About GST errors
A GST error is a mistake you made in working out your GST net amount on your BAS that would, if it was the only mistake that you made, result in you:
- reporting or paying too much GST (credit error)
- reporting or paying too little GST (debit error).
A GST error does not include an error relating to fuel tax credits, wine equalisation tax or luxury car tax.
Example: GST error only relates to the GST, GST credit or GST adjustment
In working out the GST net amount for the monthly reporting period ending 30 June, Bronlynn inadvertently reported GST payable of $1,000 instead of $100 on a taxable sale. That is, the price of the taxable sale was $1,100 (GST-inclusive). The GST error is the overpaid GST (that is, $900), not the price of the taxable sale (that is, $1,100).
End of exampleWhat is not a GST error
The following are not included in the definition of a GST error:
Claiming a GST credit on a later BAS
Claiming a GST credit on a later BAS because you failed to claim it in an earlier BAS is not a GST error. If you did not claim a GST credit for a purchase at the time when you were entitled to claim it (for example, you were not aware that you had a tax invoice) you are entitled to claim it on a later BAS.
A 4 year time limit generally applies to GST credit claims.
GST adjustments
You make a GST adjustment if a change occurs that affects the amount of GST payable for a sale or the GST credit you are entitled to for a purchase.
Making GST adjustments is different from correcting GST errors. A GST adjustment relates to a reported sale or purchase that was correct at the time of lodgment, whereas a GST error relates to an amount that was incorrect at the time of lodgment.
However, where you overlooked an adjustment or incorrectly worked out the amount of the adjustment in an earlier tax period, you have made a GST error, and this error could be corrected in a later tax period subject to the applicable time and value limits.
Incorrectly charged GST
Excess GST is when you incorrectly treat something as taxable and include GST for it in your BAS. The excess GST is treated as correctly payable on a taxable sale where you have passed on the excess GST to your customer in the price they paid for the sale and you have not reimbursed them.
The passed on excess GST is not an error. It can, however, be recovered through a decreasing adjustment if you have first reimbursed your customer for the passed on excess GST.
For more information see Incorrectly charged GST.