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  

134-5   Decreasing adjustments for payments made to third parties  

(1)    
You have a decreasing adjustment if:


(a) you make a payment to an entity (the payee ) that acquires a thing that you supplied to another entity (whether or not that other entity supplies the thing to the payee); and


(b) your supply of the thing to the other entity:


(i) was a * taxable supply ; or

(ii) would have been a taxable supply 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 the payee owes to you;

(iii) a crediting of an amount of money or digital currency to an account that the payee holds; and


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


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


(1A)    


However, subsection (1) does not apply if:


(a) the supply of the thing to the payee is a * GST-free supply , or is not * connected with the indirect tax zone ; or


(b) the Commissioner is required to make a payment to the payee, under Division 168 (about the tourist refund scheme), related to the payee ' s acquisition of the thing;

and you know, or have reasonable grounds to suspect, that the supply of the thing to the payee is a GST-free supply or is not connected with the indirect tax zone, or that the Commissioner is so required.


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


(a) either:


(i) if your supply to the other entity was a * taxable supply - the amount of GST payable on the supply; or

(ii) if your supply to the other entity would have been a taxable supply but for a reason to which subsection (3) applies - the amount of GST that would have been payable on the supply had it been a taxable supply;
taking into account any other * adjustments that arose, or would have arisen, relating to the supply; and


(b) the amount of GST that would have been payable, or would (but for a reason to which subsection (3) applies) have been payable, for that supply:


(i) if the * consideration for the supply had been reduced by the amount of your payment to the payee; and

(ii) taking into account any other adjustments that arose, or would have arisen, relating to the supply, 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 supply of the thing to the other entity was not a * taxable supply :


(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 payee 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 payee are members of the same * GST religious group when that payment is made.



 

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.