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Progressive or periodic sales and purchases

Last updated 16 July 2020

A progressive or periodic sale or purchase may be a:

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

It does not include hire purchase agreements.

Accounting 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.

See also:

GST on sales

You account for the GST on progressive or periodic sales as if each component is a separate sale. This means you report each payment you receive at G1 (GST on sales) in the reporting period you receive it. If you issue a separate tax invoice for a component of a sale before you receive payment, you report that amount 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 is not connected with Australia.

If you use the accounts method to work out your GST liability, 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.

See also:

  • GSTR 2018/1Goods and services tax: supplies of real property connected with the indirect tax zone (Australia)
  • GSTR 2018/2Goods and services tax: supplies of goods connected with the indirect tax zone (Australia)
  • GSTR 2019/1Goods and services tax: supply of anything other than goods or real property connected with the indirect tax zone (Australia)

GST credits on 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. If you receive a tax invoice for a component of the purchase before you make payment, you report that amount 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 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.

See also:

  • GSTR 2000/35 Goods and services tax: Division 156 - supplies and acquisitions made on a progressive or periodic basis
  • GSTR 2000/12 Goods and services tax: attributing GST payable and input tax credits for supplies and acquisitions under lay-by sale agreements.

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