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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 134 - Third party payments    View history reference

134-10  Increasing adjustments for payments received by third parties  

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(1)  

You have an increasing adjustment if:


(a) you receive a payment from an entity (the payer) that supplied a thing that you acquire from another entity (whether or not that other entity acquired the thing from the payer); and


(b) your acquisition of the thing from the other entity:

(i) was a *creditable acquisition; or

(ii) would have been a creditable acquisition but for a reason to which subsection (3) applies; and
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(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 you owe to the payer;

(iii) a crediting of an amount of money or digital currency to an account that you hold; and
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(d) the payment is made in connection with, in response to or for the inducement of your acquisition of the thing; and


(e) the payment is not *consideration for a supply you make.
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(1A)  

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However, subsection (1) does not apply unless the supply of the thing by the payer:


(a) was a *taxable supply; or


(b) would have been a taxable supply but for any of the following:


(i) the payer and the entity that acquired the thing from the payer being *members of the same *GST group;

(ii) the payer and the entity that acquired the thing from the payer being members of the same *GST religious group;

(iii) the payer being the *joint venture operator for a *GST joint venture, and the entity that acquired the thing from the payer being a *participant in the GST joint venture.

(2)  

The amount of the *increasing adjustment is an amount equal to the difference between:


(a) either:

(i) if your acquisition from the other entity was a *creditable acquisition - the amount of the input tax credit entitlement for the acquisition; or

(ii) if your acquisition from the other entity would have been a creditable acquisition but for a reason to which subsection (3) applies - the amount that would have been the amount of the input tax credit entitlement for the acquisition had it been a creditable acquisition;
taking into account any other *adjustments that arose, or would have arisen, relating to the acquisition; and
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(b) the amount of the input tax credit to which you would have been entitled, or would (but for a reason to which subsection (3) applies) have been entitled, for that acquisition:

(i) if the *consideration for the acquisition had been reduced by the amount of the payer's payment to you; and

(ii) taking into account any other adjustments that arose, or would have arisen, relating to the acquisition, as they would have been affected (if applicable) by such a reduction in the consideration.
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(3)  

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This subsection applies to the following reasons why your acquisition of the thing from the other entity was not a *creditable acquisition:


(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)  

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However:


(a) paragraph (3)(a) does not apply if you and the payer 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 payer are members of the same *GST religious group when that payment is made.


 



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