..... When you must apply for cancellation of registration..................... 53

25‑55..... When the Commissioner must cancel registration............................ 54

25‑57..... When the Commissioner may cancel your registration.................... 54

25‑60..... The date of effect of your cancellation............................................. 55

25‑65..... Effect of backdating your cancellation of registration...................... 55

25‑99..... Special rules relating to cancellation of registration.......................... 56

Part 2‑6Tax periods 57

Division 27How to work out the tax periods that apply to you 57

27‑1....... What this Division is about.............................................................. 57

27‑5....... General rule3 month tax periods................................................... 57

27‑10..... Election of one month tax periods.................................................... 57

27‑15..... Determination of one month tax periods.......................................... 57

27‑20..... Withdrawing elections of one month tax periods............................. 58

27‑22..... Revoking elections of one month tax periods................................... 59

27‑25..... Revoking determinations of one month tax periods......................... 59

27‑30..... Tax periods determined by the Commissioner to take account of changes in tax periods 60

27‑35..... Changing the days on which your tax periods end........................... 60

27‑37..... Special determination of tax periods on request............................... 61

27‑38..... Revoking special determination of tax periods................................. 61

27‑40..... An entitys concluding tax period.................................................... 62

27‑99..... Special rules relating to tax periods.................................................. 63

Division 29What is attributable to tax periods 64

29‑1....... What this Division is about.............................................................. 64

Subdivision 29‑AThe attribution rules 64

29‑5....... Attributing the GST on your taxable supplies................................. 64

29‑10..... Attributing the input tax credits for your creditable acquisitions.... 65

29‑15..... Attributing the input tax credits for your creditable importations... 66

29‑20..... Attributing your adjustments........................................................... 66

29‑25..... Commissioner may determine particular attribution rules............... 67

29‑39..... Special rules relating to attribution rules.......................................... 68

Subdivision 29‑BAccounting on a cash basis 69

29‑40..... Choosing to account on a cash basis................................................. 69

29‑45..... Permission to account on a cash basis.............................................. 70

29‑50..... Ceasing to account on a cash basis................................................... 70

Subdivision 29‑CTax invoices and adjustment notes 71

29‑70..... Tax invoices...................................................................................... 71

29‑75..... Adjustment notes............................................................................. 72

29‑80..... Tax invoices and adjustment notes not required for low value transactions 73

29‑99..... Special rules relating to tax invoices and adjustment notes.............. 73

Part 2‑7Returns, payments and refunds 74

Division 31GST returns 74

31‑1....... What this Division is about.............................................................. 74

31‑5....... Who must give GST returns............................................................. 74

31‑8....... When GST returns must be givenquarterly tax periods............... 74

31‑10..... When GST returns must be givenother tax periods...................... 75

31‑15..... The form and contents of GST returns............................................ 75

31‑20..... Additional GST returns.................................................................... 76

31‑25..... Electronic lodgment of GST returns................................................. 76

31‑99..... Special rules relating to GST returns................................................ 77

Division 33Payments of GST 78

33‑1....... What this Division is about.............................................................. 78

33‑3....... When payments of net amounts must be madequarterly tax periods 78

33‑5....... When payments of net amounts must be madeother tax periods. 79

33‑10..... How payments of net amounts are made......................................... 79

33‑15..... Payments of amounts of GST on importations............................... 79

33‑99..... Special rules relating to payments of GST....................................... 80

Division 35Refunds 81

35‑1....... What this Division is about.............................................................. 81

35‑5....... Entitlement to refund........................................................................ 81

35‑10..... When entitlement arises.................................................................... 81

35‑99..... Special rules relating to refunds........................................................ 82

Part 2‑8Checklist of special rules 83

Division 37Checklist of special rules 83

37‑1....... Checklist of special rules.................................................................. 83

Chapter 3The exemptions 86

Part 3‑1Supplies that are not taxable supplies 86

Division 38GST‑free supplies 86

38‑1....... What this Division is about.............................................................. 87

Subdivision 38‑AFood 87

38‑2....... Food.................................................................................................. 87

38‑3....... Food that is not GST‑free................................................................ 87

38‑4....... Meaning of food................................................................................ 88

38‑5....... Premises used in supplying food...................................................... 88

38‑6....... Packaging of food.............................................................................. 89

Subdivision 38‑BHealth 89

38‑7....... Medical services............................................................................... 89

38‑10..... Other health services........................................................................ 90

38‑15..... Other government funded health services......................................... 91

38‑20..... Hospital treatment............................................................................ 92

38‑25..... Residential care etc........................................................................... 92

38‑30..... Community care etc.......................................................................... 94

38‑35..... Flexible care...................................................................................... 95

38‑40..... Specialist disability services............................................................. 95

38‑45..... Medical aids and appliances............................................................. 95

38‑47..... Other GST‑free health goods............................................................ 96

38‑50..... Drugs and medicinal preparations etc............................................... 96

38‑55..... Private health insurance etc.............................................................. 98

Subdivision 38‑CEducation 98

38‑85..... Education courses............................................................................. 98

38‑90..... Excursions or field trips.................................................................... 98

38‑95..... Course materials............................................................................... 99

38‑97..... Lease etc. of curriculum related goods.............................................. 99

38‑100... Supplies that are not GST‑free......................................................... 99

38‑105... Accommodation at boarding schools etc.......................................... 99

38‑110... Recognition of prior learning etc..................................................... 100

Subdivision 38‑DChild care 101

38‑140... Child careregistered carers under the family assistance law....... 101

38‑145... Child careapproved child care services under the family assistance law 101

38‑150... Other child care............................................................................... 101

38‑155... Supplies directly related to child care that is GST‑free.................. 101

Subdivision 38‑EExports and other supplies for consumption outside Australia 102

38‑185... Exports of goods............................................................................. 102

38‑187... Lease etc. of goods for use outside Australia................................. 104

38‑188... Tooling used by non‑residents to manufacture goods for export... 104

38‑190... Supplies of things, other than goods or real property, for consumption outside Australia 105

Subdivision 38‑FReligious services 107

38‑220... Religious services............................................................................ 107

Subdivision 38‑GActivities of charitable institutions etc. 107

38‑250... Nominal consideration etc.............................................................. 107

38‑255... Second‑hand goods......................................................................... 107

38‑260... Supplies of retirement village accommodation etc.......................... 108

38‑270... Raffles and bingo conducted by charitable institutions etc............ 108

Subdivision 38‑IWater, sewerage and drainage 109

38‑285... Water.............................................................................................. 109

38‑290... Sewerage and sewerage‑like services............................................... 109

38‑295... Emptying of septic tanks............................................................... 109

38‑300... Drainage.......................................................................................... 109

Subdivision 38‑JSupplies of going concerns 110

38‑325... Supply of a going concern.............................................................. 110

Subdivision 38‑KTransport and related matters 110

38‑355... Supplies of transport and related matters...................................... 110

38‑360... Travel agents arranging overseas supplies...................................... 112

Subdivision 38‑LPrecious metals 112

38‑385... Supplies of precious metals............................................................ 112

Subdivision 38‑MSupplies through inwards duty free shops 113

38‑415... Supplies through inwards duty free shops..................................... 113

Subdivision 38‑NGrants of land by governments 113

38‑445... Grants of freehold and similar interests by governments............... 113

38‑450... Leases preceding grants of freehold and similar interests by governments 114

Subdivision 38‑OFarm land 114

38‑475... Subdivided farm land...................................................................... 114

38‑480... Farm land supplied for farming...................................................... 115

Subdivision 38‑PCars for use by disabled people 115

38‑505... Disabled veterans............................................................................ 115

38‑510... Other disabled people..................................................................... 116

Subdivision 38‑QInternational mail 117

38‑540... International mail............................................................................ 117

Division 40Input taxed supplies 118

40‑1....... What this Division is about............................................................ 118

Subdivision 40‑AFinancial supplies 118

40‑5....... Financial supplies........................................................................... 118

Subdivision 40‑BResidential rent 119

40‑35..... Residential rent............................................................................... 119

Subdivision 40‑CResidential premises 120

40‑65..... Sales of residential premises........................................................... 120

40‑70..... Supplies of residential premises by way of long‑term lease.......... 120

40‑75..... Meaning of new residential premises............................................. 120

Subdivision 40‑DPrecious metals 121

40‑100... Precious metals............................................................................... 121

Subdivision 40‑ESchool tuckshops and canteens 121

40‑130... School tuckshops and canteens...................................................... 121

Subdivision 40‑FFund‑raising events conducted by charitable institutions etc. 122

40‑160... Fund‑raising events conducted by charitable institutions etc......... 122

40‑165... Meaning of fund‑raising event........................................................ 122

Part 3‑2Non‑taxable importations 124

Division 42Non‑taxable importations 124

42‑1....... What this Division is about............................................................ 124

42‑5....... Non‑taxable importationsSchedule 4 to the Customs Tariff Act 1995 124

42‑10..... Goods returned to Australia in an unaltered condition................... 125

Chapter 4The special rules 126

Division 45Introduction 126

45‑1....... What this Chapter is about............................................................. 126

45‑5....... The effect of special rules............................................................... 126

Part 4‑1Special rules mainly about particular ways entities are organised 127

Division 48GST groups 127

48‑1....... What this Division is about............................................................ 127

Subdivision 48‑AApproval of GST groups 128

48‑5....... Approval of GST groups............................................................... 128

48‑10..... Membership requirements of a GST group.................................... 128

48‑15..... Relationship of companies and non‑companies in a GST group.... 129

Subdivision 48‑BConsequences of approval of GST groups 131

48‑40..... Who is liable for GST..................................................................... 131

48‑45..... Who is entitled to input tax credits................................................ 132

48‑50..... Adjustments................................................................................... 132

48‑55..... GST groups treated as single entities for certain purposes............ 133

48‑60..... GST returns.................................................................................... 133

Subdivision 48‑CAdministrative matters 133

48‑70..... Changing the membership etc. of GST groups............................... 133

48‑75..... Revoking the approval of GST groups........................................... 134

48‑80..... Notification by representative members........................................ 135

48‑85..... Date of effect of approvals and revocations................................... 135

48‑90..... Notification by the Commissioner................................................. 135

Subdivision 48‑DCeasing to be a member of a GST group 136

48‑110... Adjustments after you cease to be a member of a GST group....... 136

48‑115... Changes in extent of creditable purpose after you cease to be a member of a GST group 136

Division 49GST religious groups 138

49‑1....... What this Division is about............................................................ 138

Subdivision 49‑AApproval of GST religious groups 138

49‑5....... Approval of GST religious groups................................................. 138

49‑10..... Membership requirements of a GST religious group..................... 139

Subdivision 49‑BConsequences of approval of GST religious groups 139

49‑30..... Supplies between members of GST religious groups..................... 139

49‑35..... Acquisitions between members of GST religious groups............... 139

49‑40..... Adjustment events.......................................................................... 139

49‑45..... Changes in the extent of creditable purpose................................... 140

49‑50..... GST religious groups treated as single entities for certain purposes 140

Subdivision 49‑CAdministrative matters 141

49‑70..... Changing the membership etc. of GST religious groups................. 141

49‑75..... Revoking the approval of GST religious groups............................ 141

49‑80..... Notification by principal members................................................. 142

