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  • When to make adjustments

    You may have to make an adjustment if an 'adjustment event' occurs, resulting in a change to the amount of GST you must pay or GST credit you can claim. An adjustment event may occur on a sale or a purchase.

    You will need to make an adjustment for a sale/purchase if all of the following apply:

    • during a reporting period, an adjustment event occurs for your sale/purchase
    • you accounted for the sale/purchase in the activity statement for a previous reporting period
    • as a result of the adjustment event, the GST amount you previously reported no longer reflects the correct GST amount.

    When you become aware of the need for an adjustment you generally report it in the activity statement for your current reporting period.

    If you account for GST on a cash basis and have to make a payment as a result of an adjustment event, you generally make the adjustment in the activity statement for the reporting period in which you make the payment.

    If you only paid part of the required amount in a given reporting period, you only make an adjustment in that period's activity statement for the amount paid.

    Find out about:

    Adjustment events for sales

    Adjustment events for sales include:

    • a taxable sale you made is cancelled – for example, a customer returns goods and you refund the purchase price to the customer
    • the price of a taxable sale you make changes – for example, you provide a rebate to a customer
    • an event causes your sale to become taxable – for example, goods you sell GST-free for export are not exported and become taxable
    • an event causes your sale to stop being taxable.

    Working out adjustments for sales

    If you have to make an adjustment for a sale you made, the adjustment amount is:

    • a decreasing adjustment if you originally paid more than the amount payable once the adjustment event is taken into account. In this case you pay less GST for the reporting period.
    • increasing adjustment if you originally paid less than the amount payable once the adjustment event is taken into account. In this case you pay more GST for the reporting period.

    Adjustment events for purchases

    Adjustment events for purchases include:

    • a purchase you make is cancelled – for example, you return goods you purchased and receive a full refund
    • the price of a purchase you make changes – for example, you receive a rebate on the purchase price
    • an event causes your purchase to become creditable
    • an event causes your purchase to stop being creditable.

    Working out adjustments for purchases

    If you have to make an adjustment for a purchase you made, the adjustment amount is:

    • an increasing adjustment if you claimed more for the purchase in the earlier tax period than the amount you could have claimed if the adjustment event had been taken into account.
    • a decreasing adjustment if you claimed less for the purchase in the earlier tax period than the amount you could have claimed if the adjustment event had been taken into account.

    See also:

    • GSTR 2000/19 Goods and services tax: making adjustments under Division 19 for adjustment events

    Sales and purchases not yet accounted for

    If an adjustment event occurs but you haven't yet accounted for the relevant sale or purchase in an activity statement, you don't have to make an adjustment.

    You can take the change into account when you first report the transaction on your activity statement. For example, if there is a price change, you include the final amended price on your activity statement.

      Last modified: 30 Jun 2017QC 17537