[pic] A New Tax System (Goods and Services Tax) Act 1999 Act No. 55 of 1999 as amended This compilation was prepared on 26 May 2009 taking into account amendments up to Act No. 33 of 2009 The text of any of those amendments not in force on that date is appended in the Notes section The operation of amendments that have been incorporated may be affected by application provisions that are set out in the Notes section Prepared by the Office of Legislative Drafting and Publishing, Attorney-General's Department, Canberra Contents Chapter 1-Introduction 1 Part 1-1-Preliminary 1 Division 1-Preliminary 1 1-1 Short title [see Note 1] 1 1-2 Commencement 1 1-3 Commonwealth-State financial relations 1 1-4 States and Territories are bound by the GST law 1 Part 1-2-Using this Act 2 Division 2-Overview of the GST legislation 2 2-1 What this Act is about 2 2-5 The basic rules (Chapter 2) 2 2-10 The exemptions (Chapter 3) 2 2-15 The special rules (Chapter 4) 3 2-20 Miscellaneous (Chapter 5) 3 2-25 Interpretative provisions (Chapter 6) 3 2-30 Administration, collection and recovery provisions in the Taxation Administration Act 1953 3 Division 3-Defined terms 4 3-1 When defined terms are identified 4 3-5 When terms are not identified 4 3-10 Identifying the defined term in a definition 5 Division 4-Status of Guides and other non-operative material 6 4-1 Non-operative material 6 4-5 Explanatory sections 6 4-10 Other material 6 Chapter 2-The basic rules 7 Division 5-Introduction 7 5-1 What this Chapter is about 7 5-5 The structure of this Chapter 7 Part 2-1-The central provisions 9 Division 7-The central provisions 9 7-1 GST and input tax credits 9 7-5 Net amounts 9 7-10 Tax periods 9 7-15 Payments and refunds 9 Part 2-2-Supplies and acquisitions 10 Division 9-Taxable supplies 10 9-1 What this Division is about 10 Subdivision 9-A-What are taxable supplies? 10 9-5 Taxable supplies 10 9-10 Meaning of supply 10 9-15 Consideration 11 9-20 Enterprises 12 9-25 Supplies connected with Australia 14 9-30 Supplies that are GST-free or input taxed 16 9-39 Special rules relating to taxable supplies 17 Subdivision 9-B-Who is liable for GST on taxable supplies? 18 9-40 Liability for GST on taxable supplies 18 9-69 Special rules relating to liability for GST on taxable supplies 18 Subdivision 9-C-How much GST is payable on taxable supplies? 18 9-70 The amount of GST on taxable supplies 18 9-75 The value of taxable supplies 18 9-80 The value of taxable supplies that are partly GST-free or input taxed 20 9-85 Value of taxable supplies to be expressed in Australian currency 21 9-90 Rounding of amounts of GST 21 9-99 Special rules relating to the amount of GST on taxable supplies 23 Division 11-Creditable acquisitions 24 11-1 What this Division is about 24 11-5 What is a creditable acquisition? 24 11-10 Meaning of acquisition 24 11-15 Meaning of creditable purpose 25 11-20 Who is entitled to input tax credits for creditable acquisitions? 26 11-25 How much are the input tax credits for creditable acquisitions? 26 11-30 Acquisitions that are partly creditable 26 11-99 Special rules relating to acquisitions 27 Part 2-3-Importations 29 Division 13-Taxable importations 29 13-1 What this Division is about 29 13-5 What are taxable importations? 29 13-10 Meaning of non-taxable importation 29 13-15 Who is liable for GST on taxable importations? 30 13-20 How much GST is payable on taxable importations? 30 13-25 The value of taxable importations that are partly non- taxable importations 31 13-99 Special rules relating to taxable importations 31 Division 15-Creditable importations 32 15-1 What this Division is about 32 15-5 What are creditable importations? 32 15-10 Meaning of creditable purpose 32 15-15 Who is entitled to input tax credits for creditable importations? 33 15-20 How much are the input tax credits for creditable importations? 33 15-25 Importations that are partly creditable 33 15-99 Special rules relating to creditable importations 34 Part 2-4-Net amounts and adjustments 35 Division 17-Net amounts and adjustments 35 17-1 What this Division is about 35 17-5 Net amounts 35 17-10 Adjustments 36 17-15 Working out net amounts using approved forms 36 17-20 Determinations relating to how to work out net amounts 36 17-99 Special rules relating to net amounts or adjustments 37 Division 19-Adjustment events 39 19-1 What this Division is about 39 19-5 Explanation of the effect of adjustment events 39 Subdivision 19-A-Adjustment events 40 19-10 Adjustment events 40 Subdivision 19-B-Adjustments for supplies 41 19-40 Where adjustments for supplies arise 41 19-45 Previously attributed GST amounts 42 19-50 Increasing adjustments for supplies 42 19-55 Decreasing adjustments for supplies 42 Subdivision 19-C-Adjustments for acquisitions 42 19-70 Where adjustments for acquisitions arise 42 19-75 Previously attributed input tax credit amounts 43 19-80 Increasing adjustments for acquisitions 43 19-85 Decreasing adjustments for acquisitions 44 19-99 Special rules relating to adjustment events 44 Division 21-Bad debts 45 21-1 What this Division is about 45 21-5 Writing off bad debts (taxable supplies) 45 21-10 Recovering amounts previously written off (taxable supplies) 45 21-15 Bad debts written off (creditable acquisitions) 46 21-20 Recovering amounts previously written off (creditable acquisitions) 46 21-99 Special rules relating to adjustments for bad debts 46 Part 2-5-Registration 48 Division 23-Who is required to be registered and who may be registered 48 23-1 Explanation of Division 48 23-5 Who is required to be registered 48 23-10 Who may be registered 49 23-15 The registration turnover threshold 49 23-99 Special rules relating to who is required to be registered or who may be registered 49 Division 25-How you become registered, and how your registration can be cancelled 50 Subdivision 25-A-How you become registered 50 25-1 When you must apply for registration 50 25-5 When the Commissioner must register you 50 25-10 The date of effect of your registration 51 25-15 Effect of backdating your registration 51 25-49 Special rules relating to registration 52 Subdivision 25-B-How your registration can be cancelled 52 25-50 When you must apply for cancellation of registration 52 25-55 When the Commissioner must cancel registration 52 25-57 When the Commissioner may cancel your registration 53 25-60 The date of effect of your cancellation 54 25-65 Effect of backdating your cancellation of registration 54 25-99 Special rules relating to cancellation of registration 55 Part 2-6-Tax periods 56 Division 27-How to work out the tax periods that apply to you 56 27-1 What this Division is about 56 27-5 General rule-3 month tax periods 56 27-10 Election of one month tax periods 56 27-15 Determination of one month tax periods 56 27-20 Withdrawing elections of one month tax periods 57 27-22 Revoking elections of one month tax periods 58 27-25 Revoking determinations of one month tax periods 58 27-30 Tax periods determined by the Commissioner to take account of changes in tax periods 59 27-35 Changing the days on which your tax periods end 59 27-37 Special determination of tax periods on request 60 27-38 Revoking special determination of tax periods 60 27-40 An entity's concluding tax period 61 27-99 Special rules relating to tax periods 61 Division 29-What is attributable to tax periods 62 29-1 What this Division is about 62 Subdivision 29-A-The attribution rules 62 29-5 Attributing the GST on your taxable supplies 62 29-10 Attributing the input tax credits for your creditable acquisitions 63 29-15 Attributing the input tax credits for your creditable importations 64 29-20 Attributing your adjustments 64 29-25 Commissioner may determine particular attribution rules 65 29-39 Special rules relating to attribution rules 66 Subdivision 29-B-Accounting on a cash basis 67 29-40 Choosing to account on a cash basis 67 29-45 Permission to account on a cash basis 67 29-50 Ceasing to account on a cash basis 68 29-69 Special rules relating to accounting on a cash basis 69 Subdivision 29-C-Tax invoices and adjustment notes 69 29-70 Tax invoices 69 29-75 Adjustment notes 70 29-80 Tax invoices and adjustment notes not required for low value transactions 71 29-99 Special rules relating to tax invoices and adjustment notes 71 Part 2-7-Returns, payments and refunds 72 Division 31-GST returns 72 31-1 What this Division is about 72 31-5 Who must give GST returns 72 31-8 When GST returns must be given-quarterly tax periods 72 31-10 When GST returns must be given-other tax periods 73 31-15 The form and contents of GST returns 73 31-20 Additional GST returns 74 31-25 Electronic lodgment of GST returns 74 31-99 Special rules relating to GST returns 75 Division 33-Payments of GST 76 33-1 What this Division is about 76 33-3 When payments of net amounts must be made-quarterly tax periods 76 33-5 When payments of net amounts must be made-other tax periods 77 33-10 How payments of net amounts are made 77 33-15 Payments of amounts of GST on importations 77 33-99 Special rules relating to payments of GST 78 Division 35-Refunds 79 35-1 What this Division is about 79 35-5 Entitlement to refund 79 35-10 When entitlement arises 79 35-99 Special rules relating to refunds 79 Part 2-8-Checklist of special rules 81 Division 37-Checklist of special rules 81 37-1 Checklist of special rules 81 Chapter 3-The exemptions 84 Part 3-1-Supplies that are not taxable supplies 84 Division 38-GST-free supplies 84 38-1 What this Division is about 84 Subdivision 38-A-Food 85 38-2 Food 85 38-3 Food that is not GST-free 85 38-4 Meaning of food 85 38-5 Premises used in supplying food 86 38-6 Packaging of food 86 Subdivision 38-B-Health 87 38-7 Medical services 87 38-10 Other health services 87 38-15 Other government funded health services 89 38-20 Hospital treatment 89 38-25 Residential care etc. 90 38-30 Community care etc. 92 38-35 Flexible care 93 38-40 Specialist disability services 93 38-45 Medical aids and appliances 93 38-47 Other GST-free health goods 93 38-50 Drugs and medicinal preparations etc. 94 38-55 Private health insurance etc. 95 Subdivision 38-C-Education 96 38-85 Education courses 96 38-90 Excursions or field trips 96 38-95 Course materials 96 38-97 Lease etc. of curriculum related goods 96 38-100 Supplies that are not GST-free 97 38-105 Accommodation at boarding schools etc. 97 38-110 Recognition of prior learning etc. 98 Subdivision 38-D-Child care 98 38-140 Child care-registered carers under the family assistance law 98 38-145 Child care-approved child care services under the family assistance law 99 38-150 Other child care 99 38-155 Supplies directly related to child care that is GST- free 99 Subdivision 38-E-Exports and other supplies for consumption outside Australia 99 38-185 Exports of goods 99 38-187 Lease etc. of goods for use outside Australia 102 38-188 Tooling used by non-residents to manufacture goods for export 102 38-190 Supplies of things, other than goods or real property, for consumption outside Australia 102 Subdivision 38-F-Religious services 104 38-220 Religious services 104 Subdivision 38-G-Activities of charitable institutions etc. 105 38-250 Nominal consideration etc. 105 38-255 Second-hand goods 106 38-260 Supplies of retirement village accommodation etc. 107 38-270 Raffles and bingo conducted by charitable institutions etc. 107 Subdivision 38-I-Water, sewerage and drainage 108 38-285 Water 108 38-290 Sewerage and sewerage-like services 109 38-295 Emptying of septic tanks 109 38-300 Drainage 109 Subdivision 38-J-Supplies of going concerns 109 38-325 Supply of a going concern 109 Subdivision 38-K-Transport and related matters 110 38-355 Supplies of transport and related matters 110 38-360 Travel agents arranging overseas supplies 112 Subdivision 38-L-Precious metals 112 38-385 Supplies of precious metals 112 Subdivision 38-M-Supplies through inwards duty free shops 112 38-415 Supplies through inwards duty free shops 112 Subdivision 38-N-Grants of land by governments 113 38-445 Grants of freehold and similar interests by governments 113 38-450 Leases preceding grants of freehold and similar interests by governments 113 Subdivision 38-O-Farm land 114 38-475 Subdivided farm land 114 38-480 Farm land supplied for farming 114 Subdivision 38-P-Cars for use by disabled people 115 38-505 Disabled veterans 115 38-510 Other disabled people 116 Subdivision 38-Q-International mail 117 38-540 International mail 117 Division 40-Input taxed supplies 118 40-1 What this Division is about 118 Subdivision 40-A-Financial supplies 118 40-5 Financial supplies 118 Subdivision 40-B-Residential rent 119 40-35 Residential rent 119 Subdivision 40-C-Residential premises 120 40-65 Sales of residential premises 120 40-70 Supplies of residential premises by way of long-term lease 120 40-75 Meaning of new residential premises 120 Subdivision 40-D-Precious metals 121 40-100 Precious metals 121 Subdivision 40-E-School tuckshops and canteens 122 40-130 School tuckshops and canteens 122 Subdivision 40-F-Fund-raising events conducted by charitable institutions etc. 122 40-160 Fund-raising events conducted by charitable institutions etc. 122 40-165 Meaning of fund-raising event 123 Part 3-2-Non-taxable importations 125 Division 42-Non-taxable importations 125 42-1 What this Division is about 125 42-5 Non-taxable importations-Schedule 4 to the Customs Tariff Act 1995 125 42-10 Goods returned to Australia in an unaltered condition 126 Chapter 4-The special rules 127 Division 45-Introduction 127 45-1 What this Chapter is about 127 45-5 The effect of special rules 127 Part 4-1-Special rules mainly about particular ways entities are organised 128 Division 48-GST groups 128 48-1 What this Division is about 128 Subdivision 48-A-Approval of GST groups 128 48-5 Approval of GST groups 128 48-10 Membership requirements of a GST group 129 48-15 Relationship of companies and non-companies in a GST group 130 Subdivision 48-B-Consequences of approval of GST groups 132 48-40 Who is liable for GST 132 48-45 Who is entitled to input tax credits 133 48-50 Adjustments 133 48-55 GST groups treated as single entities for certain purposes 134 48-60 GST returns 134 Subdivision 48-C-Administrative matters 135 48-70 Changing the membership etc. of GST groups 135 48-75 Revoking the approval of GST groups 135 48-80 Notification by representative members 136 48-85 Date of effect of approvals and revocations 136 48-90 Notification by the Commissioner 137 Subdivision 48-D-Ceasing to be a member of a GST group 137 48-110 Adjustments after you cease to be a member of a GST group 137 48-115 Changes in extent of creditable purpose after you cease to be a member of a GST group 137 Division 49-GST religious groups 139 49-1 What this Division is about 139 Subdivision 49-A-Approval of GST religious groups 139 49-5 Approval of GST religious groups 139 49-10 Membership requirements of a GST religious group 140 Subdivision 49-B-Consequences of approval of GST religious groups 140 49-30 Supplies between members of GST religious groups 140 49-35 Acquisitions between members of GST religious groups 140 49-40 Adjustment events 140 49-45 Changes in the extent of creditable purpose 141 49-50 GST religious groups treated as single entities for certain purposes 141 Subdivision 49-C-Administrative matters 142 49-70 Changing the membership etc. of GST religious groups 142 49-75 Revoking the approval of GST religious groups 142 49-80 Notification by principal members 143 49-85 Date of effect of approvals and revocations 143 49-90 Notification by the Commissioner 144 Division 50-GST treatment of religious practitioners 145 Guide to Division 50 145 50-1 What this Division is about 145 50-5 GST treatment of religious practitioners 145 Division 51-GST joint ventures 146 51-1 What this Division is about 146 Subdivision 51-A-Approval of GST joint ventures 146 51-5 Approval of GST joint ventures 146 51-10 Participation requirements of a GST joint venture 147 Subdivision 51-B-Consequences of approval of GST joint ventures 147 51-30 Who is liable for GST 147 51-35 Who is entitled to input tax credits 148 51-40 Adjustments 148 51-45 Additional net amounts relating to GST joint ventures 149 51-50 GST returns relating to GST joint ventures 150 51-52 Consolidation of GST returns relating to GST joint ventures 150 51-55 Payments of GST relating to GST joint ventures 151 51-60 Refunds relating to GST joint ventures 151 Subdivision 51-C-Administrative matters 152 51-70 Changing the participants etc. of GST joint ventures 152 51-75 Revoking the approval of GST joint ventures 153 51-80 Notification by joint venture operators 153 51-85 Date of effect of approvals and revocations 154 51-90 Notification by the Commissioner 154 Subdivision 51-D-Ceasing to be a participant in, or an operator of, a GST joint venture 154 51-110 Adjustments after you cease to be a participant in a GST joint venture 154 51-115 Changes in extent of creditable purpose after you cease to be a member of a GST joint venture 155 Division 54-GST branches 156 54-1 What this Division is about 156 Subdivision 54-A-Registration of GST branches 156 54-5 Registration of GST branches 156 54-10 The date of effect of registration of a GST branch 157 54-15 GST branch registration number 157 Subdivision 54-B-Consequences of registration of GST branches 157 54-40 Additional net amounts relating to GST branches 157 54-45 Net amounts of parent entities 158 54-50 Tax invoices and adjustment notes 159 54-55 GST returns relating to GST branches 159 54-60 Payments of GST relating to GST branches 160 54-65 Refunds relating to GST branches 160 Subdivision 54-C-Cancellation of registration of GST branches 160 54-70 When an entity must apply for cancellation of registration of a GST branch 160 54-75 When the Commissioner must cancel registration of a GST branch 161 54-80 The date of effect of cancellation of registration of a GST branch 161 54-85 Application of Subdivision 25-B 162 54-90 Effect on GST branches of cancelling the entity's registration 162 Division 57-Resident agents acting for non-residents 163 57-1 What this Division is about 163 57-5 Who is liable for GST 163 57-10 Who is entitled to input tax credits 163 57-15 Adjustments 163 57-20 Resident agents are required to be registered 164 57-25 Cancellation of registration of a resident agent 164 57-30 Notice of cessation of agency 164 57-35 Tax periods of resident agents 164 57-40 GST returns for non-residents 165 57-45 Resident agents giving GST returns 165 57-50 Non-residents that belong to GST groups 166 Division 60-Pre-establishment costs 167 60-1 What this Division is about 167 60-5 Input tax credit for acquisitions and importations before establishment 167 60-10 Registration etc. not needed for input tax credits 167 60-15 Pre-establishment acquisitions and importations 168 60-20 Creditable purpose 168 60-25 Attributing the input tax credit for pre-establishment acquisitions 169 60-30 Attributing the input tax credit for pre-establishment importations 170 60-35 Application of Division 129 170 Division 63-Non-profit sub-entities 171 63-1 What this Division is about 171 63-5 Entities that may choose to apply this Division 171 63-10 Period for which a choice has effect 172 63-15 Consequences of choosing to apply this Division 172 63-20 Non-profit sub-entities may register 173 63-25 Registration turnover threshold for non-profit sub- entities 173 63-30 When non-profit sub-entities must apply for cancellation of registration 173 63-35 When the Commissioner must cancel registration of non- profit sub-entities 173 63-40 Effect on adjustments of becoming a non-profit sub-entity 174 63-45 Effect on adjustments of ceasing to be a non-profit sub- entity 174 63-50 Membership requirements of GST groups 175 Part 4-2-Special rules mainly about supplies and acquisitions 176 Division 66-Second-hand goods 176 66-1 What this Division is about 176 Subdivision 66-A-Input tax credits for acquiring second-hand goods 176 66-5 Creditable acquisitions of second-hand goods 176 66-10 Amounts of input tax credits for creditable acquisitions of second-hand goods 177 66-15 Attributing input tax credits for creditable acquisitions of second-hand goods 177 66-17 Records of creditable acquisitions of second-hand goods 178 Subdivision 66-B-Acquisitions of second-hand goods that are divided for re-supply 179 66-40 Acquisitions of second-hand goods that can be used to offset GST on future re-supplies 179 66-45 Future re-supplies that are not taxable supplies 180 66-50 Future re-supplies on which GST is reduced 181 66-55 Records of acquisitions of second-hand goods to which this Subdivision applied 181 66-60 Input tax credits for acquiring second-hand goods the supply of which is not fully taxable 182 66-65 Total Subdivision 66-B credit amounts and Subdivision 66-B GST amounts 182 66-70 Commissioner may determine rules for applying this Subdivision 183 Division 69-Non-deductible expenses 184 69-1 What this Division is about 184 Subdivision 69-A-Non-deductible expenses generally 184 69-5 Non-deductible expenses do not give rise to creditable acquisitions or creditable importations 184 69-10 Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars 185 Subdivision 69-B-Elections for GST purposes relating to meal entertainment and entertainment facilities 186 69-15 What this Subdivision is about 186 69-20 Effect of elections on net amounts 187 69-25 Election to use the 50/50 split method for meal entertainment 187 69-30 Election to use the 12 week register method for meal entertainment 187 69-35 Election to use the 50/50 split method for entertainment facilities 188 69-40 When elections take effect 188 69-45 When elections cease to have effect 188 69-50 Adjustment events relating to elections 189 69-55 Adjustment notes not required 191 Division 70-Financial supplies (reduced credit acquisitions) 192 70-1 What this Division is about 192 70-5 Acquisitions that attract the reduced credit 192 70-10 Extended meaning of creditable purpose 192 70-15 How much are the reduced input tax credits? 