You may have to make changes on your current activity statement to increase or decrease the amount of GST you must pay for a reporting period. These changes are known as 'adjustments'.
There are two types of adjustments:
- increasing adjustments, which increase how much GST you must pay for a reporting period
- decreasing adjustments, which decrease how much GST you must pay for a reporting period.
Making GST adjustments is different from correcting GST errors made on an earlier activity statement. 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.
Johnny K Entertainment intends to hold a concert in April. In February, they sell 2,000 tickets for $110 each including GST. They remit the $20,000 GST in their February monthly activity statement.
In March, they cancel the concert and refund all ticket holders $110 each. In their March activity statement they include a decreasing adjustment of $20,000 (1/11th of the refunded amount).End of example