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A New Tax System (Goods and Services Tax) Act 1999

Chapter 4 - The special rules  

Part 4-2 - Special rules mainly about supplies and acquisitions  

Note:

The special rules in this Part mainly modify the operation of Part 2-2, but they may affect other Parts of Chapter 2 in minor ways.

Division 79 - Compulsory third party schemes    View history reference

Subdivision 79-A - Modified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies    View history reference

79-10  Adjustment where operator becomes aware that correct input tax credit situation differs from basis on which premium selection test was satisfied  

 View history reference

Decreasing adjustment

(1)  

If:


(a) subsection 79-5(3) applies to a payment or supply; and


(b) after the *premium selection test was satisfied, the *operator became or becomes aware that there was actually no entitlement to an input tax credit for any of the amount of the premium or premiums paid in relation to the period during which the event giving rise to the claim happened; and


(c) if subsection 79-5(4) had applied, the operator would have been entitled to a *decreasing adjustment (the notional decreasing adjustment);

then:


(d) the operator has a decreasing adjustment whose amount is, subject to paragraph (e), equal to the notional decreasing adjustment; and


(e) if one or more *increasing adjustments (each being a notional section 78-40 increasing adjustment) would have arisen, before the decreasing adjustment under paragraph (d) arose, under Division 19 because of section 78-40 applying in relation to the notional decreasing adjustment, the amount of the decreasing adjustment under paragraph (d) is reduced by the sum of the notional section 78-40 increasing adjustments; and


(f) for the purposes of applying section 78-40 after the decreasing adjustment arises under this subsection, that decreasing adjustment is taken to arise under Division 78.

Increasing adjustment

(2)  

If:


(a) subsection 79-5(4) applies to a payment or supply; and


(b) as a result, the *operator has a *decreasing adjustment (the original decreasing adjustment); and


(c) after the *premium selection test was satisfied, the operator became or becomes aware that there actually was an entitlement to an input tax credit for some or all of the amount of the premium or premiums paid in relation to the period during which the event giving rise to the claim happened;
 View history reference

then:


(d) the operator has an increasing adjustment whose amount is, subject to paragraph (e), equal to the original decreasing adjustment; and


(e) if one or more *increasing adjustments (each being a section 78-40 increasing adjustment) arose, before the increasing adjustment under paragraph (d) arose, under Division 19 because of section 78-40 applying in relation to the original decreasing adjustment, the amount of the increasing adjustment under paragraph (d) is reduced by the sum of the section 78-40 increasing adjustments; and


(f) after the increasing adjustment arises under paragraph (d), no adjustment arises under Division 19 because of section 78-40 applying in relation to the original decreasing adjustment.


 



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