193 70-20 Extent of creditable purpose 193 70-25 Sale of reduced credit acquisitions (Division 132) 194 Division 71-Fringe benefits provided by input taxed suppliers 196 71-1 What this Division is about 196 71-5 Acquisitions by input taxed suppliers to provide fringe benefits 196 71-10 Importations by input taxed suppliers to provide fringe benefits 196 Division 72-Associates 198 72-1 What this Division is about 198 Subdivision 72-A-Supplies without consideration 198 72-5 Taxable supplies without consideration 198 72-10 The value of taxable supplies without consideration 199 72-15 Attributing the GST to tax periods 199 Subdivision 72-B-Acquisitions without consideration 199 72-40 Creditable acquisitions without consideration 199 72-45 The amount of the input tax credit 199 72-50 Attributing the input tax credit to tax periods 200 Subdivision 72-C-Supplies for inadequate consideration 200 72-70 The value of taxable supplies for inadequate consideration 200 Subdivision 72-D-Application of this Division to certain sub-entities 201 72-90 GST branches 201 72-92 Non-profit sub-entities 201 72-95 Commonwealth government entities 201 72-100 State or Territory government entities 202 Division 75-Sale of freehold interests etc. 203 75-1 What this Division is about 203 75-5 Applying the margin scheme 203 75-10 The amount of GST on taxable supplies 205 75-11 Margins for supplies of real property in particular circumstances 208 75-12 Working out margins to take into account failure to pay full consideration 214 75-13 Working out margins to take into account supplies to associates 214 75-14 Consideration for acquisition of real property not to include cost of improvements etc. 215 75-15 Subdivided land 215 75-16 Margins for supplies of real property acquired through several acquisitions 215 75-20 Supplies under a margin scheme do not give rise to creditable acquisitions 216 75-22 Increasing adjustment relating to input tax credit entitlement 216 75-25 Adjustments relating to bad debts 218 75-27 Decreasing adjustment for later payment of consideration 218 75-30 Tax invoices not required for supplies of real property under the margin scheme 219 75-35 Approved valuations 219 Division 78-Insurance 220 78-1 What this Division is about 220 Subdivision 78-A-Insurers 220 78-5 GST on insurance premiums is exclusive of stamp duty 220 78-10 Decreasing adjustments for settlements of insurance claims 221 78-15 How to work out the decreasing adjustments 221 78-18 Increasing adjustments for payments of excess under insurance policies 223 78-20 Settlements of insurance claims do not give rise to creditable acquisitions 224 78-25 Supplies in settlement of claims are not taxable supplies 224 78-30 Acquisitions by insurers in the course of settling claims under non-taxable policies 224 78-35 Taxable supplies relating to rights of subrogation 225 78-40 Adjustment events relating to decreasing adjustments under this Division 225 78-42 Adjustment events relating to increasing adjustments under section 78-18 226 Subdivision 78-B-Insured entities etc. 226 78-45 Settlements of insurance claims do not give rise to taxable supplies 226 78-50 Settlements of insurance claims give rise to taxable supplies if entitlement to input tax credits is not disclosed 226 78-55 Payments of excess under insurance policies are not consideration for supplies 228 78-60 Supplies of goods to insurers in the course of settling claims 228 Subdivision 78-C-Third parties 228 78-65 Payments etc. to third parties by insurers 228 78-70 Payments etc. to third parties by insured entities 229 78-75 Creditable acquisitions relating to rights of subrogation 230 Subdivision 78-D-Insured entities that are not registered etc. 230 78-80 Net amounts 230 78-85 GST returns 230 78-90 Payments of GST 231 Subdivision 78-E-Statutory compensation schemes 231 78-95 GST on premiums etc. under statutory compensation schemes is exclusive of stamp duty 231 78-100 Settlements of claims for compensation under statutory compensation schemes 231 78-105 Meaning of statutory compensation scheme 232 Subdivision 78-F-Miscellaneous 233 78-110 Effect of judgments and court orders 233 78-115 Exclusion of certain Commonwealth, State or Territory insurance schemes 233 78-118 Portfolio transfers 233 78-120 HIH rescue package 234 Division 79-Compulsory third party schemes 236 79-1 What this Division is about 236 Subdivision 79-A-Modified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies 237 79-5 Application of sections 78-10 and 78-15 (about decreasing adjustments) where premium selection test is satisfied 237 79-10 Adjustment where operator becomes aware that correct input tax credit situation differs from basis on which premium selection test was satisfied 238 79-15 Application of sections 78-10 and 78-15 (about decreasing adjustments) where sole operator election to use average input tax credit entitlement 239 79-20 Extension of various references in Division 78 to rights of subrogation to cover other rights of recovery 241 Subdivision 79-B-Extension of Division 78 to cover certain compulsory third party scheme payments and supplies connected with, but not under, insurance policies 242 79-25 Meaning of CTP hybrid payment or supply 242 79-30 Application of Division 78 242 Subdivision 79-C-Other payments and supplies under compulsory third party schemes 243 79-35 Meaning of CTP compensation or ancillary payment or supply etc. 243 79-40 GST on CTP premiums is exclusive of stamp duty 244 79-45 Exclusion of certain compulsory third party schemes 244 79-50 Decreasing adjustments for CTP compensation or ancillary payments or supplies 245 79-55 Increasing adjustments for payments of excess etc. under compulsory third party schemes 245 79-60 Effect of settlements and payments under compulsory third party schemes 246 79-65 Taxable supplies relating to recovery by operators of compulsory third party schemes 247 79-70 Adjustment events relating to decreasing adjustments for operators of compulsory third party schemes 247 79-75 Adjustment events relating to increasing adjustments under section 79-55 248 79-80 Payments of excess under compulsory third party schemes are not consideration for supplies 248 79-85 Supplies of goods to operators in the course of settling claims 249 79-90 Effect of judgments and court orders 249 Subdivision 79-D-Compulsory third party scheme decreasing adjustments worked out using applicable average input tax credit fraction 250 79-95 How to work out decreasing adjustments using the applicable average input tax credit fraction 250 79-100 Meaning of average input tax credit fraction 252 Division 80-Settlement sharing arrangements 255 80-1 What this Division is about 255 Subdivision 80-A-Insurance policy settlement sharing arrangements 255 80-5 Meaning of insurance policy settlement sharing arrangement etc. 255 80-10 Effect of becoming parties to industry deeds or entering into settlement sharing arrangements 256 80-15 Effect of contributing operator's payment 256 80-20 Managing operator's payments or supplies 257 80-25 Contributing operator's payment 257 80-30 Managing operator's increasing adjustment where contributing operator's payment 258 80-35 Adjustment events relating to managing operator's payment or supply 259 Subdivision 80-B-Nominal defendant settlement sharing arrangements 260 80-40 Meaning of nominal defendant settlement sharing arrangement etc. 260 80-45 Nominal defendant settlement sharing arrangements to which this Subdivision applies 261 80-50 Effect of becoming parties to industry deeds or entering into nominal defendant settlement sharing arrangements 261 80-55 Effect of contributing operator's payment 261 80-60 Managing operator's payment or supply 261 80-65 Contributing operator's payment 262 80-70 Managing operator's increasing adjustment where contributing operator's payment 262 80-75 Adjustment events relating to managing operator's payment or supply 263 Subdivision 80-C-Hybrid settlement sharing arrangements 263 80-80 Meaning of hybrid settlement sharing arrangement etc. 263 80-85 Subdivision 80-A to apply to hybrid settlement sharing arrangement, subject to exceptions 264 80-90 Subdivision 80-B to apply to payments or supplies by managing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement 264 80-95 Subdivision 80-B to apply to payments or supplies by contributing operator of hybrid settlement sharing arrangement who is also managing operator of nominal defendant settlement sharing arrangement 265 Division 81-Payments of taxes, fees and charges 266 81-1 What this Division is about 266 81-5 Payments of taxes etc. can constitute consideration 266 81-10 Supplies need not be connected with Australia if the consideration is the payment of tax etc. 266 Division 82-Supplies in return for rights to develop land 267 82-1 What this Division is about 267 82-5 Supplies of rights to develop land do not constitute consideration in certain cases 267 82-10 Supplies by Australian government agencies of rights to develop land are not for consideration 267 Division 83-Non-residents making supplies connected with Australia 269 83-1 What this Division is about 269 83-5 "Reverse charge" on supplies made by non-residents 269 83-10 Recipients who are members of GST groups 269 83-15 Recipients who are participants in GST joint ventures 270 83-20 The amount of GST on "reverse charged" supplies made by non-residents 270 83-25 When non-residents must apply for registration 270 83-30 When the Commissioner must register non-residents 271 83-35 Tax invoices not required for "reverse charged" supplies made by non-residents 271 Division 84-Offshore supplies other than goods or real property 272 84-1 What this Division is about 272 84-5 Intangible supplies from offshore that are taxable supplies under this Division 272 84-10 "Reverse charge" on offshore intangible supplies 273 84-12 The amount of GST on offshore intangible supplies 273 84-13 The amount of input tax credits relating to offshore intangible supplies 273 84-14 Supplies relating to employee share ownership schemes 274 84-15 Transfers etc. between branches of the same entity 275 Division 85-Telecommunication supplies 276 85-1 What this Division is about 276 85-5 When telecommunication supplies are connected with Australia 276 85-10 Meaning of telecommunication supply 276 Division 87-Long-term accommodation in commercial residential premises 277 87-1 What this Division is about 277 87-5 Commercial residential premises that are predominantly for long-term accommodation 277 87-10 Commercial residential premises that are not predominantly for long-term accommodation 277 87-15 Meaning of commercial accommodation 278 87-20 Meaning of long-term accommodation etc. 278 87-25 Suppliers may choose not to apply this Division 279 Division 90-Company amalgamations 280 90-1 What this Division is about 280 90-5 Supplies not taxable-amalgamated company registered or required to be registered 280 90-10 Value of taxable supplies-amalgamated company not registered or required to be registered 280 90-15 Acquisitions not creditable-amalgamated company registered or required to be registered 280 90-20 Liability after amalgamation for GST on amalgamating company's supplies 281 90-25 Entitlement after amalgamation to input tax credits for amalgamating company's acquisitions 281 90-30 Adjustments 281 90-35 Amalgamating companies accounting on a cash basis 282 Division 96-Supplies partly connected with Australia 284 96-1 What this Division is about 284 96-5 Supplies that are only partly connected with Australia 284 96-10 The value of the taxable components of supplies that are only partly connected with Australia 285 Division 99-Deposits as security 286 99-1 What this Division is about 286 99-5 Giving a deposit as security does not constitute consideration 286 99-10 Attributing the GST relating to deposits that are forfeited etc. 286 Division 100-Vouchers 287 100-1 What this Division is about 287 100-5 Supplies of vouchers with a stated monetary value 287 100-10 Redemption of vouchers 288 100-12 Consideration on redemption of vouchers 288 100-15 Increasing adjustments for unredeemed vouchers 289 100-18 Arrangement for supply of voucher 289 100-20 Vouchers supplied to non-residents and redeemed by others in Australia 289 100-25 Meaning of voucher etc. 290 Division 102-Cancelled lay-by sales 291 102-1 What this Division is about 291 102-5 Cancelled lay-by sales 291 102-10 Attributing GST and input tax credits 291 Division 105-Supplies in satisfaction of debts 292 105-1 What this Division is about 292 105-5 Supplies by creditors in satisfaction of debts may be taxable supplies 292 105-10 Net amounts 293 105-15 GST returns 293 105-20 Payments of GST 293 Division 108-Valuation of taxable supplies of goods in bond 295 108-1 What this Division is about 295 108-5 Taxable supplies of goods in bond etc. 295 Division 110-Income tax-related transactions 296 110-1 What this Division is about 296 110-5 Transfers of tax losses and net capital losses 296 110-15 Supplies under operation of consolidated group regime 296 110-20 Tax sharing agreements-entering into agreement etc. 297 110-25 Tax sharing agreements-leaving group clear of group liability 297 110-30 Tax funding agreements 297 Division 111-Reimbursement of employees etc. 299 111-1 What this Division is about 299 111-5 Creditable acquisitions relating to reimbursements 299 111-10 Amounts of input tax credits relating to reimbursements 300 111-15 Tax invoices relating to reimbursements 301 111-18 Application of Division to volunteers working for charitable institutions etc. 301 111-20 Application of Division to recipients of certain withholding payments 302 111-25 Employers paying expenses of employees etc. 303 111-30 Reimbursements etc. of former or future employees etc. 303 Division 113-PAYG voluntary agreements 305 113-1 What this Division is about 305 113-5 Supply of work or services not a taxable supply 305 Part 4-3-Special rules mainly about importations 307 Division 114-Importations without entry for home consumption 307 114-1 What this Division is about 307 114-5 Importations without entry for home consumption [see Note 2] 307 114-10 Goods that have already been entered for home consumption etc. 309 114-15 Payments of amounts of GST where security for payment of customs duty is forfeited 310 114-20 Payments of amounts of GST where delivery into home consumption is authorised under section 71 of the Customs Act 310 114-25 Warehoused goods entered for home consumption by an entity other than the importer 310 Division 117-Valuation of re-imported goods 312 117-1 What this Division is about 312 117-5 Valuation of taxable importations of goods that were exported for repair or renovation 312 117-10 Valuation of taxable importations of live animals that were exported 313 117-15 Refunds of GST on certain re-importations of live animals 313 Part 4-4-Special rules mainly about net amounts and adjustments 315 Division 123-Simplified accounting methods for retailers and small enterprise entities 315 123-1 What this Division is about 315 123-5 Commissioner may determine simplified accounting methods 315 123-7 Meaning of small enterprise entity 316 123-10 Choosing to apply a simplified accounting method 316 123-15 Net amounts 317 Division 126-Gambling 318 126-1 What this Division is about 318 126-5 Global accounting system for gambling supplies 318 126-10 Global GST amounts 319 126-15 Losses carried forward 319 126-20 Bad debts 320 126-25 Application of Subdivision 9-C 320 126-30 Gambling supplies do not give rise to creditable acquisitions 320 126-32 Repayments of gambling losses are not consideration 320 126-33 Tax invoices not required for gambling supplies 321 126-35 Meaning of gambling supply and gambling event 321 Division 129-Changes in the extent of creditable purpose 322 129-1 What this Division is about 322 Subdivision 129-A-General 322 129-5 Adjustments arising under this Division 322 129-10 Adjustments do not arise under this Division for acquisitions and importations below a certain value 323 129-15 Adjustments do not arise under this Division where there are adjustments under Division 130 323 Subdivision 129-B-Adjustment periods 323 129-20 Adjustment periods 323 129-25 Effect on adjustment periods of things being disposed of etc. 325 Subdivision 129-C-When adjustments for acquisitions and importations arise 326 129-40 Working out whether you have an adjustment 326 129-45 Gifts to gift-deductible entities 327 129-50 Creditable purpose 328 129-55 Meaning of apply 328 Subdivision 129-D-Amounts of adjustments for acquisitions and importations 329 129-70 The amount of an increasing adjustment 329 129-75 The amount of a decreasing adjustment 329 129-80 Effect of adjustment under Division 19 or 21 330 Subdivision 129-E-Attributing adjustments under this Division 330 129-90 Attributing your adjustments for changes in extent of creditable purpose 330 Division 130-Goods applied solely to private or domestic use 331 130-1 What this Division is about 331 130-5 Goods applied solely to private or domestic use 331 Division 131-Annual apportionment of creditable purpose 332 131-1 What this Division is about 332 Subdivision 131-A-Electing to