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  • Handing a cheque to the supplier

    Rather than pay the withholding amount to us directly you may agree to give the supplier a bank cheque. This means your supplier is acting as your agent.

    You must provide your supplier with:

    • your GST withholding payment slip and payment reference number (PRN)
    • a cheque made out to the Commissioner of Taxation for the withholding amount (rounded down to the nearest dollar).

    You won't be discharged from your withholding obligation until your supplier has given us the cheque, although you will be protected from penalties. The purchaser is liable for the payment of the withholding amount to us. If a bank cheque is provided to the supplier at settlement you must confirm this amount has been paid to us.

    If you provided an email address on Form two, we send you a confirmation email once you have made your payment. If you don't receive this email within two weeks, contact the supplier to ensure they have sent the cheque to us.

    General interest charges (GIC) may apply for any amounts received late.

    Example: Payment by bank cheque at settlement

    On 15 September 2018, James enters into a contract with ABC Company Pty Ltd (ABC) to purchase new residential premises. ABC notifies James that a withholding obligation applies to the supply.

    James completes Form one: GST property settlement withholding notification online and receives a payment reference number (PRN) and lodgment reference number (LRN).

    Settlement occurs on 25 November 2018. James lodges Form two: GST property settlement date confirmation using his LRN from Form one.

    At settlement, instead of paying the withholding amount directly to us, James gives ABC a bank cheque made out to the Commissioner of Taxation together with a payment slip including his PRN.

    ABC mails the cheque and payment slip to us and we process it.

    James is discharged from his withholding obligation when we receive and process his cheque.

    James receives an email to say his withholding payment has been received.

    ABC gets an email to say a credit has been allocated to their GST property credit account. ABC views this on the Online services for business GST property credit account.

    ABC lodges their activity statement. A credit for the withholding amount is transferred to their activity statement account. If the credit is greater than the net amount for the period, ABC receives a refund of the difference (subject to our normal refund processes).

    End of example

    See also:

      Last modified: 05 Jul 2021QC 56253