49‑85..... Date of effect of approvals and revocations................................... 142

49‑90..... Notification by the Commissioner................................................. 143

Division 50GST treatment of religious practitioners 144

Guide to Division 50 144

50‑1....... What this Division is about............................................................ 144

50‑5....... GST treatment of religious practitioners........................................ 144

Division 51GST joint ventures 145

51‑1....... What this Division is about............................................................ 145

Subdivision 51‑AApproval of GST joint ventures 145

51‑5....... Approval of GST joint ventures.................................................... 145

51‑10..... Participation requirements of a GST joint venture......................... 146

Subdivision 51‑BConsequences of approval of GST joint ventures 146

51‑30..... Who is liable for GST..................................................................... 146

51‑35..... Who is entitled to input tax credits................................................ 147

51‑40..... Adjustments................................................................................... 147

51‑45..... Additional net amounts relating to GST joint ventures.................. 148

51‑50..... GST returns relating to GST joint ventures................................... 149

51‑52..... Consolidation of GST returns relating to GST joint ventures........ 149

51‑55..... Payments of GST relating to GST joint ventures.......................... 150

51‑60..... Refunds relating to GST joint ventures.......................................... 150

Subdivision 51‑CAdministrative matters 151

51‑70..... Changing the participants etc. of GST joint ventures.................... 151

51‑75..... Revoking the approval of GST joint ventures................................ 152

51‑80..... Notification by joint venture operators.......................................... 152

51‑85..... Date of effect of approvals and revocations................................... 153

51‑90..... Notification by the Commissioner................................................. 153

Subdivision 51‑DCeasing to be a participant in, or an operator of, a GST joint venture 153

51‑110... Adjustments after you cease to be a participant in a GST joint venture 153

51‑115... Changes in extent of creditable purpose after you cease to be a member of a GST joint venture 154

Division 54GST branches 155

54‑1....... What this Division is about............................................................ 155

Subdivision 54‑ARegistration of GST branches 155

54‑5....... Registration of GST branches......................................................... 155

54‑10..... The date of effect of registration of a GST branch......................... 156

54‑15..... GST branch registration number..................................................... 156

Subdivision 54‑BConsequences of registration of GST branches 156

54‑40..... Additional net amounts relating to GST branches.......................... 156

54‑45..... Net amounts of parent entities....................................................... 157

54‑50..... Tax invoices and adjustment notes................................................. 158

54‑55..... GST returns relating to GST branches........................................... 158

54‑60..... Payments of GST relating to GST branches.................................. 159

54‑65..... Refunds relating to GST branches.................................................. 159

Subdivision 54‑CCancellation of registration of GST branches 159

54‑70..... When an entity must apply for cancellation of registration of a GST branch 159

54‑75..... When the Commissioner must cancel registration of a GST branch 160

54‑80..... The date of effect of cancellation of registration of a GST branch. 161

54‑85..... Application of Subdivision 25‑B.................................................... 161

54‑90..... Effect on GST branches of cancelling the entitys registration...... 161

Division 57Resident agents acting for non‑residents 162

57‑1....... What this Division is about............................................................ 162

57‑5....... Who is liable for GST..................................................................... 162

57‑10..... Who is entitled to input tax credits................................................ 162

57‑15..... Adjustments................................................................................... 162

57‑20..... Resident agents are required to be registered.................................. 163

57‑25..... Cancellation of registration of a resident agent............................... 163

57‑30..... Notice of cessation of agency......................................................... 163

57‑35..... Tax periods of resident agents........................................................ 163

57‑40..... GST returns for non‑residents........................................................ 164

57‑45..... Resident agents giving GST returns................................................ 164

57‑50..... Non‑residents that belong to GST groups...................................... 165

Division 60Pre‑establishment costs 166

60‑1....... What this Division is about............................................................ 166

60‑5....... Input tax credit for acquisitions and importations before establishment 166

60‑10..... Registration etc. not needed for input tax credits........................... 166

60‑15..... Pre‑establishment acquisitions and importations........................... 167

60‑20..... Creditable purpose......................................................................... 167

60‑25..... Attributing the input tax credit for pre‑establishment acquisitions 168

60‑30..... Attributing the input tax credit for pre‑establishment importations 169

60‑35..... Application of Division 129........................................................... 169

Division 63Non‑profit sub‑entities 170

63‑1....... What this Division is about............................................................ 170

63‑5....... Entities that may choose to apply this Division............................ 170

63‑10..... Period for which a choice has effect............................................... 170

63‑15..... Consequences of choosing to apply this Division......................... 171

63‑20..... Non‑profit sub‑entities may register.............................................. 171

63‑25..... Registration turnover threshold for non‑profit sub‑entities........... 172

63‑30..... When non‑profit sub‑entities must apply for cancellation of registration 172

63‑35..... When the Commissioner must cancel registration of non‑profit sub‑entities 172

63‑40..... Effect on adjustments of becoming a non‑profit sub‑entity........... 173

63‑45..... Effect on adjustments of ceasing to be a non‑profit sub‑entity..... 173

63‑50..... Membership requirements of GST groups..................................... 174

Part 4‑2Special rules mainly about supplies and acquisitions 175

Division 66Second‑hand goods 175

66‑1....... What this Division is about............................................................ 175

Subdivision 66‑AInput tax credits for acquiring second‑hand goods 175

66‑5....... Creditable acquisitions of second‑hand goods................................ 175

66‑10..... Amounts of input tax credits for creditable acquisitions of second‑hand goods 176

66‑15..... Attributing input tax credits for creditable acquisitions of second‑hand goods 177

66‑17..... Records of creditable acquisitions of second‑hand goods............... 177

Subdivision 66‑BAcquisitions of second‑hand goods that are divided for re‑supply 179

66‑40..... Acquisitions of second‑hand goods that can be used to offset GST on future re‑supplies 179

66‑45..... Future re‑supplies that are not taxable supplies............................ 180

66‑50..... Future re‑supplies on which GST is reduced................................. 180

66‑55..... Records of acquisitions of second‑hand goods to which this Subdivision applied 181

66‑60..... Input tax credits for acquiring second‑hand goods the supply of which is not fully taxable 181

66‑65..... Total Subdivision 66‑B credit amounts and Subdivision 66‑B GST amounts 182

66‑70..... Commissioner may determine rules for applying this Subdivision 182

Division 69Non‑deductible expenses 183

69‑1....... What this Division is about............................................................ 183

Subdivision 69‑ANon‑deductible expenses generally 183

69‑5....... Non‑deductible expenses do not give rise to creditable acquisitions or creditable importations 183

69‑10..... Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars 184

Subdivision 69‑BElections for GST purposes relating to meal entertainment and entertainment facilities 186

69‑15..... What this Subdivision is about....................................................... 186

69‑20..... Effect of elections on net amounts................................................. 186

69‑25..... Election to use the 50/50 split method for meal entertainment...... 186

69‑30..... Election to use the 12 week register method for meal entertainment 187

69‑35..... Election to use the 50/50 split method for entertainment facilities 187

69‑40..... When elections take effect.............................................................. 187

69‑45..... When elections cease to have effect................................................ 188

69‑50..... Adjustment events relating to elections.......................................... 188

69‑55..... Adjustment notes not required....................................................... 190

Division 70Financial supplies (reduced credit acquisitions) 191

70‑1....... What this Division is about............................................................ 191

70‑5....... Acquisitions that attract the reduced credit.................................... 191

70‑10..... Extended meaning of creditable purpose........................................ 191

70‑15..... How much are the reduced input tax credits?................................. 192

70‑20..... Extent of creditable purpose........................................................... 192

70‑25..... Sale of reduced credit acquisitions (Division 132).......................... 193

Division 71Fringe benefits provided by input taxed suppliers 195

71‑1....... What this Division is about............................................................ 195

71‑5....... Acquisitions by input taxed suppliers to provide fringe benefits.. 195

71‑10..... Importations by input taxed suppliers to provide fringe benefits. 196

Division 72Associates 197

72‑1....... What this Division is about............................................................ 197

Subdivision 72‑ASupplies without consideration 197

72‑5....... Taxable supplies without consideration......................................... 197

72‑10..... The value of taxable supplies without consideration..................... 198

72‑15..... Attributing the GST to tax periods................................................ 198

Subdivision 72‑BAcquisitions without consideration 198

72‑40..... Creditable acquisitions without consideration................................ 198

72‑45..... The amount of the input tax credit................................................. 198

72‑50..... Attributing the input tax credit to tax periods................................ 199

Subdivision 72‑CSupplies for inadequate consideration 200

72‑70..... The value of taxable supplies for inadequate consideration........... 200

Subdivision 72‑DApplication of this Division to certain sub‑entities 200

72‑90..... GST branches................................................................................. 200

72‑92..... Non‑profit sub‑entities................................................................... 200

72‑95..... Commonwealth government entities.............................................. 201

72‑100... State or Territory government entities........................................... 201

Division 75Sale of freehold interests etc. 202

75‑1....... What this Division is about............................................................ 202

75‑5....... Choosing to apply the margin scheme............................................ 202

75‑10..... The amount of GST on taxable supplies........................................ 202

75‑15..... Subdivided land............................................................................... 204

75‑20..... Supplies under a margin scheme do not give rise to creditable acquisitions 205

75‑25..... Adjustments relating to bad debts.................................................. 205

75‑30..... Tax invoices not required for supplies of real property under the margin scheme 205

Division 78Insurance 206

78‑1....... What this Division is about............................................................ 206

Subdivision 78‑AInsurers 206

78‑5....... GST on insurance premiums is exclusive of stamp duty............... 206

78‑10..... Decreasing adjustments for settlements of insurance claims.......... 207

78‑15..... How to work out the decreasing adjustments................................ 208

78‑18..... Increasing adjustments for payments of excess under insurance policies 209

78‑20..... Settlements of insurance claims do not give rise to creditable acquisitions 210

78‑25..... Supplies in settlement of claims are not taxable supplies.............. 210

78‑30..... Acquisitions by insurers in the course of settling claims under non‑taxable policies 210

78‑35..... Taxable supplies relating to rights of subrogation.......................... 211

78‑40..... Adjustment events relating to decreasing adjustments under this Division 211

78‑42..... Adjustment events relating to increasing adjustments under section 78‑18 212

Subdivision 78‑BInsured entities etc. 212

78‑45..... Settlements of insurance claims do not give rise to taxable supplies 212

78‑50..... Settlements of insurance claims give rise to taxable supplies if entitlement to input tax credits is not disclosed 213

78‑55..... Payments of excess under insurance policies are not consideration for supplies 214

78‑60..... Supplies of goods to insurers in the course of settling claims........ 214

Subdivision 78‑CThird parties 214

78‑65..... Payments etc. to third parties by insurers..................................... 214

78‑70..... Payments etc. to third parties by insured entities.......................... 215

78‑75..... Creditable acquisitions relating to rights of subrogation................. 216

Subdivision 78‑DInsured entities that are not registered etc. 216

78‑80..... Net amounts................................................................................... 216

78‑85..... GST returns.................................................................................... 217

78‑90..... Payments of GST........................................................................... 217

Subdivision 78‑EStatutory compensation schemes 217

78‑95..... GST on premiums etc. under statutory compensation schemes is exclusive of stamp duty 217