have annual apportionment 332 131-5 Eligibility to make an annual apportionment election 332 131-10 Making an annual apportionment election 333 131-15 Annual apportionment elections by representative members of GST groups 333 131-20 Duration of an annual apportionment election 333 Subdivision 131-B-Consequences of electing to have annual apportionment 335 131-40 Input tax credits for acquisitions that are partly creditable 335 131-45 Input tax credits for importations that are partly creditable 336 131-50 Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars 337 131-55 Increasing adjustments relating to annually apportioned acquisitions and importations 337 131-60 Attributing adjustments under section 131-55 339 Division 132-Supplies of things acquired etc. without full input tax credits 341 132-1 What this Division is about 341 132-5 Decreasing adjustments for supplies of things acquired, imported or applied for a purpose that is not fully creditable 341 132-10 Attribution of adjustments under this Division 342 Division 135-Supplies of going concerns 344 135-1 What this Division is about 344 135-5 Initial adjustments for supplies of going concerns 344 135-10 Later adjustments for supplies of going concerns 344 Division 136-Bad debts relating to transactions that are not taxable or creditable to the fullest extent 346 136-1 What this Division is about 346 Subdivision 136-A-Bad debts relating to partly taxable or creditable transactions 346 136-5 Adjustments relating to partly taxable supplies 346 136-10 Adjustments in relation to partly creditable acquisitions 347 Subdivision 136-B-Bad debts relating to transactions that are taxable or creditable at less than 1/11 of the price 348 136-30 Writing off bad debts (taxable supplies) 348 136-35 Recovering amounts previously written off (taxable supplies) 349 136-40 Bad debts written off (creditable acquisitions) 350 136-45 Recovering amounts previously written off (creditable acquisitions) 351 136-50 Meanings of taxable at less than 1/11 of the price and creditable at less than 1/11 of the consideration 353 Division 137-Stock on hand on becoming registered etc. 354 137-1 What this Division is about 354 137-5 Adjustments for stock on hand on becoming registered etc. 354 Division 138-Cessation of registration 355 138-1 What this Division is about 355 138-5 Adjustments for cessation of registration 355 138-10 Attributing adjustments for cessation of registration 356 138-15 Ceasing to be registered-amounts not previously attributed 356 138-17 Situations to which this Division does not apply 357 138-20 Application of Division 129 358 Division 139-Distributions from deceased estates 359 139-1 What this Division is about 359 139-5 Adjustments for distributions from deceased estates 359 139-10 Attributing adjustments for distributions from deceased estates 360 139-15 Application of Division 129 360 Division 141-Tradex scheme goods 361 141-1 What this Division is about 361 141-5 Adjustments for applying goods contrary to the Tradex Scheme 361 141-10 Meaning of tradex scheme goods etc. 362 141-15 Attribution of adjustments under this Division 362 141-20 Application of Division 129 362 Part 4-5-Special rules mainly about registration 363 Division 144-Taxis 363 144-1 What this Division is about 363 144-5 Requirement to register 363 Division 147-Representatives of incapacitated entities 364 147-1 What this Division is about 364 147-5 Representatives are required to be registered 364 147-10 Cancellation of registration of a representative 364 147-15 Notice of cessation of representation 364 147-20 Adjustments 365 147-25 Tax periods of representatives 365 Division 149-Government entities 366 149-1 What this Division is about 366 149-5 Government entities may register 366 149-10 Government entities are not required to be registered 366 149-15 This Act applies to registered government entities 367 149-20 Government entities not required to cancel their registration 367 149-25 Membership requirements of a government GST group 367 Part 4-6-Special rules mainly about tax periods 368 Division 151-Annual tax periods 368 151-1 What this Division is about 368 Subdivision 151-A-Electing to have annual tax periods 368 151-5 Eligibility to make an annual tax period election 368 151-10 Making an annual tax period election 369 151-15 Annual tax period elections by representative members of GST groups 369 151-20 When you must make your annual tax period election 369 151-25 Duration of an annual tax period election 370 Subdivision 151-B-Consequences of electing to have annual tax periods 372 151-40 Annual tax periods 372 151-45 When GST returns for annual tax periods must be given 372 151-50 When payments of net amounts for annual tax periods must be made 373 151-55 An entity's concluding annual tax period 373 151-60 The effect of bankruptcy, liquidation or receivership etc. 373 151-65 The effect of changing the membership of GST groups- end of the annual tax period 374 151-70 The effect of changing the membership of GST groups- tax periods for the remainder of a financial year 375 Division 153-Agents and insurance brokers 376 153-1 What this Division is about 376 Subdivision 153-A-General 376 153-5 Attributing the input tax credits for your creditable acquisitions 376 153-10 Attributing your adjustments 377 153-15 Tax invoices 377 153-20 Adjustment notes 378 153-25 Insurance supplied through insurance brokers 378 Subdivision 153-B-Principals and agents as separate suppliers or acquirers 378 153-50 Arrangements under which agents are treated as suppliers or acquirers 378 153-55 The effect of these arrangements on supplies 379 153-60 The effect of these arrangements on acquisitions 380 153-65 Determinations that supplies or acquisitions are taken to be under these arrangements 381 Division 156-Supplies and acquisitions made on a progressive or periodic basis 383 156-1 What this Division is about 383 156-5 Attributing the GST on progressive or periodic supplies 383 156-10 Attributing the input tax credits on progressive or periodic acquisitions 383 156-15 Progressive or periodic supplies partly connected with Australia 384 156-20 Application of Division 129 to progressive or periodic acquisitions 384 156-22 Leases etc. treated as being on a progressive or periodic basis 384 156-25 Accounting on a cash basis 385 Division 157-Accounting basis of charitable institutions etc. 386 157-1 What this Division is about 386 157-5 Charitable institutions etc. choosing to account on a cash basis 386 157-10 Charitable institutions etc. ceasing to account on a cash basis 387 Division 159-Changing your accounting basis 388 159-1 What this Division is about 388 159-5 Ceasing to account on a cash basis-amounts not previously attributed 388 159-10 Ceasing to account on a cash basis-amounts partly attributed 389 159-15 Ceasing to account on a cash basis-bad debts 390 159-20 Starting to account on a cash basis 391 159-25 Starting to account on a cash basis-bad debts 391 159-30 Entities ceasing to exist or coming into existence 391 Part 4-7-Special rules mainly about returns, payments and refunds 392 Division 162-Payment of GST by instalments 392 162-1 What this Division is about 392 Subdivision 162-A-Electing to pay GST by instalments 392 162-5 Eligibility to elect to pay GST by instalments 392 162-10 Your current GST lodgment record 394 162-15 Electing to pay GST by instalments 394 162-20 Elections by representative members of GST groups 395 162-25 When you must make your election 395 162-30 Duration of your election 396 Subdivision 162-B-Consequences of electing to pay GST by instalments 398 162-50 GST instalment payers 398 162-55 Tax periods for GST instalment payers 398 162-60 When GST returns for GST instalment payers must be given 398 162-65 The form and contents of GST returns for GST instalment payers 399 162-70 Payment of GST instalments 399 162-75 Giving notices relating to GST instalments 400 162-80 Certain entities pay only 2 GST instalments for each year 401 162-85 A GST instalment payer's concluding tax period 401 162-90 The effect of bankruptcy, liquidation or receivership etc. 402 162-95 The effect of changing the membership of GST groups 403 162-100 General interest charge on late payment 403 162-105 Net amounts for GST instalment payers 404 162-110 When payments of net amounts must be made-GST instalment payers 404 Subdivision 162-C-GST instalments 404 162-130 What are your GST instalments 404 162-135 Notified instalment amounts 405 162-140 Varied instalment amounts 406 162-145 Your annual GST liability 407 Subdivision 162-D-Penalty payable in certain cases if varied instalment amounts are too low 407 162-170 What this Subdivision is about 407 162-175 GST payments are less than 85% of annual GST liability 408 162-180 Estimated annual GST amount is less than 85% of annual GST liability 410 162-185 Shortfall in GST instalments worked out on the basis of estimated annual GST amount 411 162-190 Periods for which penalty is payable 412 162-195 Reduction in penalties if notified instalment amount is less than 25% of annual GST liability 413 162-200 Reduction in penalties if GST instalment shortfall is made up in a later instalment 414 162-205 This Subdivision does not create a liability for general interest charge 415 Division 165-Anti-avoidance 416 165-1 What this Division is about 416 Subdivision 165-A-Application of this Division 417 165-5 When does this Division operate? 417 165-10 When does an entity get a GST benefit from a scheme? 418 165-15 Matters to be considered in determining purpose or effect 419 Subdivision 165-B-Commissioner may negate effects of schemes for GST benefits 420 165-40 Commissioner may negate avoider's GST benefits 420 165-45 Commissioner may reduce an entity's net amount or GST to compensate 421 165-50 GST or refund payable in accordance with declaration 422 165-55 Commissioner may disregard scheme in making declarations 422 165-60 One declaration may cover several tax periods and importations 423 165-65 Commissioner must give copy of declaration to entity affected 423 Division 168-Tourist refund scheme 424 168-1 What this Division is about 424 168-5 Tourist refund scheme 424 Division 171-Customs security etc. given on taxable importations 425 171-1 What this Division is about 425 171-5 Security or undertaking given under section 162 or 162A of the Customs Act 425 Chapter 5-Miscellaneous 427 Part 5-1-Miscellaneous 427 Division 176-Endorsement of charitable institutions etc. 427 176-1 Endorsement by Commissioner as charitable institution 427 176-5 Endorsement by Commissioner as trustee of a charitable fund 427 Division 177-Miscellaneous 428 177-1 Commonwealth etc. not liable to pay GST 428 177-3 Acquisitions from State or Territory bodies where GST liability is notional 429 177-5 Cancellation of exemptions from GST 429 177-10 Ministerial determinations 429 177-11 Delegation by Aged Care Secretary 430 177-12 GST implications of references to price, value etc. in other Acts 431 177-15 Regulations 431 Chapter 6-Interpreting this Act 432 Part 6-1-Rules for interpreting this Act 432 Division 182-Rules for interpreting this Act 432 182-1 What forms part of this Act 432 182-5 What does not form part of this Act 432 182-10 Explanatory sections, and their role in interpreting this Act 433 182-15 Schedules 1, 2 and 3 433 Part 6-2-Meaning of some important concepts 434 Division 184-Meaning of entity 434 184-1 Entities 434 184-5 Supplies etc. by partnerships and other unincorporated bodies 435 Division 188-Meaning of GST turnover 436 188-1 What this Division is about 436 188-5 Explanation of the turnover thresholds 436 188-10 Whether your GST turnover meets, or does not exceed, a turnover threshold 437 188-15 Current GST turnover 438 188-20 Projected GST turnover 439 188-22 Settlements of insurance claims to be disregarded 440 188-23 Supplies "reverse charged" under Division 83 not to be included in a recipient's GST turnover 440 188-24 Supplies to which Subdivision 153-B applies 440 188-25 Transfer of capital assets, and termination etc. of enterprise, to be disregarded 441 188-30 The value of non-taxable supplies 441 188-32 The value of gambling supplies 441 188-35 The value of loans 442 188-40 Supplies of employee services by overseas entities to be disregarded for the registration turnover threshold 442 Division 189-Exceeding the financial acquisitions threshold 443 189-1 What this Division is about 443 189-5 Exceeding the financial acquisitions threshold-current acquisitions 443 189-10 Exceeding the financial acquisitions threshold- future acquisitions 444 189-15 Meaning of financial acquisition 445 Division 190-90% owned groups of companies 446 190-1 90% owned groups 446 190-5 When a company has at least a 90% stake in another company 446 Part 6-3-Dictionary 447 Division 195-Dictionary 447 195-1 Dictionary 447 Schedule 1-Food that is not GST-free 487 1 Food that is not GST-free 487 2 Prepared food, bakery products and biscuit goods 488 3 Prepared meals 489 4 Candied peel 489 5 Goods that are not biscuit goods 489 Schedule 2-Beverages that are GST-free 490 1 Beverages that are GST-free 490 2 Tea, coffee etc. 491 3 Fruit and vegetable juices 491 Schedule 3-Medical aids and appliances 492 Notes 499 An Act about a goods and services tax to implement A New Tax System, and for related purposes Chapter 1-Introduction Part 1-1-Preliminary Division 1-Preliminary 1-1 Short title [see Note 1] This Act may be cited as the A New Tax System (Goods and Services Tax) Act 1999. 1-2 Commencement (1) This Act commences on 1 July 2000. 1-3 Commonwealth-State financial relations The Parliament acknowledges that the Commonwealth: (a) will introduce legislation to provide that the revenue from the GST will be granted to the States, the Australian Capital Territory and the Northern Territory; and (b) will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth- State Financial Relations endorsed at the Special Premiers' Conference in Canberra on 13 November 1998. 1-4 States and Territories are bound by the GST law The *GST law binds the Crown in right of each of the States, of the Australian Capital Territory and of the Northern Territory. However, it does not make the Crown liable to be prosecuted for an offence. Part 1-2-Using this Act Division 2-Overview of the GST legislation 2-1 What this Act is about This Act is about the GST. It begins (in Chapter 2) with the basic rules about the GST, and then sets out in Chapter 3 the exemptions from the GST and in Chapter 4 the special rules that can apply in particular cases. It concludes with definitions and other interpretative material. Note: The GST is imposed by 6 Acts, the most important of which are: (a) the A New Tax System (Goods and Services Tax Imposition- General) Act 1999; and (b) the A New Tax System (Goods and Services Tax Imposition- Customs) Act 1999; and (c) the A New Tax System (Goods and Services Tax Imposition- Excise) Act 1999. 2-5 The basic rules (Chapter 2) Chapter 2 has the basic rules for the GST, including: when and how the GST arises, and who is liable to pay it; when and how input tax credits arise, and who is entitled to them; how to work out payments and refunds of GST; when and how the payments and refunds are to be made. 2-10 The exemptions (Chapter 3) Chapter 3 sets out the supplies and importations that are GST- free or input taxed. 2-15 The special rules (Chapter 4) Chapter 4 has special rules which, in particular cases, have the effect of modifying the basic rules in Chapter 2. Note: There is a checklist of special rules at the end of Chapter 2 (in Part 2-8). 2-20 Miscellaneous (Chapter 5) Chapter 5 deals with miscellaneous matters. 2-25 Interpretative provisions (Chapter 6) Chapter 6 contains the Dictionary, which sets out a list of all the terms that are defined in this Act. It also sets out the meanings of some important concepts and rules on how to interpret this Act. 2-30 Administration, collection and recovery provisions in the Taxation Administration Act 1953 Parts 3-10 and 4-15 in Schedule 1 to the Taxation Administration Act 1953 contain provisions relating to the administration of the GST, and to collection and recovery of amounts of GST. Division 3-Defined terms 3-1 When defined terms are identified (1) Many of the terms used in the law relating to the GST are defined. (2) Most defined terms in this Act are identified by an asterisk appearing at the start of the term: as in "*enterprise". The footnote that goes with the asterisk contains a signpost to the Dictionary definitions starting at section 195-1. 3-5 When terms are not identified (1) Once a defined term has been identified by an asterisk, later occurrences of the term in the same subsection are not usually asterisked. (2) Terms are not asterisked in the non-operative material contained in this Act. Note: The non-operative material is described in Division 4. (3) The following basic terms used throughout the Act are not identified with an asterisk. |Common definitions that are not| |asterisked | |Item |This term: | |1 |acquisition | |2 |amount | |3 |Australia | |4 |Commissioner | |5 |entity | |6 |goods | |7 |GST | |8 |import | |8A |individual | |9 |input tax credit | |10 |tax period | |11 |thing | |12 |supply | |13 |you | 3-10 Identifying the defined term in a definition Within a definition, the defined term is identified by bold italics. Division 4-Status of Guides and other non-operative material 4-1 Non-operative material In addition to the operative provisions themselves, this Act contains other material to help you identify accurately and quickly the provisions that are relevant to you and to help you understand them. This other material falls into 2 main categories. 4-5 Explanatory sections One category is the explanatory section in many Divisions. Under the section heading "What this Division is about", a short explanation of the Division appears in boxed text. Explanatory sections form part of this Act but are not operative provisions. In interpreting an operative provision, explanatory sections may only be considered for limited purposes. They are set out in section 182-10. 4-10 Other material The other category consists of material such as notes and examples. These also form part of the Act. They are distinguished by type size from the operative provisions (except for formulas), but are not kept separate from them. Chapter 2-The basic rules Division 5-Introduction 5-1 What this Chapter is about This Chapter sets out the basic rules for the GST. In particular, these rules will tell you: . where liability for GST arises; . where entitlements to input tax credits arise; . how the amounts of GST and input tax credits are combined to work out the amount payable by you or to you; . when and how that amount is to be paid. 5-5 The structure of this Chapter The diagram on the next page shows how the basic rules in this Chapter relate to each other. It also shows their relationship with: . the exemptions (Chapter 3)-these provisions exempt from the GST what would otherwise be taxable; and . the special rules (Chapter 4)-these provisions modify the basic rules in particular situations, often in quite limited ways. [pic] Part 2-1-The central provisions Division 7-The central provisions 7-1 GST and input tax credits (1) GST is payable on *taxable supplies and *taxable importations. (2) Entitlements to input tax credits arise on *creditable acquisitions and *creditable importations. For taxable supplies and creditable acquisitions, see Part 2-2. For taxable importations and creditable importations, see Part 2-3. 