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

Chapter 4 - The special rules  

Part 4-6 - Special rules mainly about tax periods  

Note:

The special rules in this Part mainly modify the operation of Part 2-6 , but they may affect other Parts of Chapter 2 in minor ways.

Division 159 - Changing your accounting basis  

159-5   Ceasing to account on a cash basis - amounts not previously attributed  

(1)  
The GST payable by you on a * taxable supply , the input tax credit to which you are entitled for a * creditable acquisition , or an * adjustment that you have, is attributable to a particular tax period (the transition tax period ), and not to any other tax period, if:


(a) at the start of the transition tax period, you cease to * account on a cash basis ; and


(b) the GST on the supply, the input tax credit on the acquisition, or the adjustment, was not attributable, to any extent, to a previous tax period during which you accounted on a cash basis; and


(c) it would have been attributable to that previous tax period had you not accounted on a cash basis during that period.

For accounting on a cash basis, see Subdivision 29-B .

Example:

In tax period A in the following diagram, you issue an invoice for a supply that you made, but you receive no payment for the supply until tax period D. However, you cease to account on a cash basis at the start of tax period C (which is therefore the transition tax period).

Transition tax periods

Under section 29-5 , the supply was not attributable to tax period A (because at the time you were accounting on a cash basis), but it would have been attributable to that period if you had not been accounting on a cash basis (because you issued the invoice in that period). Therefore the supply is attributable to tax period C (the transition tax period).

(2)  
This section has effect despite sections 29-5 , 29-10 and 29-20 (which are about attributing GST on supplies, input tax credits on acquisitions, and adjustments) and any other provisions of this Chapter.




This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.