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  • Debit errors

    You can correct a debit error on your current BAS if all the following conditions apply for each debit error:

    You may need to decrease your fuel tax credits in your current BAS if you made a debit error. To do this, include the dollar amount at label 7C (Fuel tax credit over claim) on your current BAS.

    If you do not meet the above conditions, you must correct some or all of the error on the original BAS on which the error occurred – penalties and interest charges may apply. You can do this online via Online services for business, ATO online services – individuals and sole traders or phone us to get a revision form.

    When claiming fuel tax credits, you need to apply the correct rates. Rates change regularly, so use the fuel tax credit calculator every time you make a claim.

    Example 8: overclaimed during temporary reduction in fuel excise duty from 30 March to 28 September 2022

    Mitchell acquired 10,000 litres of diesel fuel on 1 June 2022 for use in his heavy vehicle while travelling on public roads. He claimed $1,780 (10,000 × 0.178 cents per litre) on his June quarterly BAS. Mitchell claimed the amount by mistake using the fuel tax credit rate based on the February 2022 rate.

    From 30 March to 28 September 2022, businesses that acquired fuel for use in heavy vehicles for travelling on public roads couldn’t claim fuel tax credits. This is because the road user charge was more than the excise duty paid, which reduced the fuel tax credit rate to nil.

    In February 2023, Mitchell uses the fuel tax credit calculator to check this calculation. The calculator showed he should have claimed $0 (10,000 × 0.00 cents per litre) on his June 2022 quarterly BAS.

    To correct the overclaim, Mitchell makes a correction on his March 2023 quarterly BAS to decrease his fuel tax credit amount by $1,780. He does this by including $1,780 at label 7C (Fuel tax credit over claim).

    End of example

    Debit error time limits

    Time limits apply for the correction of a debit error from the time the debit error occurred (not when it was discovered).

    You can correct a debit error on your current BAS if it is within the debit error time limit that corresponds with your current GST turnover in the table below. Otherwise you must correct the error on the original BAS.

    Table 2: Time limits for correcting debit errors

    Current GST turnover

    Debit error time limit

    Less than $20m

    The debit error must be corrected on a BAS that is lodged within 18 months of the due date of the BAS in which the error was made.

    $20m or more

    The debit error must be corrected on a BAS that is lodged within 12 months of the due date of the BAS in which the error was made.

    For more information on GST turnover, see GSTR 2001/7 Goods and services tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover.

    Example 9: error within the debit error time limit

    EX Pty Ltd has a current GST turnover of $18 million and lodges its BAS monthly. While preparing its July 2021 BAS, EX Pty Ltd discovers a debit error of $5,000 on the BAS it lodged for June 2020.

    EX Pty Ltd can only correct the error on a BAS lodged within 18 months of the due date of the BAS in which the error was made. The due date for lodging the June BAS was 21 July 2020. Eighteen months from that date is 21 January 2022.

    End of example

     

    Example 10: debit error is outside the debit error time limit

    Jiesi has a GST turnover of less than $20 million and lodges her BAS quarterly. In December 2021, while preparing her BAS for the quarter ended 31 December 2021, she discovers a debit error made on her BAS for the quarter ended 31 March 2020.

    Jiesi can only correct the debit error on a BAS that she lodges within 18 months from the due date of the March 2020 BAS. The due date for the March 2020 BAS was 28 April 2020, so she has until 28 October 2021 to correct the debit error.

    Jiesi cannot correct the debit error on her BAS for the quarter ended 31 December 2021. She must correct the error by revising the original BAS on which the error occurred. Penalties and the general interest charge may also apply.

    End of example

    Debit error value limits

    You can correct a debit error on your current BAS if the net sum of the debit errors is within the debit error value limit that corresponds with your current GST turnover in the table below:

    Table 3: Debit error value limits

    Current GST turnover

    Debit error value limit

    Less than $20m

    Less than $10,000

    $20m to less than $100m

    Less than $20,000

    $100m to less than $500m

    Less than $40,000

    $500m to less than $1b

    Less than $80,000

    $1b or more

    Less than $450,000

    The net sum of the debit errors is the sum of one or more debit errors less the sum of any credit errors that results in an overall debit error. You can offset your credit errors against your debit errors for the purposes of working out whether you fall within the relevant debit error value limit.