78‑100... Settlements of claims for compensation under statutory compensation schemes 218

78‑105... Meaning of statutory compensation scheme................................... 219

Subdivision 78‑FMiscellaneous 219

78‑110... Effect of judgments and court orders.............................................. 219

78‑115... Exclusion of certain Commonwealth, State or Territory insurance schemes 220

78‑118... Portfolio transfers........................................................................... 220

78‑120... HIH rescue package........................................................................ 221

Division 79Compulsory third party schemes 223

79‑1....... What this Division is about............................................................ 223

Subdivision 79‑AModified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies 224

79‑5....... Application of sections 78‑10 and 78‑15 (about decreasing adjustments) where premium selection test is satisfied........................................................................................................ 224

79‑10..... Adjustment where operator becomes aware that correct input tax credit situation differs from basis on which premium selection test was satisfied............................................................. 225

79‑15..... Application of sections 78‑10 and 78‑15 (about decreasing adjustments) where sole operator election to use average input tax credit entitlement............................................................. 226

79‑20..... Extension of various references in Division 78 to rights of subrogation to cover other rights of recovery 228

Subdivision 79‑BExtension of Division 78 to cover certain compulsory third party scheme payments and supplies connected with, but not under, insurance policies 229

79‑25..... Meaning of CTP hybrid payment or supply.................................... 229

79‑30..... Application of Division 78............................................................. 230

Subdivision 79‑COther payments and supplies under compulsory third party schemes 230

79‑35..... Meaning of CTP compensation or ancillary payment or supply etc. 230

79‑40..... GST on CTP premiums is exclusive of stamp duty....................... 231

79‑45..... Exclusion of certain compulsory third party schemes................... 232

79‑50..... Decreasing adjustments for CTP compensation or ancillary payments or supplies 232

79‑55..... Increasing adjustments for payments of excess etc. under compulsory third party schemes 232

79‑60..... Effect of settlements and payments under compulsory third party schemes 233

79‑65..... Taxable supplies relating to recovery by operators of compulsory third party schemes 234

79‑70..... Adjustment events relating to decreasing adjustments for operators of compulsory third party schemes 234

79‑75..... Adjustment events relating to increasing adjustments under section 79‑55 235

79‑80..... Payments of excess under compulsory third party schemes are not consideration for supplies 236

79‑85..... Supplies of goods to operators in the course of settling claims..... 236

79‑90..... Effect of judgments and court orders.............................................. 236

Subdivision 79‑DCompulsory third party scheme decreasing adjustments worked out using applicable average input tax credit fraction 237

79‑95..... How to work out decreasing adjustments using the applicable average input tax credit fraction 237

79‑100... Meaning of average input tax credit fraction.................................. 239

Division 80Settlement sharing arrangements 242

80‑1....... What this Division is about............................................................ 242

Subdivision 80‑AInsurance policy settlement sharing arrangements 242

80‑5....... Meaning of insurance policy settlement sharing arrangement etc. 242

80‑10..... Effect of becoming parties to industry deeds or entering into settlement sharing arrangements 243

80‑15..... Effect of contributing operators payment..................................... 243

80‑20..... Managing operators payments or supplies................................... 244

80‑25..... Contributing operators payment................................................... 244

80‑30..... Managing operators increasing adjustment where contributing operators payment 245

80‑35..... Adjustment events relating to managing operators payment or supply 246

Subdivision 80‑BNominal defendant settlement sharing arrangements 247

80‑40..... Meaning of nominal defendant settlement sharing arrangement etc. 247

80‑45..... Nominal defendant settlement sharing arrangements to which this Subdivision applies 248

80‑50..... Effect of becoming parties to industry deeds or entering into nominal defendant settlement sharing arrangements........................................................................................................ 248

80‑55..... Effect of contributing operators payment..................................... 248

80‑60..... Managing operators payment or supply...................................... 249

80‑65..... Contributing operators payment................................................... 249

80‑70..... Managing operators increasing adjustment where contributing operators payment 249

80‑75..... Adjustment events relating to managing operators payment or supply 250

Subdivision 80‑CHybrid settlement sharing arrangements 250

80‑80..... Meaning of hybrid settlement sharing arrangement etc................. 250

80‑85..... Subdivision 80‑A to apply to hybrid settlement sharing arrangement, subject to exceptions 251

80‑90..... Subdivision 80‑B to apply to payments or supplies by managing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement 252

80‑95..... Subdivision 80‑B to apply to payments or supplies by contributing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement 252

Division 81Payments of taxes, fees and charges 254

81‑1....... What this Division is about............................................................ 254

81‑5....... Payments of taxes etc. can constitute consideration...................... 254

81‑10..... Supplies need not be connected with Australia if the consideration is the payment of tax etc. 254

Division 82Supplies in return for rights to develop land 256

82‑1....... What this Division is about............................................................ 256

82‑5....... Supplies of rights to develop land do not constitute consideration in certain cases 256

82‑10..... Supplies by Australian government agencies of rights to develop land are not for consideration 256

Division 83Non‑residents making supplies connected with Australia 258

83‑1....... What this Division is about............................................................ 258

83‑5....... Reverse charge on supplies made by non‑residents.................... 258

83‑10..... Recipients who are members of GST groups................................. 258

83‑15..... Recipients who are participants in GST joint ventures................. 259

83‑20..... The amount of GST on reverse charged supplies made by non‑residents 259

83‑25..... When non‑residents must apply for registration............................ 259

83‑30..... When the Commissioner must register non‑residents.................... 260

83‑35..... Tax invoices not required for reverse charged supplies made by non‑residents 260

Division 84Offshore supplies other than goods or real property 261

84‑1....... What this Division is about............................................................ 261

84‑5....... Intangible supplies from offshore may be taxable supplies........... 261

84‑10..... Reverse charge on offshore intangible supplies.......................... 261

84‑12..... The amount of GST on offshore intangible supplies..................... 262

84‑13..... The amount of input tax credits relating to offshore intangible supplies 262

84‑14..... Supplies relating to employee share ownership schemes............... 263

84‑15..... Transfers etc. between branches of the same entity....................... 263

Division 85Telecommunication supplies 265

85‑1....... What this Division is about............................................................ 265

85‑5....... When telecommunication supplies are connected with Australia.. 265

85‑10..... Meaning of telecommunication supply............................................ 265

Division 87Long‑term accommodation in commercial residential premises 266

87‑1....... What this Division is about............................................................ 266

87‑5....... Commercial residential premises that are predominantly for long‑term accommodation 266

87‑10..... Commercial residential premises that are not predominantly for long‑term accommodation 266

87‑15..... Meaning of commercial accommodation........................................ 267

87‑20..... Meaning of long‑term accommodation etc..................................... 267

87‑25..... Suppliers may choose not to apply this Division.......................... 268

Division 90Company amalgamations 269

90‑1....... What this Division is about............................................................ 269

90‑5....... Supplies not taxableamalgamated company registered or required to be registered 269

90‑10..... Value of taxable suppliesamalgamated company not registered or required to be registered 269

90‑15..... Acquisitions not creditableamalgamated company registered or required to be registered 270

90‑20..... Liability after amalgamation for GST on amalgamating companys supplies 270

90‑25..... Entitlement after amalgamation to input tax credits for amalgamating companys acquisitions 270

90‑30..... Adjustments................................................................................... 271

90‑35..... Amalgamating companies accounting on a cash basis..................... 271

Division 96Supplies partly connected with Australia 273

96‑1....... What this Division is about............................................................ 273

96‑5....... Supplies that are only partly connected with Australia................. 273

96‑10..... The value of the taxable components of supplies that are only partly connected with Australia 274

Division 99Deposits as security 275

99‑1....... What this Division is about............................................................ 275

99‑5....... Giving a deposit as security does not constitute consideration..... 275

99‑10..... Attributing the GST relating to deposits that are forfeited etc...... 275

Division 100Vouchers 276

100‑1..... What this Division is about............................................................ 276

100‑5..... Supplies of vouchers stating monetary value................................. 276

100‑10... Redemption of vouchers................................................................. 276

100‑15... Increasing adjustments for unredeemed vouchers........................... 277

100‑20... Vouchers supplied to non‑residents and redeemed by others in Australia 277

100‑25... Meaning of voucher........................................................................ 277

Division 102Cancelled lay‑by sales 278

102‑1..... What this Division is about............................................................ 278

102‑5..... Cancelled lay‑by sales.................................................................... 278

102‑10... Attributing GST and input tax credits............................................ 278

Division 105Supplies in satisfaction of debts 279

105‑1..... What this Division is about............................................................ 279

105‑5..... Supplies by creditors in satisfaction of debts may be taxable supplies 279

105‑10... Net amounts................................................................................... 280

105‑15... GST returns.................................................................................... 280

105‑20... Payments of GST........................................................................... 280

Division 108Valuation of taxable supplies of goods in bond 282

108‑1..... What this Division is about............................................................ 282

108‑5..... Taxable supplies of goods in bond etc............................................ 282

Division 110Income tax‑related transactions 283

110‑1..... What this Division is about............................................................ 283

110‑5..... Transfers of tax losses and net capital losses................................. 283

110‑10... Transfers of excess foreign tax credits............................................ 283

110‑15... Supplies under operation of consolidated group regime................. 283

110‑20... Tax sharing agreementsentering into agreement etc.................... 284

110‑25... Tax sharing agreementsleaving group clear of group liability..... 284

110‑30... Tax funding agreements.................................................................. 285

Division 111Reimbursement of employees etc. 287

111‑1..... What this Division is about............................................................ 287

111‑5..... Creditable acquisitions relating to reimbursements........................ 287

111‑10... Amounts of input tax credits relating to reimbursements.............. 288

111‑15... Tax invoices relating to reimbursements......................................... 289

111‑18... Application of Division to volunteers working for charitable institutions etc. 289

111‑20... Application of Division to recipients of certain withholding payments 290

111‑25... Employers paying expenses of employees etc............................... 290

111‑30... Reimbursements etc. of former or future employees etc................ 291

Division 113PAYG voluntary agreements 292

113‑1..... What this Division is about............................................................ 292

113‑5..... Supply of work or services not a taxable supply........................... 292

Part 4‑3Special rules mainly about importations 294

Division 114Importations without entry for home consumption 294

114‑1..... What this Division is about............................................................ 294

114‑5..... Importations without entry for home consumption [see Note 2].. 294

114‑10... Goods that have already been entered for home consumption etc. 296

114‑15... Payments of amounts of GST where security for payment of customs duty is forfeited 297

114‑20... Payments of amounts of GST where delivery into home consumption is authorised under section 71 of the Customs Act.................................................................................................. 297

114‑25... Warehoused goods entered for home consumption by an entity other than the importer 298

Division 117Valuation of re‑imported goods 299

117‑1..... What this Division is about............................................................ 299

117‑5..... Valuation of taxable importations of goods that were exported for repair or renovation 299

117‑10... Valuation of taxable importations of live animals that were exported 300

117‑15... Refunds of GST on certain re‑importations of live animals........... 300

Part 4‑4Special rules mainly about net amounts and adjustments 302

Division 123Simplified accounting methods for retailers 302

123‑1..... What this Division is about............................................................ 302