7-5 Net amounts Amounts of GST and amounts of input tax credits are set off against each other to produce a *net amount for a tax period (which may be altered to take account of *adjustments). For net amounts (including adjustments to net amounts), see Part 2- 4. 7-10 Tax periods Every entity that is *registered, or *required to be registered, has tax periods applying to it. For registration, see Part 2-5. For tax periods, see Part 2-6. 7-15 Payments and refunds The *net amount for a tax period is the amount that the entity must pay to the Commonwealth, or the Commonwealth must refund to the entity, in respect of the period. For payments and refunds (and GST returns), see Part 2-7. Note: Refunds may be set off against your other liabilities (if any) under laws administered by the Commissioner. Part 2-2-Supplies and acquisitions Division 9-Taxable supplies Table of Subdivisions 9-A What are taxable supplies? 9-B Who is liable for GST on taxable supplies? 9-C How much GST is payable on taxable supplies? 9-1 What this Division is about GST is payable on taxable supplies. This Division defines taxable supplies, states who is liable for the GST, and describes how to work out the GST on supplies. Subdivision 9-A-What are taxable supplies? 9-5 Taxable supplies You make a taxable supply if: (a) you make the supply for *consideration; and (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and (c) the supply is *connected with Australia; and (d) you are *registered, or *required to be registered. However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed. 9-10 Meaning of supply (1) A supply is any form of supply whatsoever. (2) Without limiting subsection (1), supply includes any of these: (a) a supply of goods; (b) a supply of services; (c) a provision of advice or information; (d) a grant, assignment or surrender of *real property; (e) a creation, grant, transfer, assignment or surrender of any right; (f) a *financial supply; (g) an entry into, or release from, an obligation: (i) to do anything; or (ii) to refrain from an act; or (iii) to tolerate an act or situation; (h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g). (3) It does not matter whether it is lawful to do, to refrain from doing or to tolerate the act or situation constituting the supply. (3A) For the avoidance of doubt, the delivery of: (a) livestock for slaughtering or processing into *food; or (b) game for processing into *food; under an arrangement under which the entity making the delivery only relinquishes title after food has been produced, is the supply of the livestock or game (regardless of when the entity relinquishes title). The supply does not take place on or after the subsequent relinquishment of title. (4) However, a supply does not include a supply of *money unless the money is provided as *consideration for a supply that is a supply of money. 9-15 Consideration (1) Consideration includes: (a) any payment, or any act or forbearance, in connection with a supply of anything; and (b) any payment, or any act or forbearance, in response to or for the inducement of a supply of anything. (2) It does not matter whether the payment, act or forbearance was voluntary, or whether it was by the *recipient of the supply. (2A) It does not matter: (a) whether the payment, act or forbearance was in compliance with an order of a court, or of a tribunal or other body that has the power to make orders; or (b) whether the payment, act or forbearance was in compliance with a settlement relating to proceedings before a court, or before a tribunal or other body that has the power to make orders. (2B) For the avoidance of doubt, the fact that the supplier is an entity of which the *recipient of the supply is a member, or that the supplier is an entity that only makes supplies to its members, does not prevent the payment, act or forbearance from being consideration. (3) However: (a) if a right or option to acquire a thing is granted, then: (i) the consideration for the supply of the thing on the exercise of the right or option is limited to any additional consideration provided either for the supply or in connection with the exercise of the right or option; or (ii) if there is no such additional consideration-there is no consideration for the supply; and (b) making a gift to a non-profit body is not the provision of consideration; and (c) a payment made by a *government related entity to another government related entity is not the provision of consideration if the payment is specifically covered by an appropriation under an *Australian law. 9-20 Enterprises (1) An enterprise is an activity, or series of activities, done: (a) in the form of a *business; or (b) in the form of an adventure or concern in the nature of trade; or (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property; or (d) by the trustee of a fund that is covered by, or by an authority or institution that is covered by, Subdivision 30-B of the Income Tax Assessment Act 1997 and to which deductible gifts can be made; or (da) by a trustee of a *complying superannuation fund or, if there is no trustee of the fund, by a person who manages the fund; or (e) by a charitable institution or by a trustee of a charitable fund; or (f) by a religious institution; or (g) by the Commonwealth, a State or a Territory, or by a body corporate, or corporation sole, established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or (h) by a trustee of a fund covered by item 2 of the table in section 30-15 of the ITAA 1997 or of a fund that would be covered by that item if it had an ABN. (2) However, enterprise does not include an activity, or series of activities, done: (a) by a person as an employee or in connection with earning *withholding payments covered by subsection (4) (unless the activity or series is done in supplying services as the holder of an office that the person has accepted in the course of or in connection with an activity or series of activities of a kind mentioned in subsection (1)); or Note: Acts done as mentioned in paragraph (a) will still form part of the activities of the enterprise to which the person provides work or services. (b) as a private recreational pursuit or hobby; or (c) by an individual (other than a trustee of a charitable fund, or of a fund covered by item 2 of the table in section 30-15 of the ITAA 1997 or of a fund that would be covered by that item if it had an ABN), or a *partnership (all or most of the members of which are individuals), without a reasonable expectation of profit or gain; or (d) as a member of a local governing body established by or under a *State law or *Territory law (except a local governing body to which paragraph 12-45(1)(e) in Schedule 1 to the Taxation Administration Act 1953 applies). (3) For the avoidance of doubt, the fact that activities of an entity are limited to making supplies to members of the entity does not prevent those activities: (a) being in the form of a *business within the meaning of paragraph (1)(a); or (b) being in the form of an adventure or concern in the nature of trade within the meaning of paragraph (1)(b). (4) This subsection covers a *withholding payment covered by any of the provisions in Schedule 1 to the Taxation Administration Act 1953 listed in the table. |Withholding payments covered | |Item |Provision |Subject matter | |1 |Section 12-35|Payment to employee | |2 |Section 12-40|Payment to company director | |3 |Section 12-45|Payment to office holder | |4 |Section 12-60|Payment under labour hire | | | |arrangement, or specified by | | | |regulations | 9-25 Supplies connected with Australia Supplies of goods wholly within Australia (1) A supply of goods is connected with Australia if the goods are delivered, or made available, in Australia to the *recipient of the supply. Supplies of goods from Australia (2) A supply of goods that involves the goods being removed from Australia is connected with Australia. Supplies of goods to Australia (3) A supply of goods that involves the goods being brought to Australia is connected with Australia if the supplier either: (a) imports the goods into Australia; or (b) installs or assembles the goods in Australia. Supplies of real property (4) A supply of *real property is connected with Australia if the real property, or the land to which the real property relates, is in Australia. Supplies of anything else (5) A supply of anything other than goods or *real property is connected with Australia if: (a) the thing is done in Australia; or (b) the supplier makes the supply through an *enterprise that the supplier *carries on in Australia; or (c) all of the following apply: (i) neither paragraph (a) nor (b) applies in respect of the thing; (ii) the thing is a right or option to acquire another thing; (iii) the supply of the other thing would be connected with Australia. Example: A holiday package for Australia that is supplied overseas might be connected with Australia under paragraph (5)(c). When enterprises are carried on in Australia (6) An *enterprise is carried on in Australia if the enterprise is carried on through: (a) a permanent establishment (as defined in subsection 6(1) of the Income Tax Assessment Act 1936); or (b) a place that would be such a permanent establishment if paragraph (e), (f) or (g) of that definition did not apply. 9-30 Supplies that are GST-free or input taxed GST-free (1) A supply is GST-free if: (a) it is GST-free under Division 38 or under a provision of another Act; or (b) it is a supply of a right to receive a supply that would be GST- free under paragraph (a). Input taxed (2) A supply is input taxed if: (a) it is input taxed under Division 40 or under a provision of another Act; or (b) it is a supply of a right to receive a supply that would be input taxed under paragraph (a). Note: If a supply is input taxed, there is no entitlement to an input tax credit for the things that are acquired or imported to make the supply (see sections 11-15 and 15-10). Supplies that would be both GST-free and input taxed (3) To the extent that a supply would, apart from this subsection, be both *GST-free and *input taxed: (a) the supply is GST-free and not input taxed, unless the provision under which it is input taxed requires the supplier to have chosen for its supplies of that kind to be input taxed; or (b) the supply is input taxed and not GST-free, if that provision requires the supplier to have so chosen. Note: Subdivisions 40-E (School tuckshops and canteens) and 40-F (Fund-raising events conducted by charitable institutions etc.) require such a choice.) Supply of things used solely in connection with making supplies that are input taxed but not financial supplies (4) A supply is taken to be a supply that is *input taxed if it is a supply of anything (other than *new residential premises) that you have used solely in connection with your supplies that are input taxed but are not *financial supplies. 9-39 Special rules relating to taxable supplies Chapter 4 contains special rules relating to taxable supplies, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Agents and insurance |Division 153| | |brokers | | |1 |Associates |Division 72 | |2 |Cancelled lay-by sales |Division 102| |3 |Company amalgamations |Division 90 | |3A |Compulsory third party |Division 79 | | |schemes | | |4 |Deposits as security |Division 99 | |5 |Gambling |Division 126| |5A |GST religious groups |Division 49 | |5B |Income tax-related |Division 110| | |transactions | | |6 |Insurance |Division 78 | |7 |Offshore supplies other |Division 84 | | |than goods or real property| | |8 |Payments of taxes, fees and|Division 81 | | |charges | | |8A |Second-hand goods |Division 66 | |8B |Settlement sharing |Division 80 | | |arrangements | | |9 |Supplies and acquisitions |Division 156| | |made on a progressive or | | | |periodic basis | | |9A |Supplies in return for |Division 82 | | |rights to develop land | | |10 |Supplies in satisfaction of|Division 105| | |debts | | |11 |Supplies partly connected |Division 96 | | |with Australia | | |12 |Supply under arrangement |Division 113| | |covered by PAYG voluntary | | | |agreement | | |13 |Telecommunication supplies |Division 85 | |14 |Vouchers |Division 100| Subdivision 9-B-Who is liable for GST on taxable supplies? 9-40 Liability for GST on taxable supplies You must pay the GST payable on any *taxable supply that you make. 9-69 Special rules relating to liability for GST on taxable supplies Chapter 4 contains special rules relating to liability for GST on taxable supplies, as follows: |Checklist of special rules | | |Item|For this case ... |See: | |1 |Company amalgamations |Division 90 | |2 |GST groups |Division 48 | |3 |GST joint ventures |Division 51 | |4 |Offshore supplies other |Division 84 | | |than goods or real property| | |4A |Non-residents making |Division 83 | | |supplies connected with | | | |Australia | | |5 |Resident agents acting for |Division 57 | | |non-residents | | Subdivision 9-C-How much GST is payable on taxable supplies? 9-70 The amount of GST on taxable supplies The amount of GST on a *taxable supply is 10% of the *value of the taxable supply. 9-75 The value of taxable supplies (1) The value of a *taxable supply is as follows: [pic] where: price is the sum of: (a) so far as the *consideration for the supply is consideration expressed as an amount of *money-the amount (without any discount for the amount of GST (if any) payable on the supply); and (b) so far as the consideration is not consideration expressed as an amount of money-the *GST inclusive market value of that consideration. Example: You make a taxable supply by selling a car for $22,000 in the course of carrying on an enterprise. The value of the supply is: [pic] The GST on the supply is therefore $2,000 (i.e. 10% of $20,000). (2) However, if the taxable supply is of a *luxury car, the value of the taxable supply is as follows: [pic] where: luxury car tax value has the meaning given by section 5-20 of the A New Tax System (Luxury Car Tax) Act 1999. (3) In working out under subsection (1) the value of a *taxable supply made in a *tax period, being a supply that is a *fringe benefit, the price is taken to be the sum of: (a) to the extent that, apart from this subsection, paragraph (a) of the definition of price in subsection (1) would be applicable: (i) if the fringe benefit is a car fringe benefit-so much of the amount that would be worked out under that paragraph as represented the *recipient's payment made in that period; or (ii) if the fringe benefit is a benefit other than a car fringe benefit-so much of the amount that would be worked out under that paragraph as represented the *recipients contribution made in that period; and (b) to the extent that, apart from this subsection, paragraph (b) of the definition of price in subsection (1) would be applicable: (i) if the fringe benefit is a car fringe benefit-so much of the amount that would be worked out under that paragraph as represented the recipient's payment made in that period; or (ii) if the fringe benefit is a benefit other than a car fringe benefit-so much of the amount that would be worked out under that paragraph as represented the recipients contribution made in that period. 9-80 The value of taxable supplies that are partly GST-free or input taxed (1) If a supply (the actual supply) is: (a) partly a *taxable supply; and (b) partly a supply that is *GST-free or *input taxed; the value of the part of the actual supply that is a taxable supply is the proportion of the value of the actual supply that the taxable supply represents. (2) The value of the actual supply, for the purposes of subsection (1), is as follows: [pic] where: taxable proportion is the proportion of the value of the actual supply that represents the value of the *taxable supply (expressed as a number between 0 and 1). 9-85 Value of taxable supplies to be expressed in Australian currency (1) For the purposes of this Act, the *value of a *taxable supply is to be expressed in Australian currency. (2) In working out the *value of a *taxable supply, any amount of the *consideration for the supply that is expressed in a currency other than Australian currency is to be treated as if it were an amount of Australian currency worked out in the manner determined by the Commissioner. 9-90 Rounding of amounts of GST One taxable supply recorded on an invoice (1) If the amount of GST on a *taxable supply that is the only taxable supply recorded on a particular *invoice would, apart from this section, be an amount that includes a fraction of a cent, the amount of GST is rounded to the nearest cent (rounding 0.5 cents upwards). Several taxable supplies recorded on an invoice (2) If 2 or more *taxable supplies are recorded on the same *invoice, the total amount of GST on the supplies is: (a) what would be the amount of GST if it were worked out by: (i) working out the GST on each of the supplies (without rounding the amounts to the nearest cent); and (ii) adding the amounts together and, if the total is an amount that includes a fraction of a cent, rounding it to the nearest cent (rounding 0.5 cents upwards); or (b) the amount worked out using the following method statement: Method statement Step 1. Work out, for each *taxable supply, what would, apart from this section, be the amount of GST on the supply. Step 2. If the amount for the supply has more decimal places than the number of decimal places allowed by the accounting system used to work out the amount, round the amount (up or down as appropriate) to that number of decimal places. Note: Subsection (4) gives further details of this rounding. Step 3. Work out the sum of the amounts worked out under step 1 and (if applicable) step 2 for each supply. Step 4. If the sum under step 3 includes a fraction of a cent, round the sum to the nearest cent (rounding 0.5 cents upwards). (3) Whether to use paragraph (2)(a) or paragraph (2)(b) to work out the total amount of GST on the supplies is a matter of choice for: (a) the supplier if the amount is being worked out to ascertain the supplier's liability for GST; or (b) the *recipient of the supplies if the amount is being worked out to ascertain the recipient's entitlement to input tax credits. (4) In applying step 2 of the method statement in subsection (2), if: (a) the number of decimal places in the amount for the supply exceeds by one decimal place the number of decimal places allowed by the accounting system used to work out the amount; and (b) the last digit of the amount (before rounding) is 5; the amount is rounded upwards to that number of decimal places. Taxable supplies divided into items (5) If one or more *taxable supplies recorded on the same *invoice are divided into 2 or more items: (a) subsection (1) does not apply; and (b) subsection (2) applies as if each such item represented a separate taxable supply. Taxable supplies recorded on documents other than invoices (6) If one or more *taxable supplies, none of which are recorded on an *invoice, are recorded on a document that is not an invoice, this section applies as if the document were an invoice. 