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 133 - Providing additional consideration under gross-up clauses  

133-5   Decreasing adjustments for additional consideration provided under gross-up clauses  

(1)  
You have a decreasing adjustment if:


(a) you made an acquisition on the basis that:


(i) it was not a * creditable acquisition because the supply to which the acquisition relates was not a * taxable supply ; or

(ii) it was * partly creditable because the supply to which the acquisition relates was only partly a taxable supply; and


(b) you provided * additional consideration for the acquisition in compliance with a contractual obligation that required you, or had the effect of requiring you, to provide additional consideration if:


(i) in a case where subparagraph (a)(i) applies - the supply was later found to be a taxable supply, or to be partly a taxable supply; or

(ii) in a case where subparagraph (a)(ii) applies - the supply was later found to be a taxable supply to a greater extent; and


(c) GST on the supply has not ceased to be payable (other than as a result of its payment); and


(d) at the time you provided the additional consideration, you were no longer entitled to an input tax credit for the acquisition.

Note:

Section 93-5 or 93-15 may provide a time limit on your entitlement to an input tax credit.

(2)  


The amount of the * decreasing adjustment is the difference between:


(a) what would have been the * previously attributed input tax credit amount for the acquisition if:


(i) the * additional consideration for the acquisition had been provided as part of the original *consideration for the acquisition; and

(ii) in a case where you have not held a * tax invoice for the acquisition - you held such an invoice; and

(iii) subsection 29-10(4) did not apply in relation to the acquisition; and


(b) the previously attributed input tax credit amount.

(3)  
To avoid doubt, additional consideration for an acquisition includes a part of the * consideration for the acquisition that:


(a) relates to the amount of GST payable on the * taxable supply to which the acquisition relates; and


(b) at the time of the acquisition, the parties to the transaction under which the acquisition was made assumed was not payable.


 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.