    Different guidelines apply for single and multiple errors:

    • If you have a single debit error to correct on your current BAS, you can correct that error if it is within the relevant value limit. If the error exceeds the value limit you will need to revise the original BAS in which the error was made.
    • If you have multiple debit errors to correct on your current BAS, you can correct the net sum of the debit errors up to the relevant debit error value limit. If the net sum exceeds the debit error, you will need to revise the original BAS on which the debit errors were made for the amounts that exceed the debit error value limit.
    • If you have multiple debit and credit errors to correct on your current BAS, you can correct the net sum of the debit errors (debit errors less credit errors) up to the relevant value limit – you will need to revise the original BAS on which the debit errors were made for the amounts exceeding the debit error value limit.

    You cannot correct the amount that exceeded the debit error value limit on a subsequent BAS. You should correct the remaining debit error on the original BAS.

    Example 11: net sum of debit errors exceeds the debit error value limit

    Tim’s Mining has a current GST turnover of $5 million and lodges its BAS quarterly. In August 2021, Tim's Mining does an end-of-year review and identifies 2 fuel tax credit debit errors made in the previous year:

    • a debit error of $7,000 that occurred in the BAS for the quarter ended 30 September 2020
    • a second debit error of $5,000 that occurred in the BAS for the quarter ended 30 September 2020.

    The net sum of the debit errors is $12,000 ($7,000 + $5,000), which exceeds the debit error value limit for Tim's Mining of $10,000. Tim’s Mining can only correct the debit errors up to $10,000 in its current BAS.

    Tim’s Mining decides to correct the first error of $7,000 and $3,000 (out of the $5,000) of the second error (assuming all other conditions for correcting a debit error are met). To do this, it includes $10,000 at label 7C on its current BAS.

    Tim's Mining must then correct the balance of $2,000 of the second error by revising the original BAS in which the error was made; that is, the BAS for the quarter ended 30 September 2020.

    Alternatively, Tim’s Mining may choose to correct one or both errors in the BAS for the quarter ended 30 September 2020 to decrease its fuel tax credit amount by $12,000. This could increase any penalties and interest charges that may apply.

    End of example

     

    Example 12: net sum of debit errors is within the debit error value limit

    Joan's Earthmoving lodges its BAS quarterly and has a current GST turnover of $10 million. On 11 April 2021, while preparing the BAS for the quarter ended 31 March 2021, Joan's Earthmoving discovers the following errors.

    Summary of Joan’s Earthmoving errors

    BAS period ending

    Error

    Debit error amount

    Credit error amount

    December 2019

    Clerical transcription error

    $0

    $10,000

    March 2020

    Over claimed fuel tax credits

    $13,000

    $0

    June 2020

    Clerical transcription error

    $0

    $5,000

    September 2020

    Did not include decreasing fuel tax credit adjustment

    $6,000

    $0

    Total

    (All above errors)

    $19,000

    $15,000

    Joan's Earthmoving wants to correct these errors in its quarterly BAS ended 31 March 2021. It determines it can correct the credit errors in this BAS as they are both within the 4-year period of review.

    Joan's Earthmoving determines its debit errors meet all the required conditions. It also needs to work out whether each debit error, as part of the net sum of debit errors, is within the debit error value limit of $10,000.

    The net sum of the debit errors is $4,000 (that is, $19,000 − $15,000), which is below the relevant debit error value limit ($10,000). Joan's Earthmoving can also correct both of the debit errors by taking them into account on the BAS for the quarter ended 31 March 2021. That is, the errors relating to the over-claimed fuel tax credits of $13,000 and the increasing adjustment of $6,000.

    End of example
    Debit error value limits for GST groups, branches and joint ventures

    For GST groups, branches and joint ventures, the debit error value limits apply to the entity that lodges the BAS and is entitled to claim fuel tax credits. That is, it applies to the representative member of the GST group (rather than each individual member) and the GST joint operator of a GST joint venture.

    Credit errors

    You can correct a credit error on your current BAS if both of the following conditions apply:

    Credit errors are not subject to value limits.

    You may need to increase your fuel tax credits in your current BAS if you made a credit error. To do this, include the dollar amount of the error to your fuel tax credit amount for that period at label 7D (Fuel tax credit) on your current BAS.

    Credit error time limits

    Error occurring on or after 1 July 2012

    If you made a credit error in a reporting period that started on or after 1 July 2012, you can correct the error on a BAS within the 4-year period of review. That is, 4 years from the day after you lodge the BAS in which the error occurred.

    Example 6: 4-year period of review

    Peter, a monthly lodger, works out he made an error in his reporting period ended 30 September 2019. He used the wrong fuel tax credit rate and claimed too much fuel tax credits for that period.

    Because he lodged the BAS on 1 October 2019, Peter can correct that error on a reporting period that starts before 2 October 2022.

    End of example
      Last modified: 19 Jan 2023QC 18882