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  • Completing your activity statement to correct GST errors

    To correct a GST error, you include the correction amount at boxes 1A or 1B. If the net result of the error(s) is that you have paid too little GST include the amount at 1A, alternately if the net result is that you have overpaid GST include the amount at 1B. You may also reflect the correction at boxes G1, G2, G3, G10 or G11 as appropriate.

    You must keep records and other relevant information to explain the correction.

    See also:

    Example

    Theo Pty Ltd has a current GST turnover of less than $20 million. While preparing its activity statement for the June 2015 quarterly reporting period (which is yet to be lodged), it discovers that it failed to claim a GST credit for a purchase it was entitled to claim in the September 2013 reporting period.

    Theo Pty Ltd also discovers that it made two GST errors in working out its GST net amount for earlier reporting periods.

    The first GST error is a $15,000 debit error made in working out the net amount for the March 2014 reporting period. Theo Pty Ltd lodged its March 2014 activity statement on 28 April 2014.

    The second GST error is a $7,000 credit error relating to a decreasing GST adjustment. Theo Pty Ltd forgot to take into account the GST adjustment in working out its net amount for the June 2013 reporting period. Theo Pty Ltd lodged its June 2013 activity statement on 28 July 2013.

    Theo Pty Ltd is not subject to any compliance activity at the time of preparing its activity statement for the June 2015 reporting period and has not previously taken the GST errors into account.

    As the GST credit that Theo Pty Ltd failed to claim in the September 2013 reporting period does not fall within the definition of a GST error, it does not need to work out whether conditions for correcting a credit error are satisfied. Theo Pty Ltd can claim the GST credit in the June 2015 reporting period.

    Theo Pty Ltd works out whether it can correct the GST errors in its June 2015 quarterly reporting period that will be lodged before its due date on 28 July 2015, as follows:

    Table 3: Theo Pty Ltd's GST errors

    Rules for correcting GST errors

    GST error made: $7,000 credit error June 2013 reporting period

    GST error made: $15,000 debit error March 2014 reporting period

    Does the error relate to an amount of GST, GST credit or GST adjustment?

    Yes

    GST adjustment error

    Yes

    Amount of GST

    At time of lodging the later activity statement to correct the GST error, do both of the following apply? The GST error:

    • does not relate to subject matter of a compliance activity
    • is not made in a reporting period that is subject to a compliance activity
     

    Yes

    Yes

    The GST error was not taken into account in working out the net amount for another reporting period?

    Yes – not taken into account

    Yes – not taken into account

     

    Will the activity statement for the later reporting period be lodged during the period of review of the earlier reporting period?

    Yes

    The period of review for the June 2013 quarterly activity statement ends on 29 July 2017. The later activity statement which corrects the error will be lodged on or before 28 July 2015.

    Yes

    The period of review for the March 2014 quarterly activity statement ends on 29 April 2018. The later activity statement which corrects the error will be lodged on or before 28 July 2015.

    Will the error be corrected in an activity statement that is yet to be lodged?

    Yes

    Yes

    If the GST error was a debit error, was the error caused by recklessness or intentional disregard?

    Not applicable – credit error

    No

    Are the debit errors corrected within the applicable debit error time limit?

    Not applicable – credit error

    Yes

    Lodgment date for June 2015 activity statement is within 18 months of the due date for lodgment of the March 2014 activity statement (that is, 28 October 2015).

    Is the net sum of the debit errors within the applicable debit error value limit?

    Not applicable – credit error

    Yes

    Net sum of the debit errors is $8,000 ($15,000 debit less $7,000 credit), which is below the applicable debit error value limit of $10,000.

    Theo Pty Ltd cannot offset the GST credit it failed to claim in September 2013 as it is not a credit error.

    Therefore, in its activity statement for the June 2015 quarterly reporting period Theo Pty Ltd can correct both GST errors (the credit error and the debit error) and claim the GST credit that it failed to include in the September 2013 reporting period.

    To correct the errors in the June 2015 quarterly reporting period, Theo Pty Ltd adds $8,000 at box 1A. It then reflects the correction in 1A by adding $88,000 (if it chose to report the GST-inclusive amount) in G1 or $80,000 (if it chose to report the GST-exclusive amount).

    End of example

    See also:

      Last modified: 06 Jun 2017QC 16233