A New Tax System (Goods and Services Tax) Act 1999

Chapter 4 - The special rules  

Part 4-4 - Special rules mainly about net amounts and adjustments  

Note:

The special rules in this Part mainly modify the operation of Part 2-4 , but they may affect other Parts of Chapter 2 in minor ways.

Division 134 - Third party payments  

134-10   Increasing adjustments for payments received by third parties  

(1)    
You have an increasing adjustment if:

(a) you receive a payment from an entity (the payer ) that supplied a thing that you acquire from another entity (whether or not that other entity acquired the thing from the payer); and

(b) your acquisition of the thing from the other entity:

(i) was a * creditable acquisition ; or

(ii) would have been a creditable acquisition but for a reason to which subsection (3) applies; and

(c) the payment is in one or more of the following forms:

(i) a payment of * money or * digital currency;

(ii) an offset of an amount of money or digital currency that you owe to the payer;

(iii) a crediting of an amount of money or digital currency to an account that you hold; and

(d) the payment is made in connection with, in response to or for the inducement of your acquisition of the thing; and

(e) the payment is not * consideration for a supply you make.

(1A)    

However, subsection (1) does not apply unless the supply of the thing by the payer:

(a) was a * taxable supply ; or

(b) would have been a taxable supply but for any of the following:

(i) the payer and the entity that acquired the thing from the payer being * members of the same * GST group ;

(ii) the payer and the entity that acquired the thing from the payer being members of the same * GST religious group ;

(iii) the payer being the * joint venture operator for a * GST joint venture , and the entity that acquired the thing from the payer being a * participant in the GST joint venture.

(2)    
The amount of the * increasing adjustment is an amount equal to the difference between:

(a) either:

(i) if your acquisition from the other entity was a * creditable acquisition - the amount of the input tax credit entitlement for the acquisition; or

(ii) if your acquisition from the other entity would have been a creditable acquisition but for a reason to which subsection (3) applies - the amount that would have been the amount of the input tax credit entitlement for the acquisition had it been a creditable acquisition;

taking into account any other * adjustments that arose, or would have arisen, relating to the acquisition; and

(b) the amount of the input tax credit to which you would have been entitled, or would (but for a reason to which subsection (3) applies) have been entitled, for that acquisition:

(i) if the * consideration for the acquisition had been reduced by the amount of the payer ' s payment to you; and

(ii) taking into account any other adjustments that arose, or would have arisen, relating to the acquisition, as they would have been affected (if applicable) by such a reduction in the consideration.

(3)    

This subsection applies to the following reasons why your acquisition of the thing from the other entity was not a * creditable acquisition :

(a) you and the other entity are * members of the same * GST group ;

(b) you and the other entity are members of the same * GST religious group ;

(c) you are the * joint venture operator for a * GST joint venture , and the other entity is a * participant in the GST joint venture.

(4)    

However:

(a) paragraph (3)(a) does not apply if you and the payer are * members of the same * GST group when the payment referred to in paragraph (1)(a) is made; and

(b) paragraph (3)(b) does not apply if you and the payer are members of the same * GST religious group when that payment is made.