9-99 Special rules relating to the amount of GST on taxable supplies Chapter 4 contains special rules relating to the amount of GST on taxable supplies, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Agents and insurance |Division 153| | |brokers | | |1 |Associates |Division 72 | |2 |Company amalgamations |Division 90 | |2A |Compulsory third party |Division 79 | | |schemes | | |3 |Gambling |Division 126| |4 |Long-term accommodation in |Division 87 | | |commercial residential | | | |premises | | |4AA |Non-residents making |Division 83 | | |supplies connected with | | | |Australia | | |4A |Offshore supplies other |Division 84 | | |than goods or real property| | |5 |Sale of freehold interests |Division 75 | | |etc. | | |7 |Supplies partly connected |Division 96 | | |with Australia | | |8 |Transactions relating to |Division 78 | | |insurance policies | | |9 |Valuation of taxable |Division 108| | |supplies of goods in bond | | Division 11-Creditable acquisitions 11-1 What this Division is about You are entitled to input tax credits for your creditable acquisitions. This Division defines creditable acquisitions, states who is entitled to the input tax credits and describes how to work out the input tax credits on acquisitions. 11-5 What is a creditable acquisition? You make a creditable acquisition if: (a) you acquire anything solely or partly for a *creditable purpose; and (b) the supply of the thing to you is a *taxable supply; and (c) you provide, or are liable to provide, *consideration for the supply; and (d) you are *registered, or *required to be registered. 11-10 Meaning of acquisition (1) An acquisition is any form of acquisition whatsoever. (2) Without limiting subsection (1), acquisition includes any of these: (a) an acquisition of goods; (b) an acquisition of services; (c) a receipt of advice or information; (d) an acceptance of a grant, assignment or surrender of *real property; (e) an acceptance of a grant, transfer, assignment or surrender of any right; (f) an acquisition of something the supply of which is a *financial supply; (g) an acquisition of a right to require another person: (i) to do anything; or (ii) to refrain from an act; or (iii) to tolerate an act or situation; (h) any combination of any 2 or more of the matters referred to in paragraphs (a) to (g). (3) However, an acquisition does not include an acquisition of *money unless the money is provided as *consideration for a supply that is a supply of money. 11-15 Meaning of creditable purpose (1) You acquire a thing for a creditable purpose to the extent that you acquire it in *carrying on your *enterprise. (2) However, you do not acquire the thing for a creditable purpose to the extent that: (a) the acquisition relates to making supplies that would be *input taxed; or (b) the acquisition is of a private or domestic nature. (3) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia. (4) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if: (a) the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and (b) you do not *exceed the financial acquisitions threshold. (5) An acquisition is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that: (a) the acquisition relates to making a *financial supply consisting of a borrowing; and (b) the borrowing relates to you making supplies that are not input taxed. 11-20 Who is entitled to input tax credits for creditable acquisitions? You are entitled to the input tax credit for any *creditable acquisition that you make. 11-25 How much are the input tax credits for creditable acquisitions? The amount of the input tax credit for a *creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired. However, the amount of the input tax credit is reduced if the acquisition is only *partly creditable. 11-30 Acquisitions that are partly creditable (1) An acquisition that you make is partly creditable if it is a *creditable acquisition to which one or both of the following apply: (a) you make the acquisition only partly for a *creditable purpose; (b) you provide, or are liable to provide, only part of the *consideration for the acquisition. (3) The amount of the input tax credit on an acquisition that you make that is *partly creditable is as follows: [pic] 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 to which the *creditable acquisition is for a *creditable purpose, expressed as a percentage of the total purpose of the acquisition. full input tax credit is what would have been the amount of the input tax credit for the acquisition if it had been made solely for a creditable purpose and you had provided, or had been liable to provide, all of the consideration for the acquisition. (4) For the purpose of working out the extent of the *consideration, so far as the consideration is not expressed as an amount of *money, take into account the *GST inclusive market value of the consideration. (5) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which a *creditable acquisition is for a *creditable purpose. 11-99 Special rules relating to acquisitions Chapter 4 contains special rules relating to acquisitions, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1A |Agents and insurance |Division 153| | |brokers | | |1B |Annual apportionment of |Division 131| | |creditable purpose | | |1 |Associates |Division 72 | |2 |Company amalgamations |Division 90 | |2A |Compulsory third party |Division 79 | | |schemes | | |3 |Financial supplies (reduced|Division 70 | | |credit acquisitions) | | |3A |Fringe benefits provided by|Division 71 | | |input taxed suppliers | | |4 |Gambling |Division 126| |5 |GST groups |Division 48 | |6 |GST joint ventures |Division 51 | |6A |GST religious groups |Division 49 | |7 |Insurance |Division 78 | |8 |Non-deductible expenses |Division 69 | |8A |Offshore supplies other |Division 84 | | |than goods or real property| | |9 |Pre-establishment costs |Division 60 | |10 |Reimbursement of employees |Division 111| | |etc. | | |11 |Resident agents acting for |Division 57 | | |non-residents | | |13 |Sale of freehold interests |Division 75 | | |etc. | | |14 |Second-hand goods |Division 66 | |15 |Settlement sharing |Division 80 | | |arrangements | | Part 2-3-Importations Division 13-Taxable importations 13-1 What this Division is about GST is payable on taxable importations. This Division defines taxable importations, states who is liable for the GST and describes how to work out the GST on importations. Note 1: This Division applies whether or not you are registered. Note 2: Things other than goods that are supplied overseas for use in Australia (and are therefore in that sense "imported") are not taxable importations, but they can attract GST under Division 84. 13-5 What are taxable importations? (1) You make a taxable importation if: (a) goods are imported; and (b) you enter the goods for home consumption (within the meaning of the Customs Act 1901). However, the importation is not a taxable importation to the extent that it is a *non-taxable importation. Note: There is no registration requirement for taxable importations, and the importer need not be carrying on an enterprise. (3) However, an importation of *money is not an importation of goods into Australia. 13-10 Meaning of non-taxable importation An importation is a non-taxable importation if: (a) it is a non-taxable importation under Part 3-2; or (b) it would have been a supply that was *GST-free or *input taxed if it had been a supply. 13-15 Who is liable for GST on taxable importations? You must pay the GST payable on any *taxable importation that you make. 13-20 How much GST is payable on taxable importations? (1) The amount of GST on the *taxable importation is 10% of the *value of the taxable importation. (2) The value of a *taxable importation is the sum of: (a) the *customs value of the goods imported; and (b) the amount paid or payable: (i) for the *international transport of the goods to their *place of consignment in Australia; and (ii) to insure the goods for that transport; to the extent that the amount is not already included under paragraph (a); and (c) any *customs duty payable in respect of the importation of the goods; and (d) any *wine tax payable in respect of the *local entry of the goods. (2A) If an amount to be taken into account under paragraph (2)(b) is not an amount in Australian currency, the amount so taken into account is the equivalent in Australian currency of that amount, ascertained in the way provided in section 161J of the Customs Act 1901. (3) The Commissioner may, in writing: (a) determine the way in which the amount paid or payable for a specified kind of transport or insurance is to be worked out for the purposes of paragraph (2)(b); and (b) in relation to importations of a specified kind or importations to which specified circumstances apply, determine that the amount paid or payable for a specified kind of transport or insurance is taken, for the purposes of that paragraph, to be zero. 13-25 The value of taxable importations that are partly non-taxable importations If an importation (the actual importation) is: (a) partly a *taxable importation; and (b) partly a *non-taxable importation; the value of the part of the actual importation that is a taxable importation is the proportion of the value of the actual importation (worked out as if it were solely a taxable importation) that the taxable importation represents. 13-99 Special rules relating to taxable importations Chapter 4 contains special rules relating to taxable importations, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1 |GST groups |Division 48 | |2 |GST joint ventures |Division 51 | |3 |Importations without entry |Division 114| | |for home consumption | | |5 |Resident agents acting for |Division 57 | | |non-residents | | |6 |Valuation of re-imported |Division 117| | |goods | | Division 15-Creditable importations 15-1 What this Division is about You are entitled to input tax credits for your creditable importations. This Division defines creditable importations, states who is entitled to the input tax credits and describes how to work out the input tax credits on importations. 15-5 What are creditable importations? You make a creditable importation if: (a) you import goods solely or partly for a *creditable purpose; and (b) the importation is a *taxable importation; and (c) you are *registered, or *required to be registered. 15-10 Meaning of creditable purpose (1) You import goods for a creditable purpose to the extent that you import the goods in *carrying on your *enterprise. (2) However, you do not import the goods for a creditable purpose to the extent that: (a) the importation relates to making supplies that would be *input taxed; or (b) the importation is of a private or domestic nature. (3) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that you *carry on outside Australia. (4) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed if: (a) the only reason it would (apart from this subsection) be so treated is because it relates to making *financial supplies; and (b) you do not *exceed the financial acquisitions threshold. (5) An importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that: (a) the importation relates to making a *financial supply consisting of a borrowing; and (b) the borrowing relates to you making supplies that are not input taxed. 15-15 Who is entitled to input tax credits for creditable importations? You are entitled to the input tax credit for any *creditable importation that you make. 15-20 How much are the input tax credits for creditable importations? The amount of input tax credit for a *creditable importation is an amount equal to the GST payable on the importation. However, the amount of the input tax credit is reduced if the importation is only *partly creditable. 15-25 Importations that are partly creditable (1) An importation that you make is partly creditable if it is a *creditable importation that you make only partly for a *creditable purpose. (3) The amount of the input tax credit on an importation that you make that is *partly creditable is as follows: [pic] where: extent of creditable purpose is the extent to which the importation is for a *creditable purpose, expressed as a percentage of the total purpose of the importation. full input tax credit is what would have been the amount of the input tax credit for the importation if it had been made solely for a creditable purpose. (4) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (3), the extent to which an importation is for a *creditable purpose. 15-99 Special rules relating to creditable importations Chapter 4 contains special rules relating to creditable importations, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1AA |Annual apportionment of |Division 131| | |creditable purpose | | |1A |Fringe benefits provided by|Division 71 | | |input taxed suppliers | | |1 |GST groups |Division 48 | |2 |GST joint ventures |Division 51 | |2AA |Importations without entry |Division 114| | |for home consumption | | |2A |Non-deductible expenses |Division 69 | |3 |Pre-establishment costs |Division 60 | |4 |Resident agents acting for |Division 57 | | |non-residents | | Part 2-4-Net amounts and adjustments Division 17-Net amounts and adjustments 17-1 What this Division is about A net amount is worked out for each tax period that applies to you. This is the amount payable by you to the Commonwealth, or payable to you by the Commonwealth, for the tax period. Adjustments can be made to the net amount. Increasing adjustments increase your net amount, and decreasing adjustments decrease your net amount. Note 1: GST on taxable importations is not included in the net amount. It is dealt with separately under section 33-15. Note 2: Net amounts payable to the Commonwealth are to be paid to the Commissioner on the Commonwealth's behalf (see Division 33). 17-5 Net amounts (1) The net amount for a tax period applying to you is worked out using the following formula: [pic] where: GST is the sum of all of the GST for which you are liable on the *taxable supplies that are attributable to the tax period. input tax credits is the sum of all of the input tax credits to which you are entitled for the *creditable acquisitions and *creditable importations that are attributable to the tax period. For the basic rules on what is attributable to a particular period, see Division 29. (2) However, the *net amount for the tax period may be increased or decreased if you have any *adjustments for the tax period. 17-10 Adjustments If you have any *adjustments that are attributable to a tax period applying to you, alter your *net amount for the period as follows: (a) add to the amount worked out under subsection 17-5(1) for the period the sum of all the *increasing adjustments (if any) that are attributable to the period; (b) subtract from that amount the sum of all the *decreasing adjustments (if any) that are attributable to the period. For the basic rules on what adjustments are attributable to a particular period, see Division 29. 17-15 Working out net amounts using approved forms (1) You may choose to work out your *net amount for a tax period in the way specified in an *approved form if you use the form to notify the Commissioner of that net amount. The amount so worked out is treated as your net amount for the tax period. Note: Choosing to use section 17-5 to work out your net amount does not mean your GST return is not in the approved form: see subsection 31-15(3). (2) This section has effect despite section 17-5. 17-20 Determinations relating to how to work out net amounts (1) The Commissioner may make a determination that, in the circumstances specified in the determination, a *net amount for a tax period may be worked out to take account of other matters in the way specified in the determination. (2) The matters must relate to correction of errors made in working out *net amounts for the immediately preceding tax period. (3) If those circumstances apply in relation to a tax period applying to you, you may work out your *net amount for the tax period in that way. 17-99 Special rules relating to net amounts or adjustments Chapter 4 contains special rules relating to net amounts or adjustments, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1A |Annual apportionment of |Division | | |creditable purpose |131 | |1 |Anti-avoidance |Division | | | |165 | |2 |Cessation of registration |Division | | | |138 | |3 |Changes in the extent of |Division | | |creditable purpose |129 | |4 |Company amalgamations |Division | | | |90 | |4AA |Compulsory third party schemes|Division | | | |79 | |4A |Distributions from deceased |Division | | |estates |139 | |5 |Gambling |Division | | | |126 | |5A |Goods applied solely to |Division | | |private or domestic use |130 | |6 |GST branches |Division | | | |54 | |7 |GST groups |Division | | | |48 | |8 |GST joint ventures |Division | | | |51 | |8A |GST religious groups |Division | | | |49 | |9 |Insurance |Division | | | |78 | |9AA |Non-deductible expenses |Division | | | |69 | |9A |Non-profit sub-entities |Division | | | |63 | |9B |Payment of GST by instalments |Division | | | |162 | |10 |Representatives of |Division | | |incapacitated entities |147 | |11 |Resident agents acting for |Division | | |non-residents |57 | |11A |Sale of freehold interests |Division | | |etc. |75 | |12 |Second-hand goods |Division | | | |66 | |12AA |Settlement sharing |Division | | |arrangements |80 | |12A |Simplified accounting methods |Division | | |for retailers and small |123 | | |enterprise entities | | |12B |Stock on hand on becoming |Division | | |registered etc. |137 | |13 |Supplies in satisfaction of |Division | | |debts |105 | |14 |Supplies of going concerns |Division | | | |135 | |15 |Supplies of things acquired |Division | | |etc. without full input tax |132 | | |credits | | |16 |Tradex scheme goods |Division | | | |141 | |17 |Vouchers |Division | | | |100 | Division 19-Adjustment events Table of Subdivisions 19-A Adjustment events 19-B Adjustments for supplies 19-C Adjustments for acquisitions 19-1 What this Division is about Adjustments can arise because of adjustment events. They are events such as a cancellation of a supply or acquisition, or a change in the consideration for a supply or acquisition (for example, because of a volume discount). Note: Importations do not give rise to adjustment events. 19-5 Explanation of the effect of adjustment events The following diagram shows how an *adjustment event for a supply or acquisition can give rise to an *increasing adjustment or a *decreasing adjustment. [pic] Note: This section is an explanatory section. Subdivision 19-A-Adjustment events 19-10 Adjustment events (1) An adjustment event is any event which has the effect of: (a) cancelling a supply or acquisition; or (b) changing the *consideration for a supply or acquisition; or (c) causing a supply or acquisition to become, or stop being, a *taxable supply or *creditable acquisition. Example: If goods that are supplied for export are not exported within the time provided in section 38-185, the supply is likely to become a taxable supply after originally being a supply that was GST-free. (2) Without limiting subsection (1), these are *adjustment events: (a) the return to a supplier of a thing, or part of a thing, supplied (whether or not the return involves a change of ownership of the thing); (b) a change to the previously agreed *consideration for a supply or acquisition, whether due to the offer of a discount or otherwise; (c) a change in the extent to which an entity that makes an acquisition provides, or is liable to provide, consideration for the acquisition (unless the entity *accounts on a cash basis). (3) An *adjustment event: (a) can arise in relation to a supply even if it is not a *taxable supply; and (b) can arise in relation to an acquisition even if it is not a *creditable acquisition. (4) However, the return of a thing supplied, or part of a thing supplied, to its supplier is not an *adjustment event if the return is for the purpose of repair or maintenance. Subdivision 19-B-Adjustments for supplies 19-40 Where adjustments for supplies arise You have an adjustment for a supply for which you are liable to pay GST (or would be liable to pay GST if it were a *taxable supply) if: (a) in relation to the supply, one or more *adjustment events occur during a tax period; and (b) GST on the supply was attributable to an earlier tax period (or, if the supply was not a taxable supply, would have been attributable to an earlier tax period had the supply been a taxable supply); and (c) as a result of those adjustment events, the *previously attributed GST amount for the supply (if any) no longer correctly reflects the amount of GST (if any) on the supply (the corrected GST amount), taking into account any change of circumstances that has given rise to an adjustment for the supply under this Subdivision or Division 21. 