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  

136-10   Adjustments in relation to partly creditable acquisitions  

(1)    

If you have an * adjustment under section 21-15 , 21-20 , 136-40 or 136-45 in relation to a * creditable acquisition that was * partly creditable , the amount of that adjustment is reduced to the following amount:

Full adjustment

×

Extent of creditable   purpose

×

Extent of consideration

where:

extent of consideration is the extent to which you provide, or are liable to provide, the * consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition.

extent of creditable purpose is the extent of * creditable purpose last used to work out:

(a) the amount of the input tax credit for the acquisition; or

(b) the amount of any * adjustment under Division 129 in relation to the acquisition;

expressed as a percentage of the total purpose of the acquisition.

full adjustment is what would be the amount of the adjustment worked out under section 21-15 , 21-20 , 136-40 or 136-45 if this section did not apply.

(2)    

If you have an * adjustment under section 21-15 , 21-20 , 136-40 or 136-45 in relation to a * creditable acquisition that was a * reduced credit acquisition and that was not * partly creditable (that is, it is wholly for a * creditable purpose because of Division 70 ), the amount of that adjustment is reduced to the following amount:

Full adjustment

×

Percentage credit reduction

×

Extent of consideration

where:

extent of consideration is the extent to which you provide, or are liable to provide, the * consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition.

percentage credit reduction is the reduced input tax credit percentage prescribed for the purposes of subsection 70-5(2) for an acquisition of that kind.

full adjustment is what would be the amount of the adjustment worked out under section 21-15 , 21-20 , 136-40 or 136-45 if this section did not apply.

(3)    

However, this section does not apply to an *adjustment that you have in relation to a *creditable acquisition if:

(a) the amount of the input tax credit for the acquisition is worked out under Division 131 ; and

(b) the adjustment is attributable to a tax period that is not later than the tax period to which an adjustment under section 131-55 relating to the acquisition is attributable.