123‑5..... Commissioner may determine simplified accounting methods....... 302

123‑10... Choosing to apply a simplified accounting method....................... 302

123‑15... Net amounts................................................................................... 303

Division 126Gambling 304

126‑1..... What this Division is about............................................................ 304

126‑5..... Global accounting system for gambling supplies........................... 304

126‑10... Global GST amounts...................................................................... 305

126‑15... Losses carried forward.................................................................... 306

126‑20... Bad debts........................................................................................ 306

126‑25... Application of Subdivision 9‑C...................................................... 306

126‑30... Gambling supplies do not give rise to creditable acquisitions........ 306

126‑32... Repayments of gambling losses are not consideration................... 307

126‑33... Tax invoices not required for gambling supplies............................ 307

126‑35... Meaning of gambling supply and gambling event.......................... 307

Division 129Changes in the extent of creditable purpose 308

129‑1..... What this Division is about............................................................ 308

Subdivision 129‑AGeneral 308

129‑5..... Adjustments arising under this Division........................................ 308

129‑10... Adjustments do not arise under this Division for acquisitions and importations below a certain value 309

129‑15... Adjustments do not arise under this Division where there are adjustments under Division 130 309

Subdivision 129‑BAdjustment periods 310

129‑20... Adjustment periods........................................................................ 310

129‑25... Effect on adjustment periods of things being disposed of etc........ 311

Subdivision 129‑CWhen adjustments for acquisitions and importations arise 312

129‑40... Working out whether you have an adjustment............................... 312

129‑45... Gifts to gift‑deductible entities....................................................... 313

129‑50... Creditable purpose......................................................................... 314

129‑55... Meaning of apply............................................................................ 314

Subdivision 129‑DAmounts of adjustments for acquisitions and importations 314

129‑70... The amount of an increasing adjustment........................................ 314

129‑75... The amount of a decreasing adjustment.......................................... 315

129‑80... Effect of adjustment under Division 19 or 21................................ 315

Subdivision 129‑EAttributing adjustments under this Division 316

129‑90... Attributing your adjustments for changes in extent of creditable purpose 316

Division 130Goods applied solely to private or domestic use 317

130‑1..... What this Division is about............................................................ 317

130‑5..... Goods applied solely to private or domestic use........................... 317

Division 131Annual apportionment of creditable purpose 318

131‑1..... What this Division is about............................................................ 318

Subdivision 131‑AElecting to have annual apportionment 318

131‑5..... Eligibility to make an annual apportionment election.................... 318

131‑10... Making an annual apportionment election..................................... 319

131‑15... Annual apportionment elections by representative members of GST groups 319

131‑20... Duration of an annual apportionment election............................... 319

Subdivision 131‑BConsequences of electing to have annual apportionment 320

131‑40... Input tax credits for acquisitions that are partly creditable............ 320

131‑45... Input tax credits for importations that are partly creditable.......... 322

131‑50... Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars 323

131‑55... Increasing adjustments relating to annually apportioned acquisitions and importations 323

131‑60... Attributing adjustments under section 131‑55............................... 324

Division 132Supplies of things acquired etc. without full input tax credits 327

132‑1..... What this Division is about............................................................ 327

132‑5..... Decreasing adjustments for supplies of things acquired, imported or applied for a purpose that is not fully creditable........................................................................................................ 327

132‑10... Attribution of adjustments under this Division............................. 328

Division 135Supplies of going concerns 330

135‑1..... What this Division is about............................................................ 330

135‑5..... Initial adjustments for supplies of going concerns......................... 330

135‑10... Later adjustments for supplies of going concerns.......................... 331

Division 136Bad debts relating to transactions that are not taxable or creditable to the fullest extent 332

136‑1..... What this Division is about............................................................ 332

Subdivision 136‑ABad debts relating to partly taxable or creditable transactions 332

136‑5..... Adjustments relating to partly taxable supplies............................. 332

136‑10... Adjustments in relation to partly creditable acquisitions............... 333

Subdivision 136‑BBad debts relating to transactions that are taxable or creditable at less than 1/11 of the price 334

136‑30... Writing off bad debts (taxable supplies)......................................... 334

136‑35... Recovering amounts previously written off (taxable supplies)...... 335

136‑40... Bad debts written off (creditable acquisitions)............................... 336

136‑45... Recovering amounts previously written off (creditable acquisitions) 338

136‑50... Meanings of taxable at less than 1/11 of the price and creditable at less than 1/11 of the consideration 339

Division 137Stock on hand on becoming registered etc. 340

137‑1..... What this Division is about............................................................ 340

137‑5..... Adjustments for stock on hand on becoming registered etc........... 340

Division 138Cessation of registration 341

138‑1..... What this Division is about............................................................ 341

138‑5..... Adjustments for cessation of registration....................................... 341

138‑10... Attributing adjustments for cessation of registration..................... 342

138‑15... Ceasing to be registeredamounts not previously attributed....... 342

138‑17... Situations to which this Division does not apply.......................... 343

138‑20... Application of Division 129........................................................... 344

Division 139Distributions from deceased estates 345

139‑1..... What this Division is about............................................................ 345

139‑5..... Adjustments for distributions from deceased estates..................... 345

139‑10... Attributing adjustments for distributions from deceased estates... 346

139‑15... Application of Division 129........................................................... 346

Division 141Tradex scheme goods 347

141‑1..... What this Division is about............................................................ 347

141‑5..... Adjustments for applying goods contrary to the Tradex Scheme.. 347

141‑10... Meaning of tradex scheme goods etc.............................................. 348

141‑15... Attribution of adjustments under this Division............................. 348

141‑20... Application of Division 129........................................................... 348

Part 4‑5Special rules mainly about registration 349

Division 144Taxis 349

144‑1..... What this Division is about............................................................ 349

144‑5..... Requirement to register................................................................... 349

Division 147Representatives of incapacitated entities 350

147‑1..... What this Division is about............................................................ 350

147‑5..... Representatives are required to be registered................................. 350

147‑10... Cancellation of registration of a representative.............................. 350

147‑15... Notice of cessation of representation............................................. 350

147‑20... Adjustments................................................................................... 351

147‑25... Tax periods of representatives....................................................... 351

Division 149Government entities 352

149‑1..... What this Division is about............................................................ 352

149‑5..... Government entities may register................................................... 352

149‑10... Government entities are not required to be registered.................... 352

149‑15... This Act applies to registered government entities........................ 353

149‑20... Government entities not required to cancel their registration......... 353

149‑25... Membership requirements of a government GST group................ 353

Part 4‑6Special rules mainly about tax periods 354

Division 151Annual tax periods 354

151‑1..... What this Division is about............................................................ 354

Subdivision 151‑AElecting to have annual tax periods 354

151‑5..... Eligibility to make an annual tax period election............................ 354

151‑10... Making an annual tax period election............................................. 354

151‑15... Annual tax period elections by representative members of GST groups 355

151‑20... When you must make your annual tax period election................... 355

151‑25... Duration of an annual tax period election....................................... 356

Subdivision 151‑BConsequences of electing to have annual tax periods 357

151‑40... Annual tax periods.......................................................................... 357

151‑45... When GST returns for annual tax periods must be given............... 358

151‑50... When payments of net amounts for annual tax periods must be made 358

151‑55... An entitys concluding annual tax period....................................... 358

151‑60... The effect of bankruptcy, liquidation or receivership etc.............. 359

151‑65... The effect of changing the membership of GST groupsend of the annual tax period 360

151‑70... The effect of changing the membership of GST groupstax periods for the remainder of a financial year 360

Division 153Agents and insurance brokers 362

153‑1..... What this Division is about............................................................ 362

Subdivision 153‑AGeneral 362

153‑5..... Attributing the input tax credits for your creditable acquisitions.. 362

153‑10... Attributing your adjustments......................................................... 363

153‑15... Tax invoices.................................................................................... 363

153‑20... Adjustment notes........................................................................... 364

153‑25... Insurance supplied through insurance brokers............................... 364

Subdivision 153‑BPrincipals and agents as separate suppliers or acquirers 364

153‑50... Arrangements under which agents are treated as suppliers or acquirers 364

153‑55... The effect of these arrangements on supplies................................ 365

153‑60... The effect of these arrangements on acquisitions........................... 366

153‑65... Determinations that supplies or acquisitions are taken to be under these arrangements 367

Division 156Supplies and acquisitions made on a progressive or periodic basis 369

156‑1..... What this Division is about............................................................ 369

156‑5..... Attributing the GST on progressive or periodic supplies.............. 369

156‑10... Attributing the input tax credits on progressive or periodic acquisitions 369

156‑15... Progressive or periodic supplies partly connected with Australia. 370

156‑20... Application of Division 129 to progressive or periodic acquisitions 370

156‑22... Leases etc. treated as being on a progressive or periodic basis....... 370

156‑25... Accounting on a cash basis............................................................. 371

Division 159Changing your accounting basis 372

159‑1..... What this Division is about............................................................ 372

159‑5..... Ceasing to account on a cash basisamounts not previously attributed 372

159‑10... Ceasing to account on a cash basisamounts partly attributed.... 373

159‑15... Ceasing to account on a cash basisbad debts.............................. 374

159‑20... Starting to account on a cash basis................................................. 375

159‑25... Starting to account on a cash basisbad debts.............................. 375

159‑30... Entities ceasing to exist or coming into existence........................... 376

Part 4‑7Special rules mainly about returns, payments and refunds 377

Division 162Payment of GST by instalments 377

162‑1..... What this Division is about............................................................ 377

Subdivision 162‑AElecting to pay GST by instalments 377

162‑5..... Eligibility to elect to pay GST by instalments............................... 377

162‑10... Your current GST lodgment record................................................ 379

162‑15... Electing to pay GST by instalments.............................................. 379

162‑20... Elections by representative members of GST groups.................... 380

162‑25... When you must make your election............................................... 380

162‑30... Duration of your election............................................................... 381

Subdivision 162‑BConsequences of electing to pay GST by instalments 382

162‑50... GST instalment payers................................................................... 382

162‑55... Tax periods for GST instalment payers......................................... 382

162‑60... When GST returns for GST instalment payers must be given....... 383

162‑65... The form and contents of GST returns for GST instalment payers 384

162‑70... Payment of GST instalments......................................................... 384

162‑75... Giving notices relating to GST instalments.................................... 385

162‑80... Certain entities pay only 2 GST instalments for each year........... 385

162‑85... A GST instalment payers concluding tax period.......................... 386

162‑90... The effect of bankruptcy, liquidation or receivership etc.............. 387

162‑95... The effect of changing the membership of GST groups................. 387

162‑100. General interest charge on late payment......................................... 388

162‑105. Net amounts for GST instalment payers....................................... 388

162‑110. When payments of net amounts must be madeGST instalment payers 389

Subdivision 162‑CGST instalments 389

162‑130. What are your GST instalments..................................................... 389

162‑135. Notified instalment amounts.......................................................... 390

162‑140. Varied instalment amounts............................................................. 390

162‑145. Your annual GST liability............................................................... 391

Subdivision 162‑DPenalty payable in certain cases if varied instalment amounts are too low 392

162‑170. What this Subdivision is about....................................................... 392

