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What is a GST error

Last updated 8 October 2023

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).

To be a GST error, the mistake must relate to an amount of GST, GST credit or GST adjustment.

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 example

What 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.

GST restricted refunds

We use the term 'GST restricted refund' when you report an amount of excess GST but you are not entitled to a refund or to amend the period for of this excess amount as it would result in a windfall gain. This can occur when you incorrectly treat a GST-free or input taxed sale as taxable or when you miscalculate the GST payable (for example, miscalculating the GST for the sale of a property under the margin scheme) or for any other reason. The refund of the excess GST is restricted if you included the incorrect GST in the sale price and did not reimburse it to your customers. This is to ensure that businesses do not get a windfall gain. Where there is a GST restricted refund there is no GST error.