Correcting GST errors

GST adjustments

You make a GST adjustment on your activity statement if a later event changes the amount of GST payable for a sale or the GST credit you are entitled to for a purchase. For example:

• an event occurs that changes the price of a sale or a purchase (for example, you provide a discount to a customer or receive a rebate from a seller)
• a taxable sale or creditable purchase you made is cancelled (for example, where goods are returned)
• you write off a bad debt or you recover a previously written-off bad debt
• your actual use of a purchase or importation for business purposes differs from your intended use
• you make or receive a third party payment
• you cancel your GST registration
• you sell something that you used to make financial supplies.

Making GST adjustments is different from correcting GST errors made on an earlier activity statement. A GST adjustment relates to a reported sale or purchase that was correct at the time of lodgment, whereas a GST error relates to an amount that was incorrect at the time of lodgment.

For more information about making GST adjustments to your activity statement, refer to Making adjustments on your activity statements (NAT 11035).

GST errors can occur when making a GST adjustment. For example, omitting, understating or overstating a GST adjustment. This guide can be applied to correct such GST errors.

Sections within What is not a GST error

• Claiming a GST credit on a later activity statement
• GST adjustments
• GST restricted refunds