162‑175. GST payments are less than 85% of annual GST liability............. 392

162‑180. Estimated annual GST amount is less than 85% of annual GST liability 394

162‑185. Shortfall in GST instalments worked out on the basis of estimated annual GST amount 396

162‑190. Periods for which penalty is payable............................................. 397

162‑195. Reduction in penalties if notified instalment amount is less than 25% of annual GST liability 397

162‑200. Reduction in penalties if GST instalment shortfall is made up in a later instalment 399

162‑205. This Subdivision does not create a liability for general interest charge 400

Division 165Anti‑avoidance 401

165‑1..... What this Division is about............................................................ 401

Subdivision 165‑AApplication of this Division 402

165‑5..... When does this Division operate?.................................................. 402

165‑10... When does an entity get a GST benefit from a scheme?................. 403

165‑15... Matters to be considered in determining purpose or effect............ 404

Subdivision 165‑BCommissioner may negate effects of schemes for GST benefits 405

165‑40... Commissioner may negate avoiders GST benefits........................ 405

165‑45... Commissioner may reduce an entitys net amount or GST to compensate 406

165‑50... GST or refund payable in accordance with declaration.................. 407

165‑55... Commissioner may disregard scheme in making declarations......... 407

165‑60... One declaration may cover several tax periods and importations.. 408

165‑65... Commissioner must give copy of declaration to entity affected.... 408

Subdivision 165‑CPenalties for getting GST benefits from schemes 408

Division 168Tourist refund scheme 409

168‑1..... What this Division is about............................................................ 409

168‑5..... Tourist refund scheme.................................................................... 409

Division 171Customs security etc. given on taxable importations 410

171‑1..... What this Division is about............................................................ 410

171‑5..... Security or undertaking given under section 162 or 162A of the Customs Act 410

Chapter 5Miscellaneous 412

Part 5‑1Miscellaneous 412

Division 177Miscellaneous 412

177‑1..... Commonwealth etc. not liable to pay GST.................................... 412

177‑3..... Acquisitions from State or Territory bodies where GST liability is notional 413

177‑5..... Cancellation of exemptions from GST........................................... 413

177‑10... Ministerial determinations.............................................................. 414

177‑11... Delegation by Aged Care Secretary................................................ 414

177‑12... GST implications of references to price, value etc. in other Acts.. 415

177‑15... Regulations..................................................................................... 416

Chapter 6Interpreting this Act 417

Part 6‑1Rules for interpreting this Act 417

Division 182Rules for interpreting this Act 417

182‑1..... What forms part of this Act........................................................... 417

182‑5..... What does not form part of this Act.............................................. 417

182‑10... Explanatory sections, and their role in interpreting this Act.......... 418

182‑15... Schedules 1, 2 and 3........................................................................ 418

Part 6‑2Meaning of some important concepts 419

Division 184Meaning of entity 419

184‑1..... Entities............................................................................................ 419

184‑5..... Supplies etc. by partnerships and other unincorporated bodies.... 420

Division 188Meaning of annual turnover 421

188‑1..... What this Division is about............................................................ 421

188‑5..... Explanation of the turnover thresholds.......................................... 421

188‑10... Whether your annual turnover meets, or does not exceed, a turnover threshold 422

188‑15... Current annual turnover.................................................................. 422

188‑20... Projected annual turnover............................................................... 423

188‑22... Settlements of insurance claims to be disregarded.......................... 424

188‑23... Supplies reverse charged under Division 83 not to be included in a recipients turnover 425

188‑24... Supplies to which Subdivision 153‑B applies................................ 425

188‑25... Transfer of capital assets, and termination etc. of enterprise, to be disregarded 425

188‑30... The value of non‑taxable supplies.................................................. 426

188‑32... The value of gambling supplies...................................................... 426

188‑35... The value of loans........................................................................... 426

188‑40... Supplies of employee services by overseas entities to be disregarded for the registration turnover threshold 426

Division 189Exceeding the financial acquisitions threshold 428

189‑1..... What this Division is about............................................................ 428

189‑5..... Exceeding the financial acquisitions thresholdcurrent acquisitions 428

189‑10... Exceeding the financial acquisitions thresholdfuture acquisitions 429

189‑15... Meaning of financial acquisition..................................................... 430

Division 19090% owned groups of companies 431

190‑1..... 90% owned groups......................................................................... 431

190‑5..... When a company has at least a 90% stake in another company.... 431

Part 6‑3Dictionary 432

Division 195Dictionary 432

195‑1..... Dictionary....................................................................................... 432

Schedule 1Food that is not GST‑free 471

1............ Food that is not GST‑free.............................................................. 471

2............ Prepared food, bakery products and biscuit goods........................ 473

3............ Prepared meals................................................................................ 473

4............ Candied peel................................................................................... 473

5............ Goods that are not biscuit goods.................................................... 473

Schedule 2Beverages that are GST‑free 474

2............ Tea, coffee etc................................................................................. 475

3............ Fruit and vegetable juices................................................................ 475

Schedule 3Medical aids and appliances 476

Notes 485


An Act about a goods and services tax to implement A New Tax System, and for related purposes

Chapter 1Introduction

Part 1‑1Preliminary

Division 1Preliminary

1‑1 Short title [see Note 1]

This Act may be cited as the A New Tax System (Goods and Services Tax) Act 1999.

1‑2 Commencement

(1) This Act commences on 1 July 2000.

1‑3 Commonwealth‑State financial relations

The Parliament acknowledges that the Commonwealth:

(a) will introduce legislation to provide that the revenue from the GST will be granted to the States, the Australian Capital Territory and the Northern Territory; and

(b) will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth‑State Financial Relations endorsed at the Special Premiers Conference in Canberra on 13 November 1998.

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

The *GST law binds the Crown in right of each of the States, of the Australian Capital Territory and of the Northern Territory. However, it does not make the Crown liable to be prosecuted for an offence.


 

Part 1‑2Using this Act

Division 2Overview of the GST legislation

2‑1 What this Act is about

This Act is about the GST.

It begins (in Chapter 2) with the basic rules about the GST, and then sets out in Chapter 3 the exemptions from the GST and in Chapter 4 the special rules that can apply in particular cases.

It concludes with definitions and other interpretative material.

Note: The GST is imposed by 3 Acts:

(a) the A New Tax System (Goods and Services Tax ImpositionGeneral) Act 1999; and

(b) the A New Tax System (Goods and Services Tax ImpositionCustoms) Act 1999; and

(c) the A New Tax System (Goods and Services Tax ImpositionExcise) Act 1999.

2‑5 The basic rules (Chapter 2)

Chapter 2 has the basic rules for the GST, including:

when and how the GST arises, and who is liable to pay it;

when and how input tax credits arise, and who is entitled to them;

how to work out payments and refunds of GST;

when and how the payments and refunds are to be made.

2‑10 The exemptions (Chapter 3)

Chapter 3 sets out the supplies and importations that are GST‑free or input taxed.

2‑15 The special rules (Chapter 4)

Chapter 4 has special rules which, in particular cases, have the effect of modifying the basic rules in Chapter 2.

Note: There is a checklist of special rules at the end of Chapter 2 (in Part 2‑8).

2‑20 Miscellaneous (Chapter 5)

Chapter 5 deals with miscellaneous matters.

2‑25 Interpretative provisions (Chapter 6)

Chapter 6 contains the Dictionary, which sets out a list of all the terms that are defined in this Act. It also sets out the meanings of some important concepts and rules on how to interpret this Act.

2‑30 Administration, collection and recovery provisions (Part VI of the Taxation Administration Act 1953)

Part VI of the Taxation Administration Act 1953 contains provisions relating to the administration of the GST, and to collection and recovery of amounts of GST.


 

Division 3Defined terms

3‑1 When defined terms are identified

(1) Many of the terms used in the law relating to the GST are defined.

(2) Most defined terms in this Act are identified by an asterisk appearing at the start of the term: as in *enterprise. The footnote that goes with the asterisk contains a signpost to the Dictionary definitions starting at section 195‑1.

3‑5 When terms are not identified

(1) Once a defined term has been identified by an asterisk, later occurrences of the term in the same subsection are not usually asterisked.

(2) Terms are not asterisked in the non‑operative material contained in this Act.

Note: The non‑operative material is described in Division 4.

(3) The following basic terms used throughout the Act are not identified with an asterisk.

 

Common definitions that are not asterisked

Item

This term:

1

acquisition

2

amount

3

Australia

4

Commissioner

5

entity

6

goods

7

GST

8

import

8A

individual

9

input tax credit

10

tax period

11

thing

12

supply

13

you

3‑10 Identifying the defined term in a definition

Within a definition, the defined term is identified by bold italics.


 

Division 4Status of Guides and other non‑operative material

4‑1 Non‑operative material

In addition to the operative provisions themselves, this Act contains other material to help you identify accurately and quickly the provisions that are relevant to you and to help you understand them.

This other material falls into 2 main categories.

4‑5 Explanatory sections

One category is the explanatory section in many Divisions. Under the section heading What this Division is about, a short explanation of the Division appears in boxed text.

Explanatory sections form part of this Act but are not operative provisions. In interpreting an operative provision, explanatory sections may only be considered for limited purposes. They are set out in section 182‑10.

4‑10 Other material

The other category consists of material such as notes and examples. These also form part of the Act. They are distinguished by type size from the operative provisions (except for formulas), but are not kept separate from them.


 

Chapter 2The basic rules

 

Division 5Introduction

5‑1 What this Chapter is about

This Chapter sets out the basic rules for the GST. In particular, these rules will tell you:

where liability for GST arises;

where entitlements to input tax credits arise;

how the amounts of GST and input tax credits are combined to work out the amount payable by you or to you;

when and how that amount is to be paid.

5‑5 The structure of this Chapter

The diagram on the next page shows how the basic rules in this Chapter relate to each other. It also shows their relationship with:

the exemptions (Chapter 3)these provisions exempt from the GST what would otherwise be taxable; and

the special rules (Chapter 4)these provisions modify the basic rules in particular situations, often in quite limited ways.


 

Part 2‑1The central provisions

Division 7The central provisions

7‑1 GST and input tax credits

(1) GST is payable on *taxable supplies and *taxable importations.

(2) Entitlements to input tax credits arise on *creditable acquisitions and *creditable importations.

For taxable supplies and creditable acquisitions, see Part 2‑2.

For taxable importations and creditable importations, see Part 2‑3.

7‑5 Net amounts

Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments).

For net amounts (including adjustments to net amounts), see Part 2‑4.

7‑10 Tax periods

Every entity that is *registered, or *required to be registered, has tax periods applying to it.

For registration, see Part 2‑5.

For tax periods, see Part 2‑6.

7‑15 Payments and refunds

The *net amount for a tax period is the amount that the entity must pay to the Commonwealth, or the Commonwealth must refund to the entity, in respect of the period.

For payments and refunds (and GST returns), see Part 2‑7.

Note: Refunds may be set off against your other liabilities (if any) under laws administered by the Commissioner.


 

Part 2‑2Supplies and acquisitions

Division 9Taxable supplies

Table of Subdivisions

9‑A What are taxable supplies?

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

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

9‑1 What this Division is about

GST is payable on taxable supplies. This Division defines taxable supplies, states who is liable for the GST, and describes how to work out the GST on supplies.

