Annotated GST Act – Chapter 2 – Part 2-4 – Divisions 17-21

Division 17 – Net amounts and adjustments

17.1     What this Division is about

17.5     Net amounts


Commissioner of Taxation v Multiflex Pty Ltd [2011] FCAFC 142 – at [25]: the amount “worked out” on the approved form is treated as the entity’s net amount for a period but s 17-15(2) also underscores the primacy of the amount so worked out by providing that the section has effect despite s 17-5 – s 17-15 and s 35-5 of the TAA and s 105-15 of Schedule 1 to the TAA operate harmoniously so as to provide for a system of taxation in which, generally speaking and in the first instance, the duty of assessing (“working out”) the liability to make a payment or, as the case may be, the entitlement to receive a refund is placed on the entity concerned, not on the Commissioner – at [26]: if the Commissioner subsequently issues and assessment, the net amount so assessed necessarily supersedes whatever amount the entity earlier worked out on its approved form. Subject to the outcome of any subsequent objection or later appeal or review proceeding, the entity’s net amount will be the amount as assessed by the Commissioner.

17.10   Adjustments

17.20   Determinations relating to how to work our net amounts

17.99   Special rules relating to net amounts or adjustments

Division 19 – Adjustment events

19.1     What this Division is about

19.5     Explanation of the effect of adjustment events

Subdivision 19A – Adjustment events

19.10   Adjustment events


SVYR and Commissioner of Taxation [2022] AATA 3994 – mobile telephone and tablet accessories – where telecommunications provider granted credit to customer of its licensed retail mobile telephone and accessories outlet for purchases of accessories – where account paid by telecommunications provider to retail outlet less than financed price repaid by customer – whether creditable acquisition by retail outlet – whether retail outlet has decreasing adjustment – significance of contractual terms – no taxable supply by telecommunications provider to retail outlet – not creditable acquisition – no desecrating adjustment – decision affirmed

The Electrical Goods Importer and Commissioner of Taxation [2009] AATA 854 – cash back rebate paid by Applicant (wholesaler) to consumer does not change the consideration for the taxable supply by the retailer to the consumer – there is no adjustment event

TAB Ltd v Commissioner of Taxation [2005] NSWSC 552 – whether the refund of bets paid to punters, where the event is abandoned or there is no outcome, and the refund is paid in a subsequent tax period constitutes an adjustment event – whether there is a change in the consideration for the gambling supply (the bet) but reducing it to nil or the gambling supply ceases to be a taxable supply

Overseas cases

Revenue and Customs v K E Entertainments Ltd [2020] UKSC 28 – Taxable amount – Taxpayer charging fee for participation in bingo sessions – Tax payer recalculating liability to tax in accordance with business brief and Notice published by HMRC – Taxpayer giving effect to recalculation by issuing an internal credit note – Taxpayer making retrospective claim for over payment of tax – whether recalculation resulted in a ‘decrease in consideration for a supply which includes an amount of VAT’ within the meaning of Regulation 38 – Appeal dismissed

Virgin Media Ltd v Revenue and Customs [2020] UKUT 100 – alue of supply – Value Added Tax Act 1994, schedule 6, paragraph 4 – goods or services supplied on terms allowing a discount for prompt payment – “the supply” – the “terms” of the supply – whether “allowing a discount for prompt payment” – whether appellant could rely on schedule 6 paragraph 4 – no

Inventive Tax Strategies Ltd (in liq) v Revenue and Customs [2019] UKUT 221 – Supplier receiving payment – subsequently coming subject to an unconditional obligation to repay – supplier went into liquidation and credit notes issued to customers but actual repayment not made – whether reduction in consideration for taxable supply – no – appeal dismissed

Rulings and Determinations

GSTD 2014/3 – Goods and services tax: do payments made by a vendor to a purchaser of real property when the rent received falls below a rental yield guaranteed by the vendor give rise to an adjustment event for the purposes of Division 19 of the GST Act?

GSTR 2000/19 – Austlii – Goods and services tax: making adjustments under Division 19 for adjustment events

Subdivision 19B – Adjustments for supplies

19.40   Where adjustments for supplies arise

19.45   Previously attributed GST amounts

19.50   Increasing adjustments for supplies

19.55   Decreasing adjustments for supplies

Subdivision 19C – Adjustments for acquisitions

19.70   Where adjustments for acquisitions arise

19.75   Previously attributed input tax credit amounts

19.80   Increasing adjustments for acquisitions

19.85   Decreasing adjustments for acquisitions

19.99   Special rules relating to adjustment events

Division 21 – Bad debts

21.1     What this Division is about

Rulings and Determinations

GSTR 2000/2 – Austlii – Goods and services tax: adjustments for bad debts

21.5     Writing off bad debts (taxable supplies)

21.10   Recovering amounts previously written off (taxable supplies)


Apple Computer Australia Pty Ltd v Mekrizis [2003] NSWSC 126 – at [207] – an increasing adjustment is not restricted to recovery from the debtor, but extends to recovery from a guarantor or any other source.

International cases

Regency Factors PLC v Revenue and Customs [2020] UKUT 357  – bad debt relief – taxpayer provided debt factoring service to clients – whether taxpayer entailed to bad debt relief for unpaid invoices – appeal dismissed – first instance Regency Factors Ltd v Revenue & Customs [2019] UKFTT 144 – bad debt relief (BDR) – when consideration for supply of services received – when consideration due and payable – whether amounts outstanding 6 months after time of supply – whether claims for BDR in time – whether procedural requirements for BDR met including maintenance of refund of bad debts account and writing off of debts to that account – appeals dismissed.

Thorne Motor Company v Revenue and Customs [2016] UKFTT 605 – bad debt relief – time limit for making claim – cash accounting – whether adopted – appeal dismissed

Times Right Marketing Ltd (in Liquidation) v Revenue & Customs [2008] UKVAT V20611 – VALUE ADDED TAX – bad debt relief – returns rendered but all output tax not paid – claim for bad debt relief limited to the amount of tax paid (by way of credit for input tax) – whether relief available even though tax paid was not related to specific invoices – yes –appeal allowed

Berck Ltd v Revenue & Customs [2007] UKVAT V20051 – BAD DEBT RELIEF — debt written off on management buyout — was there consideration for the write off — yes — is appellant entitled to bad debt relief — no — appeal dismissed

21.15   Bad debts written off (creditable acquisitions)

21.20   Recovering amounts previously written off (creditable acquisitions)

21.99   Special rules relating to adjustments for bad debts

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