19-45 Previously attributed GST amounts The previously attributed GST amount for a supply is: (a) the amount of any GST that was attributable to a tax period in respect of the supply; plus (b) the sum of any *increasing adjustments, under this Subdivision or Division 21, that were previously attributable to a tax period in respect of the supply; minus (c) the sum of any *decreasing adjustments, under this Subdivision or Division 21, that were previously attributable to a tax period in respect of the supply. 19-50 Increasing adjustments for supplies If the *corrected GST amount is greater than the *previously attributed GST amount, you have an increasing adjustment equal to the difference between the corrected GST amount and the previously attributed GST amount. 19-55 Decreasing adjustments for supplies If the *corrected GST amount is less than the *previously attributed GST amount, you have a decreasing adjustment equal to the difference between the previously attributed GST amount and the corrected GST amount. Subdivision 19-C-Adjustments for acquisitions 19-70 Where adjustments for acquisitions arise (1) You have an adjustment for an acquisition for which you are entitled to an input tax credit (or would be entitled to an input tax credit if the acquisition were a *creditable acquisition) if: (a) in relation to the acquisition, one or more *adjustment events occur during a tax period; and (b) an input tax credit on the acquisition was attributable to an earlier tax period (or, if the acquisition was not a creditable acquisition, would have been attributable to an earlier tax period had the acquisition been a creditable acquisition); and (c) as a result of those adjustment events, the *previously attributed input tax credit amount for the acquisition (if any) no longer correctly reflects the amount of the input tax credit (if any) on the acquisition (the corrected input tax credit amount). (2) In working out the *corrected input tax credit amount for the acquisition: (a) take into account any change of circumstances that has given rise to an adjustment for the acquisition under this Subdivision or Division 21 or 129; and (b) if an adjustment relating to the acquisition under Division 131 was attributable to an earlier tax period: (i) do not take into account that adjustment; and (ii) treat the acquisition as one in relation to which Division 131 had not applied. 19-75 Previously attributed input tax credit amounts The previously attributed input tax credit amount for an acquisition is: (a) the amount of any input tax credit that was attributable to a tax period in respect of the acquisition; minus (b) the sum of any *increasing adjustments, under this Subdivision or Division 21, 129 or 131, that were previously attributable to a tax period in respect of the acquisition; plus (c) the sum of any *decreasing adjustments, under this Subdivision or Division 21 or 129, that were previously attributable to a tax period in respect of the acquisition. 19-80 Increasing adjustments for acquisitions If the *previously attributed input tax credit amount is greater than the *corrected input tax credit amount, you have an increasing adjustment equal to the difference between the previously attributed input tax credit amount and the corrected input tax credit amount. 19-85 Decreasing adjustments for acquisitions If the *previously attributed input tax credit amount is less than the *corrected input tax credit amount, you have a decreasing adjustment equal to the difference between the corrected input tax credit amount and the previously attributed input tax credit amount. 19-99 Special rules relating to adjustment events Chapter 4 contains special rules relating to *adjustment events in particular cases, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1AA |Compulsory third party |Division 79| | |schemes | | |1A |GST religious groups |Division 49| |1 |Insurance |Division 78| |2 |Non-deductible expenses |Division 69| |3 |Settlement sharing |Division 80| | |arrangements | | Division 21-Bad debts 21-1 What this Division is about If debts are written off as bad or are outstanding after 12 months, adjustments (for the purpose of working out net amounts) are made. They can arise both for amounts written off or outstanding and for recovery of amounts previously written off or outstanding. Note: This Division does not apply to supplies and acquisitions that you account for on a cash basis (except in the limited circumstances referred to in Division 159). 21-5 Writing off bad debts (taxable supplies) (1) You have a decreasing adjustment if: (a) you made a *taxable supply; and (b) the whole or part of the *consideration for the supply has not been received; and (c) you write off as bad the whole or a part of the debt, or the whole or a part of the debt has been *overdue for 12 months or more. The amount of the decreasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires. (2) However, you cannot have an *adjustment under this section if you *account on a cash basis. 21-10 Recovering amounts previously written off (taxable supplies) You have an increasing adjustment if: (a) you made a *taxable supply in relation to which you had a *decreasing adjustment under section 21-5 for a debt; and (b) you recover the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires. The amount of the increasing adjustment is 1/11 of the amount recovered. 21-15 Bad debts written off (creditable acquisitions) (1) You have an increasing adjustment if: (a) you made a *creditable acquisition for *consideration; and (b) the whole or part of the consideration is *overdue, but you have not provided the consideration overdue; and (c) the supplier of the thing you acquired writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more. The amount of the increasing adjustment is 1/11 of the amount written off, or 1/11 of the amount that has been overdue for 12 months or more, as the case requires. (2) However, you cannot have an *adjustment under this section if you *account on a cash basis. 21-20 Recovering amounts previously written off (creditable acquisitions) You have a decreasing adjustment if: (a) you made a *creditable acquisition in relation to which you had an *increasing adjustment under section 21-15 for a debt; and (b) you pay to the supplier of the thing you acquired the whole or a part of the amount written off, or the whole or a part of the amount that has been *overdue for 12 months or more, as the case requires. The amount of the decreasing adjustment is 1/11 of the amount recovered. 21-99 Special rules relating to adjustments for bad debts Chapter 4 contains special rules relating to adjustments for bad debts, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Bad debts relating to |Division 136| | |transactions that are not | | | |taxable or creditable to | | | |the fullest extent | | |1 |Changing your accounting |Division 159| | |basis | | |2 |Gambling |Division 126| |3 |Sale of freehold interests |Division 75 | | |etc. | | Part 2-5-Registration Division 23-Who is required to be registered and who may be registered 23-1 Explanation of Division This diagram shows when you are required to be, and when you may, be registered. [pic] Note: This section is an explanatory section. 23-5 Who is required to be registered You are required to be registered under this Act if: (a) you are *carrying on an *enterprise; and (b) your *GST turnover meets the *registration turnover threshold. Note: It is the entity that carries on the enterprise that is required to be registered (and not the enterprise). 23-10 Who may be registered (1) You may be *registered under this Act if you are carrying on an *enterprise (whether or not your *GST turnover is at, above or below the *registration turnover threshold). (2) You may be *registered under this Act if you intend to carry on an *enterprise from a particular date. 23-15 The registration turnover threshold (1) Your registration turnover threshold (unless you are a non- profit body) is: (a) $50,000; or (b) such higher amount as the regulations specify. (2) Your registration turnover threshold if you are a non-profit body is: (a) $100,000; or (b) such higher amount as the regulations specify. 23-99 Special rules relating to who is required to be registered or who may be registered Chapter 4 contains special rules relating to who is *required to be registered, or who may be *registered, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1A |Government entities |Division 14| | | |9 | |1B |Non-profit sub-entities |Division 63| |1 |Representatives of |Division 14| | |incapacitated entities |7 | |2 |Resident agents acting for |Division 57| | |non-residents | | |3 |Taxis |Division 14| | | |4 | Division 25-How you become registered, and how your registration can be cancelled Table of Subdivisions 25-A How you become registered 25-B How your registration can be cancelled Subdivision 25-A-How you become registered 25-1 When you must apply for registration You must apply, in the *approved form, to be *registered under this Act if: (a) you are not registered under this Act; and (b) you are *required to be registered. You must make your application within 21 days after becoming required to be registered. 25-5 When the Commissioner must register you (1) The Commissioner must *register you if: (a) you have applied for registration in an *approved form; and (b) the Commissioner is satisfied that you are *carrying on an *enterprise, or you intend to carry on an enterprise from a particular date specified in your application. Note: Refusing to register you under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must *register you (even if you have not applied for registration) if the Commissioner is satisfied that you are *required to be registered. Note: Registering you under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (3) The Commissioner must notify you in writing of any decision he or she makes in relation to you under this section. If the Commissioner decides to register you, the notice must specify the following: (a) the date of effect of your registration; (b) your registration number; (c) the tax periods that apply to you. 25-10 The date of effect of your registration (1) The Commissioner must decide the date from which your *registration takes effect, or took effect. However: (a) if you did not apply for registration and the Commissioner is satisfied that you are *required to be registered-the date of effect must not be a day before the day on which you became required to be registered; or (b) if you applied for registration-the date of effect must not be a day before: (i) the day specified in your application; or (ii) if the Commissioner is satisfied that you became required to be registered on an earlier day-the day that the Commissioner is satisfied is that earlier day; or (c) if you are being registered only because you intend to *carry on an *enterprise-the date of effect must not be a day before the day specified, in your application for registration, as the day from which you intend to carry on the enterprise. Note: Deciding the date of effect of your registration is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The *Australian Business Registrar must enter in the *Australian Business Register the date on which your *registration takes or took effect. 25-15 Effect of backdating your registration If the Commissioner decides under section 25-10, as the date of effect of your *registration (your registration day), a day before the day of the decision, then you are taken: (a) for the purpose of determining whether a supply you made on or after your registration day was a *taxable supply; and (b) for the purpose of determining whether an acquisition you made on or after that day was a *creditable acquisition; and (c) for the purpose of determining whether an importation you made on or after that day was a *creditable importation; to have been registered from and including your registration day. Note: This section ensures that backdating your registration enables your supplies and acquisitions made on or after the date of effect to be picked up by the GST system. Section 25- 10 limits the extent to which your registration can be backdated. 25-49 Special rules relating to registration Chapter 4 contains special rules relating to *registration in particular cases, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1A |Government entities |Division 14| | | |9 | |1 |GST branches |Division 54| |2 |Non-profit sub-entities |Division 63| |3 |Non-residents making |Division 83| | |supplies connected with | | | |Australia | | Subdivision 25-B-How your registration can be cancelled 25-50 When you must apply for cancellation of registration If you are *registered and you are not *carrying on any *enterprise, you must apply to the Commissioner in the *approved form for cancellation of your *registration. You must lodge your application within 21 days after the day on which you ceased to be carrying on any *enterprise. 25-55 When the Commissioner must cancel registration (1) The Commissioner must cancel your *registration if: (a) you have applied for cancellation of registration in the *approved form; and (b) at the time you applied for cancellation of registration, you had been registered for at least 12 months; and (c) the Commissioner is satisfied that you are not *required to be registered. Note: Refusing to cancel your registration under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must cancel your *registration (even if you have not applied for cancellation of your registration) if: (a) the Commissioner is satisfied that you are not *carrying on an *enterprise; and (b) the Commissioner believes on reasonable grounds that you are not likely to carry on an enterprise for at least 12 months. Note: Cancelling your registration under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (3) The Commissioner must notify you of any decision he or she makes in relation to you under this section. If the Commissioner decides to cancel your registration, the notice must specify the date of effect of the cancellation. 25-57 When the Commissioner may cancel your registration (1) The Commissioner may cancel your *registration if: (a) less than 12 months after being registered, you apply for cancellation of registration in the *approved form; and (b) the Commissioner is satisfied that you are not *required to be registered. Note: Refusing to cancel your registration under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) In considering your application, the Commissioner may have regard to: (a) how long you have been *registered; and (b) whether you have previously been registered; and (c) any other relevant matters. (3) The Commissioner must notify you of any decision he or she makes in relation to you under this section. If the Commissioner decides to cancel your registration, the notice must specify the date of effect of the cancellation. 25-60 The date of effect of your cancellation (1) The Commissioner must decide the date on which the cancellation of your *registration under subsection 25-55(1) or (2) or section 25-57 takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision. Note: Deciding the date of effect of the cancellation of your registration is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The *Australian Business Registrar must enter in the *Australian Business Register the date on which the cancellation of your *registration takes effect. 25-65 Effect of backdating your cancellation of registration If the Commissioner decides under section 25-60, as the date of effect of the cancellation of your *registration (your cancellation day), a day before the day of the decision, your registration is taken: (a) for the purpose of determining whether a supply you made on or after your cancellation day was a *taxable supply; and (b) for the purpose of determining whether an acquisition you made on or after that day was a *creditable acquisition; and (c) for the purpose of determining whether an importation you made on or after that date was a *creditable importation; to have been cancelled from and including your cancellation day. 25-99 Special rules relating to cancellation of registration Chapter 4 contains special rules relating to cancellation of *registration in particular cases, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Government entities |Division 14| | | |9 | |1 |GST branches |Division 54| |1B |Non-profit sub-entities |Division 63| |2 |Representatives of |Division 14| | |incapacitated entities |7 | |3 |Resident agents acting for |Division 57| | |non-residents | | Part 2-6-Tax periods Division 27-How to work out the tax periods that apply to you 27-1 What this Division is about This Division tells you the tax periods that apply to you. You need to know this because your net amounts (the amounts payable by you or to you) are worked out in respect of these tax periods. 27-5 General rule-3 month tax periods The tax periods that apply to you are each period of 3 months ending on 31 March, 30 June, 30 September or 31 December in any year, except to the extent that: (a) an election is in force under section 27-10; or (b) the Commissioner determines otherwise under this Division. Note: Several provisions in Chapter 4 provide for different tax periods. In particular, Division 151 provides for annual tax periods. 27-10 Election of one month tax periods (1) The tax periods that apply to you are each individual month if, by notifying the Commissioner in the *approved form, you elect to have as the tax periods that apply to you each individual month. (2) The election takes effect on the day specified in the notice. However, the day specified must be 1 January, 1 April, 1 July or 1 October. 27-15 Determination of one month tax periods (1) The Commissioner must determine that the tax periods that apply to you are each individual month if: (a) the Commissioner is satisfied that your *GST turnover meets the *tax period turnover threshold; or (b) the Commissioner is satisfied that the period for which you will be *carrying on an *enterprise in Australia is less than 3 months; or (c) the Commissioner is satisfied that you have a history of failing to comply with your obligations under a *taxation law. Note: Determining under this section the tax periods applying to you is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The determination takes effect on the day specified in the determination. However, the day specified must be 1 January, 1 April, 1 July or 1 October. Note: Deciding the date of effect of the determination is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (3) The tax period turnover threshold is: (a) $20 million; or (b) such other amount as the regulations specify. However, if the regulations change the tax period turnover threshold, the change does not apply to you until the start of the next tax period that starts after the regulation in question comes into operation. 