A New Tax System (Goods and Services Tax Transition) Act 1999
This section has effect if:
(a) you are the recipient of a taxable supply for which the GST is payable by you because of this Division; and
(b) the whole or part of the consideration for the supply has not been received by the supplier; and
(c) the supplier writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more. (2)
Section 21-5 of the GST Act does not apply to the taxable supply. (3)
Instead, you have a decreasing adjustment equal to 10% of the amount written off, or 10% of the amount that has been overdue for 12 months or more, as the case requires. However, you cannot have an adjustment under this section if you account on a cash basis. (4)
You have an increasing adjustment if:
(a) you were the recipient of a taxable supply in relation to which you had a decreasing adjustment under subsection (3); and
(b) you subsequently pay to the supplier the whole or a part of the amount written off, or the whole or a part of the amount that has been overdue for 12 months or more, as the case requires.
The amount of the increasing adjustment is 10% of the amount paid.
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