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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  

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    View history reference

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

 View history reference

(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)  

 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.

(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.


 



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