• GST: progressive or periodic sales and purchases

    A progressive or periodic sale or purchase may include one made under a:

    • lease or hire agreement
    • property maintenance agreement, or
    • construction contract.

    It does not include one made under a hire purchase agreement.

    You may use either the accounts method or the calculation worksheet method to complete the relevant GST labels on your activity statement for the reporting period.

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    GST definitions: sales, purchases, tax period.

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    Attention

    We recommend you read this fact sheet in conjunction with GST – completing your activity statement (QC 17458).

    If you account for GST on a cash basis, this fact sheet does not apply to you.

    End of attention

    How do I account for progressive or periodic sales and purchases?

    If you account for GST on a non-cash basis, there are special rules about when to account for sales or purchases that are made and paid for progressively or periodically. For example, where you lease a property to someone and they pay rent monthly.

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    GST on sales

    For sales, you account for the GST as if each component of the progressive or periodic sale is a separate sale. This means you report each progressive or periodic payment you receive at G1 (GST on sales) in the reporting period you receive it. However if you issue a separate tax invoice for a component of a progressive or periodic sale before you receive payment, you report the amount for that component of the sale at G1 in the reporting period in which you issue the tax invoice.

    Do not report the whole amount you are due to receive for the sale when you receive the first payment, even if you issue a single invoice for the entire sale.

    You may need to reduce the amount shown at G1 for any part of these sales that are not connected with Australia.

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    If you use the accounts method to work out the amount of GST you are liable to pay on your sales, report the GST included in the price of each component of the sale at 1A (GST on sales) for the relevant reporting period.

    If you use the calculation worksheet method, use the worksheet to calculate how much to report at 1A.

    GST credits on purchases

    For purchases, you claim GST credits for each component of the progressive or periodic purchase separately.

    This means you report the amount of each progressive or periodic payment at G10 (capital purchases) or G11 (non-capital purchases) in the reporting period in which you make the payment. However, if you receive a tax invoice for a component of the progressive or periodic purchase before you make payment, you report the amount for that component of the purchase at G10 or G11 in the reporting period in which you receive the tax invoice.

    Do not report the whole amount you are liable to pay for the purchase when you make the first payment, even if you have received an invoice for the entire purchase price.

    If you use the accounts method to work out the amount of your GST credits, report the amount of the credits at 1B (GST on purchases) for the relevant reporting period.

    If you use the calculation worksheet method, use the worksheet to work out how much to report at 1B.

    Find out more

    GST definitions: GST credits.

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    More information

    For more information, refer to:

      Last modified: 31 Mar 2014QC 18709