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 132 - Supplies of things acquired etc. without full input tax credits

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132-5 Decreasing adjustments for supplies of things acquired, imported or applied for a purpose that is not fully creditable

(1)

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You have a decreasing adjustment under this Division if:

(a) you make a * taxable supply of a thing (or a supply of a thing that would have been a taxable supply had it not been * GST-free under Subdivision 38-J ); and

(b) the supply is a supply by way of sale; and

(c) your acquisition, importation or subsequent * application of the thing, related solely or partly to making * financial supplies , or was solely or partly of a private or domestic nature.

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(2)

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The amount of the * decreasing adjustment is as follows:

where:

adjusted input tax credit
is:

(a) the amount of any input tax credit that was attributable to a tax period in respect of the acquisition or importation; minus

(b) the sum of:

(i) any *increasing adjustments, under Subdivision 19-C or Division 129 , that were previously attributable to a tax period in respect of the acquisition or importation; and

(ii) any increasing adjustment under Division 131 that has been previously, is or will be attributable to a tax period in respect of the acquisition or importation; plus

(c) the sum of any * decreasing adjustments , under Subdivision 19-C or Division 129 or 133 , that were previously attributable to a tax period in respect of the acquisition or importation.

full input tax credit
is the amount of the input tax credit to which you would have been entitled for acquiring or importing the thing for the purpose of your * enterprise if:

(a) the acquisition or importation had been solely for a * creditable purpose ; and

(b) in the case where the supply to you was a * taxable supply because of section 72-5 or 84-5 - the supply had been or is a * taxable supply under section 9-5 .

price
is the * price of the * taxable supply .

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History

S 132-5(2) amended by No 20 of 2010, s 3 and Sch 1 item 10, by substituting " Division 129 or 133 " for " Division 129 " in para (c) of the definition of " adjusted input tax credit " , applicable, and taken to have applied, in relation to acquisitions and adjustments that are taken into account in:

(a) GST returns given to the Commissioner under the A New Tax System (Goods and Services Tax) Act 1999 after 7.30 pm Australian Eastern Standard Time on 12 May 2009; or

(b) assessments made by the Commissioner under Subdivision 105-A in Schedule 1 to the Taxation Administration Act 1953 after that time; or

(i) GST returns referred to in paragraph (a); or

(ii) assessments referred to in paragraph (b).

S 132-5(2) amended by No 77 of 2005, s 3 and Sch 3 items 15 and 16, by omitting " only " after " was a *taxable supply " and inserting " or is " after " had been " in para (b) of the definition of " full input tax credit " , applicable to supplies made on or after 1 October 2005.

S 132-5(2) amended by No 134 of 2004, s 3 and Sch 2 item 15, by substituting para (b) of the definition of " adjusted input tax credit " , applicable in relation to net amounts for tax periods starting, or that started, on or after:

(a) for entities that, on 1 October 2004, had quarterly tax periods applying to them - 1 October 2004; or

(b) for other entities - 1 November 2004.

Para (b) of the definition of " adjusted input tax credit " formerly read:

(b) the sum of any * increasing adjustments , under Subdivision 19-C or Division 129 , that were previously attributable to a tax period in respect of the acquisition or importation; plus

(3)
However, if the amount worked out under subsection (2) is greater than the difference between the full input tax credit and the adjusted input tax credit, the amount of the * decreasing adjustment is an amount equal to that difference.

(4)

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In working out the adjusted input tax credit, the acquisition, importation or * application in question is treated as having been for a * creditable purpose except to the extent that the acquisition, importation or application:

(a) relates to the making of * financial supplies ; or

(b) is of a private or domestic nature.

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