27-20 Withdrawing elections of one month tax periods (1) You may, by notifying the Commissioner in the *approved form, withdraw an election under section 27-10, unless your *GST turnover meets the *tax period turnover threshold. (2) The withdrawal takes effect on the day specified in the notice. However, the day specified: (a) must be 1 January, 1 April, 1 July or 1 October, or any day occurring before the election takes effect; and (b) must not be a day occurring earlier than 12 months after the election took effect. 27-22 Revoking elections of one month tax periods (1) The Commissioner may, if you so request in the *approved form, revoke your election under section 27-10, with effect from a day occurring earlier than 12 months after the election took effect, unless the Commissioner is satisfied that your *GST turnover meets the *tax period turnover threshold. Note: Refusing to revoke your election under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) In considering your request, the Commissioner may have regard to: (a) for how long the tax periods applying to you have been each individual month; and (b) whether you have previously been *registered, and whether such tax periods had applied to you; and (c) any other relevant matters. (3) The revocation: (a) takes effect on the day specified in the instrument of revocation; or (b) is taken to have had effect from a past day specified in the instrument of revocation. However, the day specified must be 1 January, 1 April, 1 July or 1 October. Note: Deciding the date of effect of the revocation is a reviewable decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 27-25 Revoking determinations of one month tax periods (1) The Commissioner must revoke a determination under section 27- 15 relating to you if you so request, unless the Commissioner is satisfied that any of the grounds for making a determination under that section apply to you. Note: Refusing to revoke a determination under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The revocation takes effect on the day specified in the instrument of revocation. However, the day specified: (a) must be 1 January, 1 April, 1 July or 1 October; and (b) must not be a day occurring earlier than 12 months after the determination took effect. Note: Deciding the date of effect of the revocation is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 27-30 Tax periods determined by the Commissioner to take account of changes in tax periods (1) For the purpose of ensuring the effective operation of this Division where: (a) you become *registered or *required to be registered; or (b) the tax periods applying to you have changed; the Commissioner may, by written notice given to you, determine that a period specified in the notice is a tax period that applies to you. Note: Determining under this section a tax period applying to you is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The period specified in the notice may start earlier than the day on which the notice is given to you. (3) However, the period specified in the notice: (a) must be less than 3 months; and (b) must not overlap with any part of any other tax period for which you have already given a *GST return to the Commissioner. For the giving of GST returns to the Commissioner, see Division 31. 27-35 Changing the days on which your tax periods end (1) You may change the day in each year on which a tax period would otherwise end. However: (a) the day must be no more than 7 days earlier or 7 days later than a day on which one of the tax periods that applies to you would otherwise end if the days were not changed; and (b) the change must be consistent with the commercial accounting periods that apply to you. (2) If the day on which a tax period ends is changed, the next tax period starts on the day after that day. 27-37 Special determination of tax periods on request (1) The Commissioner may, in accordance with a request you make in the *approved form, determine the tax periods applying to you to be the tax periods specified in the request if the Commissioner is satisfied that: (a) your *GST turnover meets the *tax period turnover threshold; and (b) the tax periods specified in the request are consistent with the commercial accounting periods that apply to you; and (c) the tax periods specified in the request would, if determined under this section, result in 12 complete tax periods in each year; and (d) any other requirements specified in the regulations are complied with. Note: Refusing a request for a determination under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) A determination under this section overrides any determination under section 27-15 or 27-30 relating to tax periods applying to you. 27-38 Revoking special determination of tax periods (1) The Commissioner must revoke a determination under section 27- 37 if the Commissioner is satisfied that any of the requirements of paragraphs 27-37(1)(a), (b), (c) and (d) are not complied with. Note: Revoking a determination under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The revocation takes effect on the day specified in the instrument of revocation. However, the day specified must be 1 January, 1 April, 1 July or 1 October. Note: Deciding the date of effect of the revocation is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (3) A revocation under this section revives any election under section 27-10, or any determination under section 27-15 or 27-30, relating to tax periods applying to you. 27-40 An entity's concluding tax period (1) If: (a) an individual dies or becomes bankrupt; or (b) any other entity goes into liquidation or receivership or for any reason ceases to exist; the individual's or entity's tax period at the time is taken to have ceased at the end of the day before the death, bankruptcy, liquidation or receivership. (1A) If an entity ceases to *carry on any *enterprise, the entity's tax period at the time is taken to have ceased at the end of the day on which the cessation occurred. (2) If an entity's *registration is cancelled, the entity's tax period at the date of effect of the cancellation (the cancellation day) ceases at the end of the cancellation day. 27-99 Special rules relating to tax periods Chapter 4 contains special rules relating to tax periods, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1AAA |Annual tax periods |Division 15| | | |1 | |1 |Changes in the extent of |Division 12| | |creditable purpose |9 | |1AA |Payment of GST by |Division 16| | |instalments |2 | |1A |Representatives of |Division 14| | |incapacitated entities |7 | |2 |Resident agents acting for |Division 57| | |non-residents | | Division 29-What is attributable to tax periods Table of Subdivisions 29-A The attribution rules 29-B Accounting on a cash basis 29-C Tax invoices and adjustment notes 29-1 What this Division is about This Division tells you the tax periods to which your taxable supplies, creditable acquisitions, creditable importations and adjustments are attributable. You need to know this to work out your net amounts under Part 2-4. Note: This Division does not deal with your taxable importations, because they are not attributed to tax periods. See section 33-15 for payment of GST on taxable importations. Subdivision 29-A-The attribution rules 29-5 Attributing the GST on your taxable supplies (1) The GST payable by you on a *taxable supply is attributable to: (a) the tax period in which any of the *consideration is received for the supply; or (b) if, before any of the consideration is received, an *invoice is issued relating to the supply-the tax period in which the invoice is issued. (2) However, if you *account on a cash basis, then: (a) if, in a tax period, all of the *consideration is received for a *taxable supply-GST on the supply is attributable to that tax period; or (b) if, in a tax period, part of the consideration is received-GST on the supply is attributable to that tax period, but only to the extent that the consideration is received in that tax period; or (c) if, in a tax period, none of the consideration is received-none of the GST on the supply is attributable to that tax period. 29-10 Attributing the input tax credits for your creditable acquisitions (1) The input tax credit to which you are entitled for a *creditable acquisition is attributable to: (a) the tax period in which you provide any of the *consideration for the acquisition; or (b) if, before you provide any of the consideration, an *invoice is issued relating to the acquisition-the tax period in which the invoice is issued. (2) However, if you *account on a cash basis, then: (a) if, in a tax period, you provide all of the *consideration for a *creditable acquisition-the input tax credit for the acquisition is attributable to that tax period; or (b) if, in a tax period, you provide part of the consideration-the input tax credit for the acquisition is attributable to that tax period, but only to the extent that you provided the consideration in that tax period; or (c) if, in a tax period, none of the consideration is provided-none of the input tax credit for the acquisition is attributable to that tax period. (3) If you do not hold a *tax invoice for a *creditable acquisition when you give to the Commissioner a *GST return for the tax period to which the input tax credit (or any part of the input tax credit) on the acquisition would otherwise be attributable: (a) the input tax credit (including any part of the input tax credit) is not attributable to that tax period; and (b) the input tax credit (or part) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you hold that tax invoice. However, this subsection does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for a tax invoice does not apply. For the giving of GST returns to the Commissioner, see Division 31. (4) If the *GST return for the tax period referred to in paragraph (3)(b) states a *net amount that does not take into account an input tax credit attributable to that tax period: (a) the input tax credit is not attributable to that tax period; and (b) the input tax credit is attributable to the first tax period for which you give the Commissioner a GST return that does take it into account. 29-15 Attributing the input tax credits for your creditable importations (1) The input tax credit to which you are entitled for a *creditable importation is attributable to the tax period in which you pay the GST on the importation. (2) However, if paragraph 33-15(1)(b) applies to payment of the GST on the importation, the input tax credit is attributable to the tax period in which the liability for the GST arose. 29-20 Attributing your adjustments (1) An *adjustment that you have is attributable to the tax period in which you become aware of the adjustment. (2) However, if you *account on a cash basis, and the *adjustment arises from an *adjustment event as a result of which you are liable to provide *consideration, then: (a) if, in a tax period, all of the consideration is provided-the *adjustment is attributable to that tax period; or (b) if, in a tax period, part of the consideration is provided-the adjustment is attributable to that tax period, but only to the extent that the consideration is provided in that tax period; or (c) if, in a tax period, none of the consideration is provided-none of the adjustment is attributable to that tax period. (3) If: (a) you have a *decreasing adjustment arising from an *adjustment event; and (b) you do not hold an *adjustment note for the adjustment when you give to the Commissioner a *GST return for the tax period to which the adjustment (or any part of the adjustment) would otherwise be attributable; then: (c) the adjustment (including any part of the adjustment) is not attributable to that tax period; and (d) the adjustment (or part) is attributable to the first tax period for which you give to the Commissioner a GST return at a time when you hold that adjustment note. However, this subsection does not apply in circumstances of a kind determined in writing by the Commissioner to be circumstances in which the requirement for an adjustment note does not apply. For the giving of GST returns to the Commissioner, see Division 31. 29-25 Commissioner may determine particular attribution rules (1) The Commissioner may, in writing, determine the tax periods to which: (a) GST on *taxable supplies of a specified kind; or (b) input tax credits for *creditable acquisitions of a specified kind; or (c) input tax credits for *creditable importations of a specified kind; or (d) *adjustments of a specified kind; are attributable. (2) However, the Commissioner must not make a determination under this section unless satisfied that it is necessary to prevent the provisions of this Division and Chapter 4 applying in a way that is inappropriate in circumstances involving: (a) a supply or acquisition in which possession of goods passes, but title in the goods will, or may, pass at some time in the future; or (b) a supply or acquisition for which payment is made or an *invoice is issued, but use, enjoyment or passing of title will, or may, occur at some time in the future; or (c) a supply or acquisition occurring, but still being subject to a statutory cooling off period under an *Australian law; or (d) a supply or acquisition occurring before the supplier or *recipient knows it has occurred; or (e) a supply or acquisition occurring before the supplier or recipient knows the total *consideration; or (f) a supply or acquisition made under a contract that is subject to preconditions; or (g) a supply or acquisition made under a contract that provides for retention of some or all of the consideration until certain conditions are met; or (h) a supply or acquisition for which the GST treatment will be unknown until a later supply is made. (3) Determinations under subsection (1) override the provisions of this Division (except this section) and Chapter 4, but only to the extent of any inconsistency. 29-39 Special rules relating to attribution rules Chapter 4 contains special rules relating to attribution rules, as follows: |Checklist of special rules | |Item |For this case ... |See: | |1 |Agents and insurance |Division 153| | |brokers | | |2 |Associates |Division 72 | |3 |Cancelled lay-by sales |Division 102| |4 |Cessation of registration |Division 138| |5 |Changes in the extent of |Division 129| | |creditable purpose | | |6 |Changing your accounting |Division 159| | |basis | | |7 |Company amalgamations |Division 90 | |8 |Deposits as security |Division 99 | |8A |Distributions from deceased|Division 139| | |estates | | |8B |Non-deductible expenses |Division 69 | |9 |Pre-establishment costs |Division 60 | |10 |Reimbursement of employees |Division 111| | |etc. | | |11A |Second-hand goods |Division 66 | |12 |Supplies and acquisitions |Division 156| | |made on a progressive or | | | |periodic basis | | |13 |Supplies of things acquired|Division 132| | |etc. without full input tax| | | |credits | | |14 |Tradex scheme goods |Division 141| Subdivision 29-B-Accounting on a cash basis 29-40 Choosing to account on a cash basis (1) You may choose to *account on a cash basis, with effect from the first day of the tax period that you choose, if: (a) you are a *small business entity (other than because of subsection 328-110(4) of the *ITAA 1997) for the *income year in which you make your choice; or (ab) you do not carry on a *business and your *GST turnover does not exceed the *cash accounting turnover threshold; or (b) for income tax purposes, you account for your income using the receipts method; or (c) each of the *enterprises that you *carry on is an enterprise of a kind that the Commissioner determines, in writing, to be a kind of enterprise in respect of which a choice to *account on a cash basis may be made under this section. (3) The cash accounting turnover threshold is: (a) $2 million; or (b) such higher amount as the regulations specify. 29-45 Permission to account on a cash basis (1) The Commissioner may permit you to *account on a cash basis if: (a) you apply to the Commissioner in the *approved form for permission to account on a cash basis; and (b) the Commissioner is satisfied that, having regard to: (i) the nature and size of the *enterprise that you *carry on; and (ii) the nature of the accounting system that you use; it is appropriate to permit you to account on a cash basis. Note: Refusing to permit you to account on a cash basis is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must notify you in writing of any decision he or she makes in relation to you under this section. If the Commissioner decides to permit you to *account on a cash basis, the notice must specify the date of effect of your permission. Note: Deciding the date of effect of your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 29-50 Ceasing to account on a cash basis (1) You cease to *account on a cash basis if: (a) in a case to which paragraph 29-40(1)(a) applied-you are not a *small business entity of the kind referred to in that paragraph for an *income year and you do not have permission to *account on a cash basis; or (ab) in a case to which paragraph 29-40(1)(ab) applied-you do not satisfy the requirements of that paragraph and you do not have permission to account on a cash basis; or (b) you notify the Commissioner, in the *approved form, that you are ceasing to *account on a cash basis. (2) The date of effect of your cessation is the first day of the next tax period to commence after: (a) if paragraph (1)(a) applies-the start of the *income year referred to in that paragraph; or (b) if paragraph (1)(ab) applies-you do not satisfy the requirements of paragraph 29-40(1)(ab); or (c) if paragraph (1)(b) applies-you notify the Commissioner. (3) The Commissioner must revoke any permission for you to *account on a cash basis if the Commissioner is satisfied that: (a) either: (i) you carry on a *business but you are not a *small business entity (other than because of subsection 328-110(4) of the *ITAA 1997) for an *income year; or (ii) you do not carry on a business and your *GST turnover meets the *cash accounting turnover threshold; and (b) it is not appropriate to permit you to account on a cash basis. Note: Revoking your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (4) The Commissioner must notify you in writing of his or her decision under subsection (3). The notice must specify the date of effect of the revocation, which can be the first day of any tax period starting before, on or after the day on which the Commissioner makes the decision. Note: Deciding the date of effect of the revocation of your permission to account on a cash basis is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 29-69 Special rules relating to accounting on a cash basis Chapter 4 contains special rules relating to accounting on a cash basis, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1 |Accounting basis of |Division 157 | | |charitable institutions | | | |etc. | | Subdivision 29-C-Tax invoices and adjustment notes 29-70 Tax invoices (1) A tax invoice for a *taxable supply: (a) must be issued by the supplier, unless it is a *recipient created tax invoice (in which case it must be issued by the *recipient); and (b) must set out the *ABN of the entity that issues it; and (c) must set out the *price for the supply; and (d) must contain such other information as the regulations specify; and (e) must be in the *approved form. However, the Commissioner may treat as a tax invoice a particular document that is not a tax invoice. (2) The supplier of a *taxable supply must, within 28 days after the *recipient of the supply requests it, give to the recipient a *tax invoice for the supply, unless it is a *recipient created tax invoice. (3) A recipient created tax invoice is a *tax invoice belonging to a class of tax invoices that the Commissioner has determined in writing may be issued by the *recipient of a *taxable supply. 