Subdivision 9‑AWhat are taxable supplies?

9‑5 Taxable supplies

You make a taxable supply if:

(a) you make the supply for *consideration; and

(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and

(c) the supply is *connected with Australia; and

(d) you are *registered, or *required to be registered.

However, the supply is not a *taxable supply to the extent that it is *GST‑free or *input taxed.

9‑10 Meaning of supply

(1) A supply is any form of supply whatsoever.

(2) Without limiting subsection (1), supply includes any of these:

(a) a supply of goods;

(b) a supply of services;

(c) a provision of advice or information;

(d) a grant, assignment or surrender of *real property;

(e) a creation, grant, transfer, assignment or surrender of any right;

(f) a *financial supply;

(g) an entry into, or release from, an obligation:

(i) to do anything; or

(ii) to refrain from an act; or

(iii) to tolerate an act or situation;

(h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

(3) It does not matter whether it is lawful to do, to refrain from doing or to tolerate the act or situation constituting the supply.

(3A) For the avoidance of doubt, the delivery of:

(a) livestock for slaughtering or processing into *food; or

(b) game for processing into *food;

under an arrangement under which the entity making the delivery only relinquishes title after food has been produced, is the supply of the livestock or game (regardless of when the entity relinquishes title). The supply does not take place on or after the subsequent relinquishment of title.

(4) However, a supply does not include a supply of *money unless the money is provided as *consideration for a supply that is a supply of money.

9‑15 Consideration

(1) Consideration includes:

(a) any payment, or any act or forbearance, in connection with a supply of anything; and

(b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything.

(2) It does not matter whether the payment, act or forbearance was voluntary, or whether it was by the *recipient of the supply.

(2A) It does not matter:

(a) whether the payment, act or forbearance was in compliance with an order of a court, or of a tribunal or other body that has the power to make orders; or

(b) whether the payment, act or forbearance was in compliance with a settlement relating to proceedings before a court, or before a tribunal or other body that has the power to make orders.

(2B) For the avoidance of doubt, the fact that the supplier is an entity of which the *recipient of the supply is a member, or that the supplier is an entity that only makes supplies to its members, does not prevent the payment, act or forbearance from being consideration.

(3) However:

(a) if a right or option to acquire a thing is granted, then:

(i) the consideration for the supply of the thing on the exercise of the right or option is limited to any additional consideration provided either for the supply or in connection with the exercise of the right or option; or

(ii) if there is no such additional considerationthere is no consideration for the supply; and

(b) making a gift to a non‑profit body is not the provision of consideration; and

(c) a payment made by a *government related entity to another government related entity is not the provision of consideration if the payment is specifically covered by an appropriation under an *Australian law.

9‑20 Enterprises

(1) An enterprise is an activity, or series of activities, done:

(a) in the form of a *business; or

(b) in the form of an adventure or concern in the nature of trade; or

(c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or

(d) by the trustee of a fund that is covered by, or by an authority or institution that is covered by, Subdivision 30‑B of the Income Tax Assessment Act 1997 and to which deductible gifts can be made; or

(da) by a trustee of a *complying superannuation fund or, if there is no trustee of the fund, by a person who manages the fund; or

(e) by a charitable institution or by a trustee of a charitable fund; or

(f) by a religious institution; or

(g) by the Commonwealth, a State or a Territory, or by a body corporate, or corporation sole, established for a public purpose by or under a law of the Commonwealth, a State or a Territory.

(2) However, enterprise does not include an activity, or series of activities, done:

(a) by a person as an employee or in connection with earning *withholding payments covered by subsection (4) (unless the activity or series is done in supplying services as the holder of an office that the person has accepted in the course of or in connection with an activity or series of activities of a kind mentioned in subsection (1)); or

Note: Acts done as mentioned in paragraph (a) will still form part of the activities of the enterprise to which the person provides work or services.

(b) as a private recreational pursuit or hobby; or

(c) by an individual (other than a trustee of a charitable fund), or a *partnership (all or most of the members of which are individuals), without a reasonable expectation of profit or gain; or

(d) as a member of a local governing body established by or under a *State law or *Territory law (except a local governing body to which subsection 12‑45(3) in Schedule 1 to the Taxation Administration Act 1953 applies).

(3) For the avoidance of doubt, the fact that activities of an entity are limited to making supplies to members of the entity does not prevent those activities:

(a) being in the form of a *business within the meaning of paragraph (1)(a); or

(b) being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b).

(4) This subsection covers a *withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table.

 

Withholding payments covered

Item

Provision

Subject matter

1              

Section 12‑35

Payment to employee

2              

Section 12‑40

Payment to company director

3              

Section 12‑45

Payment to office holder

4              

Section 12‑60

Payment under labour hire arrangement, or specified by regulations

9‑25 Supplies connected with Australia

Supplies of goods wholly within Australia

(1) A supply of goods is connected with Australia if the goods are delivered, or made available, in Australia to the *recipient of the supply.

Supplies of goods from Australia

(2) A supply of goods that involves the goods being removed from Australia is connected with Australia.

Supplies of goods to Australia

(3) A supply of goods that involves the goods being brought to Australia is connected with Australia if the supplier either:

(a) imports the goods into Australia; or

(b) installs or assembles the goods in Australia.

Supplies of real property

(4) A supply of *real property is connected with Australia if the real property, or the land to which the real property relates, is in Australia.

Supplies of anything else

(5) A supply of anything other than goods or *real property is connected with Australia if either:

(a) the thing is done in Australia; or

(b) the supplier makes the supply through an *enterprise that the supplier *carries on in Australia.

When enterprises are carried on in Australia

(6) An *enterprise is carried on in Australia if the enterprise is carried on through:

(a) a permanent establishment (as defined in subsection 6(1) of the Income Tax Assessment Act 1936); or

(b) a place that would be such a permanent establishment if paragraph (e), (f) or (g) of that definition did not apply.

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

GST‑free

(1) A supply is GST‑free if:

(a) it is GST‑free under Division 38 or under a provision of another Act; or

(b) it is a supply of a right to receive a supply that would be GST‑free under paragraph (a).

Input taxed

(2) A supply is input taxed if:

(a) it is input taxed under Division 40 or under a provision of another Act; or

(b) it is a supply of a right to receive a supply that would be input taxed under paragraph (a).

Note: If a supply is input taxed, there is no entitlement to an input tax credit for the things that are acquired or imported to make the supply (see sections 11‑15 and 15‑10).

Supplies that would be both GST‑free and input taxed

(3) To the extent that a supply would, apart from this subsection, be both *GST‑free and *input taxed:

(a) the supply is GST‑free and not input taxed, unless the provision under which it is input taxed requires the supplier to have chosen for its supplies of that kind to be input taxed; or

(b) the supply is input taxed and not GST‑free, if that provision requires the supplier to have so chosen.

Note: Subdivisions 40‑E (School tuckshops and canteens) and 40‑F (Fund‑raising events conducted by charitable institutions etc.) require such a choice.)

Supply of things used solely in connection with making supplies that are input taxed but not financial supplies

(4) A supply is taken to be a supply that is *input taxed if it is a supply of anything (other than *new residential premises) that you have used solely in connection with your supplies that are input taxed but are not *financial supplies.

9‑39 Special rules relating to taxable supplies

Chapter 4 contains special rules relating to taxable supplies, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1

Associates

Division 72

2

Cancelled lay‑by sales

Division 102

3

Company amalgamations

Division 90

3A

Compulsory third party schemes

Division 79

4

Deposits as security

Division 99

5

Gambling

Division 126

5A

GST religious groups

Division 49

5B

Income tax‑related transactions

Division 110

6

Insurance

Division 78

7

Offshore supplies other than goods or real property

Division 84

8

Payments of taxes, fees and charges

Division 81

8A

Second‑hand goods

Division 66

8B

Settlement sharing arrangements

Division 80

9

Supplies and acquisitions made on a progressive or periodic basis

Division 156

9A

Supplies in return for rights to develop land

Division 82

10

Supplies in satisfaction of debts

Division 105

11

Supplies partly connected with Australia

Division 96

12

Supply under arrangement covered by PAYG voluntary agreement

Division 113

13

Telecommunication supplies

Division 85

14

Vouchers

Division 100

 

Subdivision 9‑BWho is liable for GST on taxable supplies?

9‑40 Liability for GST on taxable supplies

You must pay the GST payable on any *taxable supply that you make.

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

Chapter 4 contains special rules relating to liability for GST on taxable supplies, as follows:

 

Checklist of special rules

 

Item

For this case ...

See:

1

Company amalgamations

Division 90

2

GST groups

Division 48

3

GST joint ventures

Division 51

4

Offshore supplies other than goods or real property

Division 84

4A

Non‑residents making supplies connected with Australia

Division 83

5

Resident agents acting for non‑residents

Division 57

Subdivision 9‑CHow much GST is payable on taxable supplies?

9‑70 The amount of GST on taxable supplies

The amount of GST on a *taxable supply is 10% of the *value of the taxable supply.

9‑75 The value of taxable supplies

(1) The value of a *taxable supply is as follows:

where:

price is the sum of:

(a) so far as the *consideration for the supply is consideration expressed as an amount of *moneythe amount (without any discount for the amount of GST (if any) payable on the supply); and

(b) so far as the consideration is not consideration expressed as an amount of moneythe *GST inclusive market value of that consideration.

Example: You make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise.

The value of the supply is:

The GST on the supply is therefore $2,000 (i.e. 10% of $20,000).

(2) However, if the taxable supply is of a *luxury car, the value of the taxable supply is as follows:

where:

luxury car tax value has the meaning given by section 5‑20 of the A New Tax System (Luxury Car Tax) Act 1999.

(3) In working out under subsection (1) the value of a *taxable supply made in a *tax period, being a supply that is a *fringe benefit, the price is taken to be the sum of:

(a) to the extent that, apart from this subsection, paragraph (a) of the definition of price in subsection (1) would be applicable:

(i) if the fringe benefit is a car fringe benefitso much of the amount that would be worked out under that paragraph as represented the *recipients payment made in that period; or

(ii) if the fringe benefit is a benefit other than a car fringe benefitso much of the amount that would be worked out under that paragraph as represented the *recipients contribution made in that period; and

(b) to the extent that, apart from this subsection, paragraph (b) of the definition of price in subsection (1) would be applicable:

(i) if the fringe benefit is a car fringe benefitso much of the amount that would be worked out under that paragraph as represented the recipients payment made in that period; or

(ii) if the fringe benefit is a benefit other than a car fringe benefitso much of the amount that would be worked out under that paragraph as represented the recipients contribution made in that period.

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

(1) If a supply (the actual supply) is:

(a) partly a *taxable supply; and

(b) partly a supply that is *GST‑free or *input taxed;

the value of the part of the actual supply that is a taxable supply is the proportion of the value of the actual supply that the taxable supply represents.

(2) The value of the actual supply, for the purposes of subsection (1), is as follows:

where:

taxable proportion is the proportion of the value of the actual supply that represents the value of the *taxable supply (expressed as a number between 0 and 1).

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

(1) For the purposes of this Act, the *value of a *taxable supply is to be expressed in Australian currency.

