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  • Issue 12 – Tax invoices, adjustment events and recipient created tax invoices

    12.1. Tax invoices

    12.1.a. In preparing a tax invoice, is it acceptable to show total value and total GST to arrive at total price, rather than showing separately the price, GST and value of each individual item?

    For source of ATO view, refer to GSTR 2013/1 - Goods and services tax: tax invoices

    Where the supply comprises multiple taxable items that are identified separately on a tax invoice (for example on a 'multiple -line' basis), the price for each item does not have to be shown. Only enough information to determine the price of what is supplied must be shown. This may be the total amount of all the lines or items added together.

    12.1.b. Is the part number on the tax invoice sufficient to identify the goods?

    For source of ATO view, refer to GSTR 2013/1 - Goods and services tax: tax invoices

    Subparagraph 29-70(1)(c)(iii) of the GST Act requires a tax invoice to include enough information to ascertain 'what is supplied, including the quantity (if applicable) and the price of what is supplied'.

    In the motor vehicle industry it is considered that a part number or code can satisfy the requirement to show what is supplied if the supplier and the recipient hold another document which describes the item that matches the part number or code.

    12.1.c. Is it necessary to provide detail at line item level or will a delivery or supply summary be sufficient to satisfy the content requirements of an electronic tax invoice?

    For source of ATO view, refer to GSTR 2013/1 - Goods and services tax: tax invoices.

    An electronic invoice should satisfy the same information requirements as a paper invoice. However, a concession for recipients who create Recipient Created Tax Invoices is identified in GSTR 2013/1Goods and services tax: tax invoices, where electronic purchasing systems are used.

    A delivery or supply summary is sufficient, provided it is linked back to supporting documentation which itself is readily identifiable.

    12.1.d. Is a warranty claim made by a dealer for work carried out in respect of a manufacturer/importer warranty a tax invoice?

    Depending on the terms of the agreement between the dealer and the manufacturer/importer, the claim may be either a quotation or an invoice for a taxable supply, that is, does the claim notify an obligation to make a payment? A major factor in deciding this issue will be whether the price is determined by the manufacturer/importer after receipt of the claim, or by the dealer before the claim is submitted.

    If a taxable supply has been made and an obligation arises, the documentation sent to the manufacturer/importer to claim payment for the repair would be an invoice and may satisfy the requirements of a tax invoice. Any subsequent change in price will be an adjustment event and would normally require the issue of an adjustment note. If, however, the warranty claim is a quotation for work yet to be approved, it will not be a tax invoice.

    12.1.e. Who is responsible for issuing a tax invoice when a customer purchases a car under a hire purchase agreement?

    Under normal circumstances the car is owned by a finance company until such time as a customer is found. At such time to facilitate the sale under a hire purchase agreement a series of simultaneous transactions occur.

    • The finance company will sell the car to the dealer. The finance company should issue a tax invoice to the dealer.
    • The dealer will then sell the car to a finance company to facilitate the hire purchase. The dealer should issue a tax invoice to the finance company.
    • The dealer, as agent for the finance company, sells the car to the customer under a hire purchase contract. The tax invoice should be issued to the customer by the finance company.

    12.1.f. Can a tax invoice be issued for an individual dealer to cover a month's supplies rather than for each individual supply by that dealer?

    For source of ATO view, refer to GSTR 2013/1 - Goods and services tax: tax invoices.

    It is acceptable for the dealer to issue a single tax invoice that includes all supplies made to a customer during the month. Section 29-70 of the GST Act allows for a tax invoice to relate to a number of separate supplies.

    The GST Act does however state that 'the supplier of a taxable supply must, within 28 days after the recipient of the supply requests it, give the recipient a tax invoice for the supply, unless it is a recipient created tax invoice.'

    12.1.g. What is an acceptable electronic data interchange (EDI) format for a tax invoice?

    Non-interpretative - straight application of the law.

    Provided that the EDI records satisfy the requirements of the GST legislation and existing requirements dealing with record keeping of electronic records, the EDI records will be satisfactory.

    12.1.h. Will the ATO accept a tax invoice in a non-human readable form?

    Non-interpretative - other references GSTR 2013/1 - Goods and services tax: tax invoices.

    Records must be in English or 'readily accessible and easily convertible into English'; computer records which satisfy these requirements will be acceptable.

    12.1.i. Is there a need to have an Australian business number (ABN) in the EDI purchase order document?

    Non-interpretative - straight application of the law.

    The ABN is not required to be shown in an EDI purchase order document. However, a tax invoice must contain sufficient information to enable the ABN to be clearly ascertained.

    12.2. Adjustment events

    12.2.a. If there is a change in price and an adjustment note is issued, does the adjustment note have to identify a specific shipment and a specific invoice?

    For source of ATO view, refer to principles in GSTR 2013/2 - Goods and services tax: adjustment notes.

    Goods and Services Tax Ruling GSTR 2013/2 - Goods and services tax: adjustment notes, which sets out the minimum requirements for adjustment notes, does not require an adjustment note to refer to the original tax invoice.

    12.3. Adjustment events current period

    12.3.a. When completing the business activity statement (BAS), why is it necessary to show adjustments relating to the current and earlier tax periods differently?

    Non-interpretative - straight application of the law.

    The GST legislation states that adjustment events in the current tax period do not give rise to adjustments; however, adjustment events outside the current period give rise to adjustments to GST previously payable and must be reported separately.

    12.3.b. What type of documentation is required for current period adjustment events?

    For source of ATO view, refer to paragraph 19 of GSTR 2013/2 - Goods and services tax: adjustment notes.

    Adjustment notes do not need to be prepared for current period adjustment events which affect the GST payable in the current period. Even though suppliers are not required to, they may choose to issue adjustment notes in the current period. Paragraph 19 of GSTR 2013/2 - Goods and services tax: adjustment notes apply. Adjustment notes must satisfy section 29-75 of the GST Act.

    12.4. Recipient created tax invoices

    12.4.a. Can a recipient created adjustment note be issued if the supplier issued the initial tax invoice?

    For source of ATO view, refer to paragraph 10 GSTR 2013/2 - Goods and services tax: adjustment notes.

    Paragraph (a) of subsection 29-70(1) of the GST Act requires the supplier to issue the tax invoice unless the invoice is a `recipient created tax invoice'. Subsection 29-75(2) of the GST Act requires the supplier to issue the adjustment note unless any tax invoice relating to the supply would have been a recipient created tax invoice. The legislation places the obligation to issue the adjustment note with the entity that issued the original tax invoice.

    12.4.b. What is the responsibility of the recipient who creates a recipient created tax invoice in case of understatement of GST payable?

    For source of ATO view, refer to principles in:

    • GSTR 2013/2 - Goods and services tax: adjustment notes
    • GSTR 2000/10 - Goods and services tax: recipient created tax invoices.

    GSTR 2000/10Goods and services tax: recipient created tax invoices, paragraph 13(e) sets out the recipient's responsibility to the supplier.

    Where the supplier creates the invoice, the liability to calculate GST payable on the supply and remit GST collected is the supplier's responsibility. However, where the recipient creates the invoice, the recipient will calculate the GST payable on the supply. It remains the responsibility of the supplier to remit the GST on the supply, based on 10% of the value.

    GSTR 2013/2Goods and services tax: adjustment notes deals with the required contents of adjustment notes.

    12.5. RCTI Determinations

    Non-interpretative.

    The Motor Trades Association of Australia lodged a request for a determination to issue RCTI in respect of trade-in vehicles. See A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 46) 2000 provides the conditions under which a dealer can issue a RCTI for trade-in vehicles.

      Last modified: 07 Jun 2012QC 16411