• Correcting credit errors

    You can correct a credit error on a later activity statement if all of the following conditions apply for each credit error:

    Attention

    Credit errors are not subject to value limits.

    End of attention

    Credit error time limit

    If the GST error occurred on or after 1 July 2012

    If you made a credit error on an activity statement for a reporting period that starts on or after 1 July 2012, you can correct the GST error on a later activity statement that starts within the four year period of review of the assessed GST net amount for the earlier reporting period that contains the GST error.

    The period of review starts on the day we give you a notice of assessment and ends four years from the day after the notice of assessment is given. An assessment of your GST net amount is generally made on the day you lodge your activity statement. The activity statement is taken to be the notice of assessment given on the same day.

    Example 3: Four year period of review

    ABC Ltd, a monthly lodger, made a GST error in the September 2013 reporting period that resulted in an overstatement of its assessed net amount for that reporting period. As that activity statement was lodged and the net amount assessed on 1 October 2013, ABC Ltd can correct that GST error on an activity statement for a reporting period that starts between 1 October 2013 and 2 October 2017.

    End of example

    If the GST error occurred before 1 July 2012

    If you made a credit error on an activity statement for a reporting period that started before 1 July 2012, you can correct the GST error on a later activity statement if either of the following occurs:

    • the GST net amount for the reporting period in which the error was made did not cease to be payable
    • you have an entitlement to an outstanding GST refund for that reporting period that has not expired.

    The GST net amount for the reporting period generally ceases to be payable four years after it became payable by you.

    Your entitlement to a GST refund expires four years from the end of the reporting period to which the refund relates unless either of the following occurs:

    • you notify us of the entitlement to the refund during the four year period
    • we notify you of your entitlement to the refund during the four year period.

    Find out more

    Information about the time limits for claiming GST refunds that applies to reporting periods starting before 1 July 2012 – Time limits on GST refunds

    End of find out more

    Example 4: Credit errors made in pre and post 1 July 2012 reporting periods

    Sajeev Enterprises lodges quarterly activity statements and has a current GST turnover of $4 million. In March 2014, Sajeev Enterprises carries out a review of its past activity statements and discovers the following GST errors:

    Summary of Sajeev Enterprises' GST errors

    Reporting period

    GST error

    Credit error

    December 2007

    Double counted GST on taxable sales

    $1,000

    September 2010

    Under claimed GST credits

    $22,000

    September 2012

    Clerical error

    $18,000

    June 2013

    Didn't claim a decreasing GST adjustment

    $2,000

     

    Total

    $43,000

    Sajeev Enterprises lodges its activity statement for the March 2014 reporting period on 28 April 2014. Sajeev Enterprises did not give the Commissioner a notification of its entitlement to the refund in relation to the credit error that was made in the December 2007 reporting period. Therefore, the time limit for correcting that GST error expired on 31 December 2011. As a result, the GST error cannot be corrected.

    The $22,000 error in the September 2010 reporting period can be corrected in the March 2014 activity statement. This is because the GST error is being corrected in an activity statement that is being lodged within four years from the end of the September 2010 reporting period.

    Sajeev Enterprises lodges its activity statements for the September 2012 and June 2013 reporting periods on 28 October 2012 and 28 July 2013 respectively. The September 2012 and June 2013 errors, totalling $20,000, can also be corrected in the March 2014 reporting period as those GST errors are being corrected in a reporting period that starts within the four year period of review for the September 2012 and June 2013 activity statements.

    End of example
      Last modified: 27 Aug 2015QC 16233