Tax Laws Amendment (2009 GST Administration Measures) Act 2010 (20 of 2010)

Schedule 1   Time limit on entitlements to input tax credits and fuel tax credits

Part 1   Amendments relating to input tax credits

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

11   After Division 132

Insert:

Division 133 - Providing additional consideration under gross-up clauses

133-1 What this Division is about

You may have a decreasing adjustment for an acquisition that you made if, to take account of a GST liability that the supplier is subsequently found to have, you provide additional consideration at a time when you can no longer claim an input tax credit.

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

(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 may provide a time limit on your entitlement to an input tax credit.

(2) 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.

133-10 Availability of adjustments under Division 19 for acquisitions

(1) If:

(a) you have a *decreasing adjustment under this Division for an acquisition; and

(b) the circumstances that gave rise to the adjustment also constitute an *adjustment event;

you do not have a decreasing adjustment under section 19-70 for the acquisition in relation to those circumstances.

(2) This section has effect despite section 19-70 (which is about adjustments for acquisitions arising because of adjustment events).