(2) In working out the *value of a *taxable supply, any amount of the *consideration for the supply that is expressed in a currency other than Australian currency is to be treated as if it were an amount of Australian currency worked out in the manner determined by the Commissioner.

9‑90 Rounding of amounts of GST

One taxable supply recorded on an invoice

(1) If the amount of GST on a *taxable supply that is the only taxable supply recorded on a particular *invoice would, apart from this section, be an amount that includes a fraction of a cent, the amount of GST is rounded to the nearest cent (rounding 0.5 cents upwards).

Several taxable supplies recorded on an invoice

(2) If 2 or more *taxable supplies are recorded on the same *invoice, the total amount of GST on the supplies is:

(a) what would be the amount of GST if it were worked out by:

(i) working out the GST on each of the supplies (without rounding the amounts to the nearest cent); and

(ii) adding the amounts together and, if the total is an amount that includes a fraction of a cent, rounding it to the nearest cent (rounding 0.5 cents upwards); or

(b) the amount worked out using the following method statement:

Method statement

Step 1. Work out, for each *taxable supply, what would, apart from this section, be the amount of GST on the supply.

Step 2. If the amount for the supply has more decimal places than the number of decimal places allowed by the accounting system used to work out the amount, round the amount (up or down as appropriate) to that number of decimal places.

Note: Subsection (4) gives further details of this rounding.

Step 3. Work out the sum of the amounts worked out under step 1 and (if applicable) step 2 for each supply.

Step 4. If the sum under step 3 includes a fraction of a cent, round the sum to the nearest cent (rounding 0.5 cents upwards).

(3) Whether to use paragraph (2)(a) or paragraph (2)(b) to work out the total amount of GST on the supplies is a matter of choice for:

(a) the supplier if the amount is being worked out to ascertain the suppliers liability for GST; or

(b) the *recipient of the supplies if the amount is being worked out to ascertain the recipients entitlement to input tax credits.

(4) In applying step 2 of the method statement in subsection (2), if:

(a) the number of decimal places in the amount for the supply exceeds by one decimal place the number of decimal places allowed by the accounting system used to work out the amount; and

(b) the last digit of the amount (before rounding) is 5;

the amount is rounded upwards to that number of decimal places.

Taxable supplies divided into items

(5) If one or more *taxable supplies recorded on the same *invoice are divided into 2 or more items:

(a) subsection (1) does not apply; and

(b) subsection (2) applies as if each such item represented a separate taxable supply.

Taxable supplies recorded on documents other than invoices

(6) If one or more *taxable supplies, none of which are recorded on an *invoice, are recorded on a document that is not an invoice, this section applies as if the document were an invoice.

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

Chapter 4 contains special rules relating to the amount of GST on taxable supplies, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1

Associates

Division 72

2

Company amalgamations

Division 90

2A

Compulsory third party schemes

Division 79

3

Gambling

Division 126

4

Long‑term accommodation in commercial residential premises

Division 87

4AA

Non‑residents making supplies connected with Australia

Division 83

4A

Offshore supplies other than goods or real property

Division 84

5

Sale of freehold interests etc.

Division 75

7

Supplies partly connected with Australia

Division 96

8

Transactions relating to insurance policies

Division 78

9

Valuation of taxable supplies of goods in bond

Division 108

 


 

Division 11Creditable acquisitions

11‑1 What this Division is about

You are entitled to input tax credits for your creditable acquisitions. This Division defines creditable acquisitions, states who is entitled to the input tax credits and describes how to work out the input tax credits on acquisitions.

11‑5 What is a creditable acquisition?

You make a creditable acquisition if:

(a) you acquire anything solely or partly for a *creditable purpose; and

(b) the supply of the thing to you is a *taxable supply; and

(c) you provide, or are liable to provide, *consideration for the supply; and

(d) you are *registered, or *required to be registered.

11‑10 Meaning of acquisition

(1) An acquisition is any form of acquisition whatsoever.

(2) Without limiting subsection (1), acquisition includes any of these:

(a) an acquisition of goods;

(b) an acquisition of services;

(c) a receipt of advice or information;

(d) an acceptance of a grant, assignment or surrender of *real property;

(e) an acceptance of a grant, transfer, assignment or surrender of any right;

(f) an acquisition of something the supply of which is a *financial supply;

(g) an acquisition of a right to require another person:

(i) to do anything; or

(ii) to refrain from an act; or

(iii) to tolerate an act or situation;

(h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g).

(3) However, an acquisition does not include an acquisition of *money unless the money is provided as *consideration for a supply that is a supply of money.

11‑15 Meaning of creditable purpose

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

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

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

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

(3) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia.

(4) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if:

(a) the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and

(b) you do not *exceed the financial acquisitions threshold.

(5) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that:

(a) the acquisition relates to making a *financial supply consisting of a borrowing; and

(b) the borrowing relates to you making supplies that are not input taxed.

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

You are entitled to the input tax credit for any *creditable acquisition that you make.

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

The amount of the input tax credit for a *creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired. However, the amount of the input tax credit is reduced if the acquisition is only *partly creditable.

11‑30 Acquisitions that are partly creditable

(1) An acquisition that you make is partly creditable if it is a *creditable acquisition to which one or both of the following apply:

(a) you make the acquisition only partly for a *creditable purpose;

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

(3) The amount of the input tax credit on an acquisition that you make that is *partly creditable is as follows:

where:

extent of consideration is the extent to which you provide, or are liable to provide, the *consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition.

extent of creditable purpose is the extent to which the *creditable acquisition is for a *creditable purpose, expressed as a percentage of the total purpose of the acquisition.

full input tax credit is what would have been the amount of the input tax credit for the acquisition if it had been made solely for a creditable purpose and you had provided, or had been liable to provide, all of the consideration for the acquisition.

(4) For the purpose of working out the extent of the *consideration, so far as the consideration is not expressed as an amount of *money, take into account the *GST inclusive market value of the consideration.

(5) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which a *creditable acquisition is for a *creditable purpose.

11‑99 Special rules relating to acquisitions

Chapter 4 contains special rules relating to acquisitions, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Agents and insurance brokers

Division 153

1B

Annual apportionment of creditable purpose

Division 131

1

Associates

Division 72

2

Company amalgamations

Division 90

2A

Compulsory third party schemes

Division 79

3

Financial supplies (reduced credit acquisitions)

Division 70

3A

Fringe benefits provided by input taxed suppliers

Division 71

4

Gambling

Division 126

5

GST groups

Division 48

6

GST joint ventures

Division 51

6A

GST religious groups

Division 49

7

Insurance

Division 78

8

Non‑deductible expenses

Division 69

8A

Offshore supplies other than goods or real property

Division 84

9

Pre‑establishment costs

Division 60

10

Reimbursement of employees etc.

Division 111

11

Resident agents acting for non‑residents

Division 57

13

Sale of freehold interests etc.

Division 75

14

Second‑hand goods

Division 66

15

Settlement sharing arrangements

Division 80

 


 

Part 2‑3Importations

Division 13Taxable importations

13‑1 What this Division is about

GST is payable on taxable importations. This Division defines taxable importations, states who is liable for the GST and describes how to work out the GST on importations.

Note 1: This Division applies whether or not you are registered.

Note 2: Things other than goods that are supplied overseas for use in Australia (and are therefore in that sense imported) are not taxable importations, but they can attract GST under Division 84.

13‑5 What are taxable importations?

(1) You make a taxable importation if:

(a) goods are imported; and

(b) you enter the goods for home consumption (within the meaning of the Customs Act 1901).

However, the importation is not a taxable importation to the extent that it is a *non‑taxable importation.

Note: There is no registration requirement for taxable importations, and the importer need not be carrying on an enterprise.

(3) However, an importation of *money is not an importation of goods into Australia.

13‑10 Meaning of non‑taxable importation

An importation is a non‑taxable importation if:

(a) it is a non‑taxable importation under Part 3‑2; or

(b) it would have been a supply that was *GST‑free or *input taxed if it had been a supply.

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

You must pay the GST payable on any *taxable importation that you make.

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

(1) The amount of GST on the *taxable importation is 10% of the *value of the taxable importation.

(2) The value of a *taxable importation is the sum of:

(a) the *customs value of the goods imported; and

(b) the amount paid or payable:

(i) for the *international transport of the goods to their *place of consignment in Australia; and

(ii) to insure the goods for that transport;

to the extent that the amount is not already included under paragraph (a); and

(c) any *customs duty payable in respect of the importation of the goods; and

(d) any *wine tax payable in respect of the *local entry of the goods.

(2A) If an amount to be taken into account under paragraph (2)(b) is not an amount in Australian currency, the amount so taken into account is the equivalent in Australian currency of that amount, ascertained in the way provided in section 161J of the Customs Act 1901.

(3) The Commissioner may, in writing:

(a) determine the way in which the amount paid or payable for a specified kind of transport or insurance is to be worked out for the purposes of paragraph (2)(b); and

(b) in relation to importations of a specified kind or importations to which specified circumstances apply, determine that the amount paid or payable for a specified kind of transport or insurance is taken, for the purposes of that paragraph, to be zero.

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

If an importation (the actual importation) is:

(a) partly a *taxable importation; and

(b) partly a *non‑taxable importation;

the value of the part of the actual importation that is a taxable importation is the proportion of the value of the actual importation (worked out as if it were solely a taxable importation) that the taxable importation represents.

13‑99 Special rules relating to taxable importations

Chapter 4 contains special rules relating to taxable importations, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1

GST groups

Division 48

2

GST joint ventures

Division 51

3

Importations without entry for home consumption

Division 114

5

Resident agents acting for non‑residents

Division 57

6

Valuation of re‑imported goods

Division 117


 

Division 15Creditable importations

15‑1 What this Division is about

You are entitled to input tax credits for your creditable importations. This Division defines creditable importations, states who is entitled to the input tax credits and describes how to work out the input tax credits on importations.

15‑5 What are creditable importations?

You make a creditable importation if:

(a) you import goods solely or partly for a *creditable purpose; and

(b) the importation is a *taxable importation; and

(c) you are *registered, or *required to be registered.

15‑10 Meaning of creditable purpose

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

(2) However, you do not import the goods for a creditable purpose to the extent that:

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

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

(3) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia.

(4) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if:

(a) the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and

(b) you do not *exceed the financial acquisitions threshold.

(5) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that:

(a) the importation relates to making a *financial supply consisting of a borrowing; and

(b) the borrowing relates to you making supplies that are not input taxed.

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

You are entitled to the input tax credit for any *creditable importation that you make.

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

The amount of input tax credit for a *creditable importation is an amount equal to the GST payable on the importation. However, the amount of the input tax credit is reduced if the importation is only *partly creditable.

15‑25 Importations that are partly creditable

(1) An importation that you make is partly creditable if it is a *creditable importation that you make only partly for a *creditable purpose.

(3) The amount of the input tax credit on an importation that you make that is *partly creditable is as follows:

where:

extent of creditable purpose is the extent to which the importation is for a *creditable purpose, expressed as a percentage of the total purpose of the importation.

full input tax credit is what would have been the amount of the input tax credit for the importation if it had been made solely for a creditable purpose.

(4) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which an importation is for a *creditable purpose.

