Division 142—Excess GST
Table of Subdivisions
‑A Excess GST unrelated to adjustments
‑B Excess GST related to cancelled supplies
1 What this Division is about
Amounts of excess GST will not be refunded if this would give an entity a windfall gain.
Note: Refunding excess GST to a supplier will give it a windfall gain if it has already passed on the excess GST in the price of the supply (and not reimbursed the recipient).
‑A—Excess GST unrelated to adjustments
‑5 When this Subdivision applies
(1) This Subdivision applies
in relation to the amount in subsection (2 ) if your *assessed net amount for a tax period takes into account an amount of GST exceeding that which is payable.
Note: This Subdivision
can apply whether or not you have paid, or been refunded, the assessed net amount. (2) The amount (the extra GST) is the excess GST less any of it that: (a) is covered by a * decreasing adjustment attributable to a later tax period; or (b) is correctly attributable to a different tax period.
Example: Sunny Co mistakenly reports a negative net amount of $4,000 made up of GST of $10,000 less input tax credits of $14,000. In fact, Sunny Co’s GST should have been $8,000 making its negative net amount $6,000. Sunny Co has
extra GST of $2,000.
‑10 Refunding extra GST (1) For the purposes of each *taxation law, so much of the extra GST as you have passed on to another entity is taken to have always been:
(a) payable; and
(b) on a *taxable supply;
until you reimburse the other entity for the passed
Note 1: If you reimburse the passed
‑on GST so that this subsection ceases to apply , you may have a decreasing adjustment (see section 19 ‑55) and the other entity may have an increasing adjustment (see section 19 ‑80).
Note 2: The rest of the
extra GST will be refunded as described in section 155 ‑75 in Schedule 1 to the Taxation Administration Act 1953. (2) Subsection (1)
does not apply
for the purposes of how subsection 11 ‑ 15(2) (about creditable purpose) applies
you. (3) Subsection (1) does not apply to the extent that the Commissioner is satisfied that a refund of the extra GST: (a) would flow to the entity that has effectively borne the cost of the extra GST ; and (b) not give an entity a windfall gain. (4) Subsection (1)
does not apply for the purposes of applying a *taxation law to the other entity if, and while, that other entity knows, or could reasonably be expected to have known, that you have not paid the
extra GST to the Commissioner.
Subsection (1) still applies for the purposes of applying taxation laws to you. 142 ‑ 15 Working out if the extra GST has been passed on For the purposes of section 142 ‑ 10: (a) some or all of the extra GST may pass on to the other entity even if: (i) a * tax invoice is not issued to or by that other entity; or (ii) a tax invoice issued to or by that other entity relates to that extra GST, but does not contain enough information to enable that extra GST to be clearly ascertained; and (b) if: (i) a tax invoice is issued to or by the other entity; and (ii) it contains enough information to enable some or all of the extra GST to be clearly ascertained; the tax invoice is prima facie evidence of that part of the extra GST having passed on to that other entity.
‑B— Excess GST related to cancelled supplies
‑20 Refunding excess GST relating to cancelled supplies
(a) your *assessed net amount for a tax period takes into account an amount of GST on a supply; and
(b) you have a *decreasing adjustment attributable to a later tax period as a result of the cancellation of the supply
to the extent that you have passed on that GST to the
*recipient of the supply, but not reimbursed the recipient for the passed ‑on GST.
2) Subsection (1) has effect despite se ction 19 ‑55 ( which is about decreasing adjustments for supplies).