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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. In those circumstances your supplier will be acting as your agent. You must provide your supplier with the following:

    • 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 will not 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 still need to confirm this amount has been paid to us.

    If you have provided an email address on Form two a confirmation email will be sent to you once the payment has been made. If this email is not received within two weeks contact the supplier to ensure they have sent the cheque to us.

    General interest charges (GIC) may also 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) for the purchase of 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 and James lodges Form two GST property settlement date confirmation using the LRN.

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

    ABC mails the cheque and payment slip to us and it is processed.

    James is discharged from his withholding obligation as we have received and processed the cheque.

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

    ABC gets an email to say a credit has been allocated to their GST property credits account. ABC can view this on the Business Portal GST property credit account.

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

    End of example

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      Last modified: 10 Oct 2019QC 56253