15‑99 Special rules relating to creditable importations

Chapter 4 contains special rules relating to creditable importations, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1AA

Annual apportionment of creditable purpose

Division 131

1A

Fringe benefits provided by input taxed suppliers

Division 71

1

GST groups

Division 48

2

GST joint ventures

Division 51

2AA

Importations without entry for home consumption

Division 114

2A

Non‑deductible expenses

Division 69

3

Pre‑establishment costs

Division 60

4

Resident agents acting for non‑residents

Division 57


 

Part 2‑4Net amounts and adjustments

Division 17Net amounts and adjustments

17‑1 What this Division is about

A net amount is worked out for each tax period that applies to you. This is the amount payable by you to the Commonwealth, or payable to you by the Commonwealth, for the tax period.

Adjustments can be made to the net amount. Increasing adjustments increase your net amount, and decreasing adjustments decrease your net amount.

Note 1: GST on taxable importations is not included in the net amount. It is dealt with separately under section 33‑15.

Note 2: Net amounts payable to the Commonwealth are to be paid to the Commissioner on the Commonwealths behalf (see Division 33).

17‑5 Net amounts

(1) The net amount for a tax period applying to you is worked out using the following formula:

where:

GST is the sum of all of the GST for which you are liable on the *taxable supplies that are attributable to the tax period.

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

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

(2) However, the *net amount for the tax period may be increased or decreased if you have any *adjustments for the tax period.

17‑10 Adjustments

If you have any *adjustments that are attributable to a tax period applying to you, alter your *net amount for the period as follows:

(a) add to the amount worked out under subsection 17‑5(1) for the period the sum of all the *increasing adjustments (if any) that are attributable to the period;

(b) subtract from that amount the sum of all the *decreasing adjustments (if any) that are attributable to the period.

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

17‑15 Working out net amounts using approved forms

(1) You may choose to work out your *net amount for a tax period in the way specified in an *approved form if you use the form to notify the Commissioner of that net amount. The amount so worked out is treated as your net amount for the tax period.

Note: Choosing to use section 17‑5 to work out your net amount does not mean your GST return is not in the approved form: see subsection 31‑15(3).

(2) This section has effect despite section 17‑5.

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

(1) The Commissioner may make a determination that, in the circumstances specified in the determination, a *net amount for a tax period may be worked out to take account of other matters in the way specified in the determination.

(2) The matters must relate to correction of errors made in working out *net amounts for the immediately preceding tax period.

(3) If those circumstances apply in relation to a tax period applying to you, you may work out your *net amount for the tax period in that way.

17‑99 Special rules relating to net amounts or adjustments

Chapter 4 contains special rules relating to net amounts or adjustments, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1A

Annual apportionment of creditable purpose

Division 131

1

Anti‑avoidance

Division 165

2

Cessation of registration

Division 138

3

Changes in the extent of creditable purpose

Division 129

4

Company amalgamations

Division 90

4AA

Compulsory third party schemes

Division 79

4A

Distributions from deceased estates

Division 139

5

Gambling

Division 126

5A

Goods applied solely to private or domestic use

Division 130

6

GST branches

Division 54

7

GST groups

Division 48

8

GST joint ventures

Division 51

8A

GST religious groups

Division 49

9

Insurance

Division 78

9AA

Non‑deductible expenses

Division 69

9A

Non‑profit sub‑entities

Division 63

9B

Payment of GST by instalments

Division 162

10

Representatives of incapacitated entities

Division 147

11

Resident agents acting for non‑residents

Division 57

12

Second‑hand goods

Division 66

12AA

Settlement sharing arrangements

Division 80

12A

Simplified accounting methods for retailers

Division 123

12B

Stock on hand on becoming registered etc.

Division 137

13

Supplies in satisfaction of debts

Division 105

14

Supplies of going concerns

Division 135

15

Supplies of things acquired etc. without full input tax credits

Division 132

16

Tradex scheme goods

Division 141

17

Vouchers

Division 100


 

Division 19Adjustment events

Table of Subdivisions

19‑A Adjustment events

19‑B Adjustments for supplies

19‑C Adjustments for acquisitions

19‑1 What this Division is about

Adjustments can arise because of adjustment events. They are events such as a cancellation of a supply or acquisition, or a change in the consideration for a supply or acquisition (for example, because of a volume discount).

Note: Importations do not give rise to adjustment events.

19‑5 Explanation of the effect of adjustment events

The following diagram shows how an *adjustment event for a supply or acquisition can give rise to an *increasing adjustment or a *decreasing adjustment.

 

 

Note: This section is an explanatory section.

Subdivision 19‑AAdjustment events

19‑10 Adjustment events

(1) An adjustment event is any event which has the effect of:

(a) cancelling a supply or acquisition; or

(b) changing the *consideration for a supply or acquisition; or

(c) causing a supply or acquisition to become, or stop being, a *taxable supply or *creditable acquisition.

Example: If goods that are supplied for export are not exported within the time provided in section 38‑185, the supply is likely to become a taxable supply after originally being a supply that was GST‑free.

(2) Without limiting subsection (1), these are *adjustment events:

(a) the return to a supplier of a thing, or part of a thing, supplied (whether or not the return involves a change of ownership of the thing);

(b) a change to the previously agreed *consideration for a supply or acquisition, whether due to the offer of a discount or otherwise;

(c) a change in the extent to which an entity that makes an acquisition provides, or is liable to provide, consideration for the acquisition (unless the entity *accounts on a cash basis).

(3) An *adjustment event:

(a) can arise in relation to a supply even if it is not a *taxable supply; and

(b) can arise in relation to an acquisition even if it is not a *creditable acquisition.

(4) However, the return of a thing supplied, or part of a thing supplied, to its supplier is not an *adjustment event if the return is for the purpose of repair or maintenance.

Subdivision 19‑BAdjustments for supplies

19‑40 Where adjustments for supplies arise

You have an adjustment for a supply for which you are liable to pay GST (or would be liable to pay GST if it were a *taxable supply) if:

(a) in relation to the supply, one or more *adjustment events occur during a tax period; and

(b) GST on the supply was attributable to an earlier tax period (or, if the supply was not a taxable supply, would have been attributable to an earlier tax period had the supply been a taxable supply); and

(c) as a result of those adjustment events, the *previously attributed GST amount for the supply (if any) no longer correctly reflects the amount of GST (if any) on the supply (the corrected GST amount), taking into account any change of circumstances that has given rise to an adjustment for the supply under this Subdivision or Division 21.

19‑45 Previously attributed GST amounts

The previously attributed GST amount for a supply is:

(a) the amount of any GST that was attributable to a tax period in respect of the supply; plus

(b) the sum of any *increasing adjustments, under this Subdivision or Division 21, that were previously attributable to a tax period in respect of the supply; minus

(c) the sum of any *decreasing adjustments, under this Subdivision or Division 21, that were previously attributable to a tax period in respect of the supply.

19‑50 Increasing adjustments for supplies

If the *corrected GST amount is greater than the *previously attributed GST amount, you have an increasing adjustment equal to the difference between the corrected GST amount and the previously attributed GST amount.

19‑55 Decreasing adjustments for supplies

If the *corrected GST amount is less than the *previously attributed GST amount, you have a decreasing adjustment equal to the difference between the previously attributed GST amount and the corrected GST amount.

Subdivision 19‑CAdjustments for acquisitions

19‑70 Where adjustments for acquisitions arise

(1) You have an adjustment for an acquisition for which you are entitled to an input tax credit (or would be entitled to an input tax credit if the acquisition were a *creditable acquisition) if:

(a) in relation to the acquisition, one or more *adjustment events occur during a tax period; and

(b) an input tax credit on the acquisition was attributable to an earlier tax period (or, if the acquisition was not a creditable acquisition, would have been attributable to an earlier tax period had the acquisition been a creditable acquisition); and

(c) as a result of those adjustment events, the *previously attributed input tax credit amount for the acquisition (if any) no longer correctly reflects the amount of the input tax credit (if any) on the acquisition (the corrected input tax credit amount).

(2) In working out the *corrected input tax credit amount for the acquisition:

(a) take into account any change of circumstances that has given rise to an adjustment for the acquisition under this Subdivision or Division 21 or 129; and

(b) if an adjustment relating to the acquisition under Division 131 was attributable to an earlier tax period:

(i) do not take into account that adjustment; and

(ii) treat the acquisition as one in relation to which Division 131 had not applied.

19‑75 Previously attributed input tax credit amounts

The previously attributed input tax credit amount for an acquisition is:

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

(b) the sum of any *increasing adjustments, under this Subdivision or Division 21, 129 or 131, that were previously attributable to a tax period in respect of the acquisition; plus

(c) the sum of any *decreasing adjustments, under this Subdivision or Division 21 or 129, that were previously attributable to a tax period in respect of the acquisition.

19‑80 Increasing adjustments for acquisitions

If the *previously attributed input tax credit amount is greater than the *corrected input tax credit amount, you have an increasing adjustment equal to the difference between the previously attributed input tax credit amount and the corrected input tax credit amount.

19‑85 Decreasing adjustments for acquisitions

If the *previously attributed input tax credit amount is less than the *corrected input tax credit amount, you have a decreasing adjustment equal to the difference between the corrected input tax credit amount and the previously attributed input tax credit amount.

19‑99 Special rules relating to adjustment events

Chapter 4 contains special rules relating to *adjustment events in particular cases, as follows:

 

Checklist of special rules

Item

For this case ...

See:

1AA

Compulsory third party schemes

Division 79

1A

GST religious groups

Division 49

1

Insurance

Division 78

2

Non‑deductible expenses

Division 69

3

Settlement sharing arrangements

Division 80


 

Division 21Bad debts

21‑1 What this Division is about

If debts are written off as bad or are outstanding after 12 months, adjustments (for the purpose of working out net amounts) are made. They can arise both for amounts written off or outstanding and for recovery of amounts previously written off or outstanding.

Note: This Division does not apply to supplies and acquisitions that you account for on a cash basis (except in the limited circumstances referred to in Division 159).

21‑5 Writing off bad debts (taxable supplies)

(1) You have a decreasing adjustment if:

(a) you made a *taxable supply; and

(b) the whole or part of the *consideration for the supply has not been received; and

(c) you write off as bad the whole or a part of the debt, or the whole or a part of the debt has been *overdue for 12 months or more.

The amount of the decreasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.

(2) However, you cannot have an *adjustment under this section if you *account on a cash basis.

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

You have an increasing adjustment if:

(a) you made a *taxable supply in relation to which you had a *decreasing adjustment under section 21‑5 for a debt; and

(b) you recover the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires.

The amount of the increasing adjustment is 1/11 of the amount recovered.

21‑15 Bad debts written off (creditable acquisitions)

(1) You have an increasing adjustment if:

(a) you made a *creditable acquisition for *consideration; and

(b) the whole or part of the consideration is *overdue, but you have not provided the consideration overdue; and

(c) the supplier of the thing you acquired writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more.

The amount of the increasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires.

(2) However, you cannot have an *adjustment under this section if you *account on a cash basis.

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

You have a decreasing adjustment if:

(a) you made a *creditable acquisition in relation to which you had an *increasing adjustment under section 21‑15 for a debt; and

(b) you pay to the supplier of the thing you acquired the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires.

The amount of the decreasing adjustment is 1/11 of the amount recovered.<