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 136 - Bad debts relating to transactions that are not taxable or creditable to the fullest extent  

Subdivision 136-A - Bad debts relating to partly taxable or creditable transactions  

136-5   Adjustments relating to partly taxable supplies  

If you have an * adjustment under section 21-5 , 21-10 , 136-30 or 136-35 in relation to a supply that was partly a * taxable supply , the amount of that adjustment is reduced to the following amount:

Full adjustment   ×   Taxable proportion

where:

full adjustment is what would be the amount of the adjustment worked out under section 21-5 , 21-10 , 136-30 or 136-35 if this section did not apply.

taxable proportion is the proportion of the * value of the supply (worked out as if it were solely a taxable supply) that the taxable supply represents.

Example:

If the amount of an adjustment under section 21-5 would be $100 but the supply was only 80% taxable, the amount of the adjustment is $80.