• Examples

    The following examples show how the GST instalment amount can be varied under different circumstances.

    Example 1: paying smaller instalments

    Linda is eligible and chooses to pay her GST liability by instalments. She paid the advised amount of $12,500 for the first and second quarters, but for the third quarter, she decides to vary her quarterly instalment. This is because, at the time the instalment is due, Linda estimates her annual GST liability to decrease from $50,000 to $40,000.

    Linda works out her varied instalment amount for the third quarter by:

    Step 1

    Estimating her annual net GST liability and completing label G22

    $40,000

    Step 2

    Calculating the amount to be paid by third quarter
    ($40,000 x 75%)

    less GST instalment amounts paid for quarter one and two

    Varied instalment amount for third quarter


    $30,000

    ($25,000)

    $ 5,000

    Step 3

    Completing label G23 with varied instalment amount

    $5,000

    Step 4

    Completing label G24 using a reason code from table 2 on the form

    23

    Step 5

    Transferring the amount at G23 to label 9

    $5,000

    Step 6

    Completing the remaining details, lodging the form and paying $5,000 by the due date.

     

     

    Example 2: making larger instalments

    Walker Company's quarterly GST instalment amount, as advised by us, was $25,000. Walker Co. paid this amount in their first and second quarter.

    Walker Co. estimated that their annual GST liability would increase from $100,000 to $120,000.

    They decided to vary their GST instalment amount to incorporate the change rather than pay the advised amount and the balance in their annual GST return.

    Walker Co. work out their varied instalment amount for the third quarter by:

    Step 1

    Estimating annual net GST liability and completing label G22

    $120,000

    Step 2

    Calculating the amount to be paid by third quarter
    ($120,000 x 75%)

    less GST instalment amounts paid for quarter one and two

    Varied instalment amount for third quarter


    $90,000

    ($50,000)

    $40,000

    Step 3

    Completing label G23 with varied instalment amount

    $40,000

    Step 4

    Completing label G24 using reason code from table 2 on the form

    23

    Step 5

    Transferring the amount at G23 to label 9

    $40,000

    Step 6

    Completing the remaining details, lodging the form and paying $40,000 by the due date

     

     

    End of example
      Last modified: 24 May 2014QC 17323