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

Chapter 4 - The special rules  

Part 4-2 - Special rules mainly about supplies and acquisitions  

Note:

The special rules in this Part mainly modify the operation of Part 2-2 , but they may affect other Parts of Chapter 2 in minor ways.

Division 78 - Insurance  

Subdivision 78-A - Insurers  

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78-40   Adjustment events relating to decreasing adjustments under this Division  

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(1)    
Division 19 applies in relation to a * decreasing adjustment that an insurer has under this Division as if:

(a) the adjustment were an input tax credit; and

(b) the settlement of the claim to which the adjustment relates were a * creditable acquisition that the insurer made; and

(c) any payment or supply made by another entity, in settlement of a claim made by an insurer in the insurer's exercising of rights of subrogation in respect of the * insurance policy in question, were a reduction in the * consideration for the acquisition.

(2)    

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Paragraph (1)(c) does not apply to a payment by another entity in relation to which an * increasing adjustment arises under section 80-30 or 80-70 (which are about settlement sharing arrangements).

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History

S 78-40(2) inserted by No 83 of 2004, s 3 and Sch 7 item 1, applicable in relation to net amounts for tax periods starting on or after 1 July 2000.

S 78-40 substituted by No 177 of 1999, s 3 and Sch 1 item 90, effective 1 July 2000. S 78-40 formerly read:

78-40 Effect of payments of excess under insurance policies on amounts of GST  
(1)
If, in settlement of a claim under an *insurance policy:

(a) the entity insured under the insurance policy makes a *taxable supply under subsection 78-30(2); and

(b) the entity makes a payment of an excess under the policy;

the value of the taxable supply is reduced by an amount equal to 10/11 of the amount of the excess.

(2)
This section has effect despite section 9-75 (which is about the value of taxable supplies).

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