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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  


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    View history reference

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

 View history reference


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.


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


 View history reference
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.


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.


This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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