29-75 Adjustment notes (1) An adjustment note for an *adjustment that arises from an *adjustment event relating to a *taxable supply: (a) must be issued by the supplier of the *taxable supply in the circumstances set out in subsection (2); and (b) must set out the *ABN of the entity that issues it; and (c) must contain such other information as the Commissioner determines in writing; and (d) must be in the *approved form. However, the Commissioner may treat as an adjustment note a particular document that is not an adjustment note. (2) The supplier of the *taxable supply must: (a) within 28 days after the *recipient of the supply requests the supplier to give an *adjustment note for the *adjustment relating to the supply; or (b) if the supplier has issued a *tax invoice in relation to the supply (or the recipient has requested one) and the supplier becomes aware of the adjustment before an adjustment note is requested-within 28 days after becoming aware of that fact; give to the recipient an *adjustment note for the *adjustment, unless any *tax invoice relating to the supply would have been a *recipient created tax invoice (in which case it must be issued by the recipient). (3) However, in circumstances that the Commissioner determines in writing, paragraph (2)(b) has effect as if the number of days referred to in that paragraph is the number of days specified in the determination in relation to those circumstances. (4) Those circumstances may, for example, include the kind of the *taxable supply. 29-80 Tax invoices and adjustment notes not required for low value transactions (1) Subsections 29-10(3) and 29-70(2) do not apply to a *creditable acquisition that relates to a *taxable supply the *value of which does not exceed $50, or such higher amount as the regulations specify. (2) Subsections 29-20(3) and 29-75(2) do not apply to a *decreasing adjustment of an amount that does not exceed $50, or such higher amount as the regulations specify. 29-99 Special rules relating to tax invoices and adjustment notes Chapter 4 contains special rules relating to tax invoices and adjustment notes, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1 |Agents and insurance |Division 153 | | |brokers | | |1A |Annual apportionment of |Division 131 | | |creditable purpose | | |2 |Gambling |Division 126 | |3 |GST branches |Division 54 | |4 |Non-residents making |Division 83 | | |supplies connected with | | | |Australia | | |5 |Sale of freehold interests |Division 75 | | |etc | | Part 2-7-Returns, payments and refunds Division 31-GST returns 31-1 What this Division is about This Division is about your obligation (if you are registered or required to be registered) to give to the Commissioner GST returns for each tax period. For the penalties for failing to comply with these obligations, see the Taxation Administration Act 1953. 31-5 Who must give GST returns (1) If you are *registered or *required to be registered, you must give to the Commissioner a *GST return for each tax period. (2) You must give the return whether or not: (a) your *net amount for the tax period is zero; or (b) you are liable for the GST on any *taxable supplies that are attributable to the tax period. 31-8 When GST returns must be given-quarterly tax periods (1) If a tax period applying to you is a *quarterly tax period, you must give your *GST return for the tax period to the Commissioner: (a) as provided in the following table; or (b) within such further period as the Commissioner allows. |When quarterly GST returns must be given | |Item|If this day falls |Give the GST return | | |within the |to the Commissioner | | |quarterly tax |on or before this | | |period ... |day: | |1 |1 September |the following | | | |28 October | |2 |1 December |the following | | | |28 February | |3 |1 March |the following | | | |28 April | |4 |1 June |the following | | | |28 July | (2) A tax period is a quarterly tax period if: (a) it is a period of 3 months; or (b) it would be a period of 3 months but for the application of section 27-30 or 27-35. Note: Under section 27-30, a tax period can be determined to take account of changes in tax periods. Under section 27-35, the start or finish of a 3 month tax period can vary by up to 7 days from the start or finish of a normal quarter. 31-10 When GST returns must be given-other tax periods (1) You must give your *GST return for a tax period (other than a *quarterly tax period) to the Commissioner: (a) on or before the 21st day of the month following the end of that tax period; or (b) within such further period as the Commissioner allows. (2) However, if the tax period ends during the first 7 days of a month, you must give the *GST return to the Commissioner: (a) on or before the 21st day of that month; or (b) within such further period as the Commissioner allows. 31-15 The form and contents of GST returns (1) Your *GST return for a tax period must be in the *approved form. (2) However, if during the tax period: (a) you are not liable for the GST on any *taxable supplies, and you did not make any supplies that would have been taxable supplies had they not been *GST-free or *input taxed; and (b) you are not liable for the GST on any *taxable importations the GST on which is payable at the time when GST on taxable supplies is normally payable; and (c) you are not entitled to the input tax credits on any *creditable acquisitions or *creditable importations; you may give your *GST return for the period to the Commissioner in the manner the Commissioner requires. (3) The fact that, in your *GST return for the *tax period, your *net amount for the *tax period is worked out: (a) in the way specified in section 17-5; and (b) not in the way specified in the *approved form for a GST return; does not prevent your GST return for the tax period being treated as being in the approved form. 31-20 Additional GST returns (1) In addition to the *GST returns required under section 31-5, you must give to the Commissioner such further or fuller GST returns as the Commissioner directs you to give (including any GST return in your capacity as agent or trustee). (2) The *approved form for a further or fuller *GST return may require information to be provided relating to: (a) the tax period to which the return relates; or (b) one or more preceding tax periods; or (c) both the tax period to which the return relates, and one or more preceding tax periods. 31-25 Electronic lodgment of GST returns (1) You may give your *GST returns to the Commissioner by *lodging them electronically. Note: Section 388-75 in Schedule 1 to the Taxation Administration Act 1953 deals with signing returns. (2) However, if your *GST turnover meets the *electronic lodgment turnover threshold, you must give your *GST returns to the Commissioner by *lodging them electronically, unless the Commissioner otherwise approves. Note 1: A penalty applies if you fail to lodge your GST return electronically as required-see section 288-10 in Schedule 1 to the Taxation Administration Act 1953. Note 2: If you lodge your GST return electronically, you must also electronically notify the Commissioner of other BAS amounts- see section 388-80 in that Schedule. (3) A *GST return is lodged electronically if it is transmitted to the Commissioner in an electronic format approved by the Commissioner. (4) The electronic lodgment turnover threshold is: (a) $20 million; or (b) such higher amount as the regulations specify. 31-99 Special rules relating to GST returns Chapter 4 contains special rules relating to *GST returns, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Annual tax periods |Division 151 | |1 |GST branches |Division 54 | |2 |GST groups |Division 48 | |3 |GST joint ventures |Division 51 | |4 |Insurance |Division 78 | |4A |Payment of GST by |Division 162 | | |instalments | | |5 |Resident agents acting for |Division 57 | | |non-residents | | |6 |Supplies in satisfaction of|Division 105 | | |debts | | Division 33-Payments of GST 33-1 What this Division is about This Division is about your obligation to pay to the Commonwealth amounts of GST that remain after off-setting your entitlements to input tax credits. The obligation to pay arises for any of your net amounts that are greater than zero. Note 1: For the penalties for failing to comply with these obligations, see the Taxation Administration Act 1953. Note 2: For provisions about collection and recovery of GST, see Subdivision 105-C, and Part 4-15, in Schedule 1 to the Taxation Administration Act 1953. Note 3: Payments of GST on importations of goods are dealt with separately in section 33-15 of this Act. 33-3 When payments of net amounts must be made-quarterly tax periods If: (a) the *net amount for a tax period applying to you is greater than zero; and (b) the tax period is a *quarterly tax period; you must pay the net amount to the Commissioner as follows: |When quarterly GST payments must be made | |Item|If this day falls |Pay the net amount | | |within the |to the Commissioner | | |quarterly tax |on or before this | | |period ... |day: | |1 |1 September |the following | | | |28 October | |2 |1 December |the following | | | |28 February | |3 |1 March |the following | | | |28 April | |4 |1 June |the following | | | |28 July | 33-5 When payments of net amounts must be made-other tax periods (1) If the *net amount for a tax period (other than a *quarterly tax period) applying to you is greater than zero, you must pay the net amount to the Commissioner on or before the 21st day of the month following the end of that tax period. (2) However, if the tax period ends during the first 7 days of a month, you must pay the *net amount to the Commissioner on or before the 21st day of that month. 33-10 How payments of net amounts are made (1) You may pay by *electronic payment any *net amounts payable by you. Any amounts of a net amount that you do not pay by electronic payment must be paid in the manner determined in writing by the Commissioner. (2) However, if your *GST turnover meets the *electronic lodgment turnover threshold, you must pay by *electronic payment any *net amounts payable by you. Note 1: A penalty applies if you fail to pay electronically as required-see section 288-20 in Schedule 1 to the Taxation Administration Act 1953. Note 2: You must also pay other tax debts electronically-see section 8AAZMA in that Act. 33-15 Payments of amounts of GST on importations (1) Amounts of GST on *taxable importations are to be paid by the importer to the Commonwealth: (a) at the same time, at the same place, and in the same manner, as *customs duty is payable on the goods in question (or would be payable if the goods were subject to customs duty); or (b) in the circumstances specified in the regulations, within such further time specified in the regulations, and at the place and in the manner specified in the regulations. Note: The regulations could (for example) allow for deferral of payments to coincide with payments of net amounts. (2) An officer of Customs (within the meaning of subsection 4(1) of the Customs Act 1901) may refuse to deliver the goods concerned unless the GST has been paid. 33-99 Special rules relating to payments of GST Chapter 4 contains special rules relating to payments of GST, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1A |Annual tax periods |Division 151 | |1 |Anti-avoidance |Division 165 | |2 |Customs security etc. given|Division 171 | | |on taxable importations | | |3 |GST branches |Division 54 | |4 |GST joint ventures |Division 51 | |4A |Importations without entry |Division 114 | | |for home consumption | | |5 |Insurance |Division 78 | |5A |Payment of GST by |Division 162 | | |instalments | | |6 |Supplies in satisfaction of|Division 105 | | |debts | | Division 35-Refunds 35-1 What this Division is about This Division is about the Commissioner's obligation to pay to you your entitlements to input tax credits that remain after off- setting amounts of GST. The obligation to pay arises for any of your net amounts that are less than zero. 35-5 Entitlement to refund If the *net amount for a tax period is less than zero, the Commissioner must, on behalf of the Commonwealth, pay that amount (expressed as a positive amount) to you. Note 1: See Division 3A of Part IIB of, and section 105-65 in Schedule 1 to, the Taxation Administration Act 1953 for the rules about how the Commissioner must pay you. Division 3 of Part IIB allows the Commissioner to apply the amount owing as a credit against tax debts that you owe to the Commonwealth. Note 2: Interest is payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983 if the Commissioner is late in refunding the amount. 35-10 When entitlement arises Your entitlement to be paid an amount under section 35-5 arises when you give the Commissioner a *GST return. 35-99 Special rules relating to refunds Chapter 4 contains special rules relating to refunds, as follows: |Checklist of special rules | |Item|For this case ... |See: | |1 |Anti-avoidance |Division 165 | |2 |GST branches |Division 54 | |3 |GST joint ventures |Division 51 | |4 |Tourist refund scheme |Division 168 | Note: Section 105-65 in Schedule 1 to the Taxation Administration Act 1953 also relates to refunds of net amounts. Part 2-8-Checklist of special rules Division 37-Checklist of special rules 37-1 Checklist of special rules The provisions set out in the table contain special rules relating to the matters indicated. |Checklist of special rules | |Item |For this case... |See: | |1AA |Accounting basis of charitable |Division 1| | |institutions etc. |57 | |1 |Agents and insurance brokers |Division 1| | | |53 | |1A |Annual apportionment of creditable |Division 1| | |purpose |31 | |1B |Annual tax periods |Division 1| | | |51 | |2 |Anti-avoidance |Division 1| | | |65 | |3 |Associates |Division 7| | | |2 | |3A |Bad debts relating to transactions |Division 1| | |that are not taxable or creditable to |36 | | |the fullest extent | | |4 |Cancelled lay-by sales |Division 1| | | |02 | |5 |Cessation of registration |Division 1| | | |38 | |6 |Changes in the extent of creditable |Division 1| | |purpose |29 | |7 |Changing your accounting basis |Division 1| | | |59 | |8 |Company amalgamations |Division 9| | | |0 | |8A |Compulsory third party schemes |Division 7| | | |9 | |9 |Customs security etc. given for |Division 1| | |taxable importations |71 | |10 |Deposits as security |Division 9| | | |9 | |10A |Distributions from deceased estates |Division 1| | | |39 | |11 |Financial supplies (reduced credit |Division 7| | |acquisitions) |0 | |11A |Fringe benefits provided by input |Division 7| | |taxed suppliers |1 | |12 |Gambling |Division 1| | | |26 | |12A |Goods applied solely to private or |Division 1| | |domestic use |30 | |12B |Government entities |Division 1| | | |49 | |13 |GST branches |Division 5| | | |4 | |14 |GST groups |Division 4| | | |8 | |15 |GST joint ventures |Division 5| | | |1 | |15A |GST religious groups |Division 4| | | |9 | |17 |Importations without entry for home |Division 1| | |consumption |14 | |17A |Income tax-related transactions |Division 1| | | |10 | |18 |Insurance |Division 7| | | |8 | |19 |Long-term accommodation in commercial |Division 8| | |residential premises |7 | |20 |Non-deductible expenses |Division 6| | | |9 | |20A |Non-profit sub-entities |Division 6| | | |3 | |20B |Non-residents making supplies |Division 8| | |connected with Australia |3 | |21 |Offshore supplies other than goods or |Division 8| | |real property |4 | |21A |Payment of GST by instalments |Division 1| | | |62 | |22 |Payments of taxes |Division 8| | | |1 | |23 |Pre-establishment costs |Division 6| | | |0 | |24 |Reimbursement of employees etc. |Division 1| | | |11 | |25 |Representatives of incapacitated |Division 1| | |entities |47 | |26 |Resident agents acting for |Division 5| | |non-residents |7 | |28 |Sale of freehold interests etc. |Division 7| | | |5 | |29 |Second-hand goods |Division 6| | | |6 | |29AA |Settlement sharing arrangements |Division 8| | | |0 | |29A |Simplified accounting methods for |Division 1| | |retailers and small enterprise |23 | | |entities | | |29B |Stock on hand on becoming registered |Division 1| | |etc. |37 | |30 |Supplies and acquisitions made on a |Division 1| | |progressive or periodic basis |56 | |30A |Supplies in return for rights to |Division 8| | |develop land |2 | |31 |Supplies in satisfaction of debts |Division 1| | | |05 | |32 |Supplies of going concerns |Division 1| | | |35 | |33 |Supplies of things acquired etc. |Division 1| | |without full input tax credits |32 | |33A |Supply under arrangement covered by |Division 1| | |PAYG voluntary agreement |13 | |34 |Supplies partly connected with |Division 9| | |Australia |6 | |35 |Taxis |Division 1| | | |44 | |35A |Telecommunication supplies |Division 8| | | |5 | |36 |Tourist refund scheme |Division 1| | | |68 | |36A |Tradex scheme goods |Division 1| | | |41 | |36B |Valuation of re-imported goods |Division 1| | | |17 | |37 |Valuation of taxable supplies of goods|Division 1| | |in bond |08 | |38 |Vouchers |Division 1| | | |00 | Chapter 3-The exemptions Part 3-1-Supplies that are not taxable supplies Division 38-GST-free supplies Table of Subdivisions 38-A Food 38-B Health 38-C Education 38-D Child care 38-E Exports and other supplies that are for consumption outside Australia 38-F Religious services 38-G Activities of charitable institutions etc. 38-I Water and sewerage 38-J Supplies of going concerns 38-K Transport and related matters 38-L Precious metals 38-M Supplies through inwards duty free shops 38-N Grants of land by governments 38-O Farm land 38-P Cars for use by disabled people 38-Q International Mail 38-1 What this Division is about This Division sets out the supplies that are GST-free. If a supply is GST-free, then: . no GST is payable on the supply; . an entitlement to an input tax credit for anything acquired or imported to make the supply is not affected. For the basic rules about supplies that are GST-free, see sections 9-30 and 9-80. Subdivision 38-A-Food 38-2 Food A supply of *food is GST-free. 38-3 Food that is not GST-free (1) A supply is not GST-free under section 38-2 if it is a supply of: (a) *food for consumption on the *premises from which it is supplied; or (b) hot food for consumption away from those premises; or (c) food of a kind specified in the third column of the table in clause 1 of Schedule 1, or food that is a combination of one or more foods at least one of which is food of such a kind; or (d) a *beverage (or an ingredient for a beverage), other than a beverage (or ingredient) of a kind specified in the third column of the table in clause 1 of Schedule 2; or (e) food of a kind specified in regulations made for the purposes of this subsection. (2) However, this section does not apply to a supply of *food of a kind specified in regulations made for the purposes of this subsection. (3) The items in the table in clause 1 of Schedule 1 or 2 are to be interpreted subject to the other clauses of Schedule 1 or 2, as the case requires. 38-4 Meaning of food (1) Food means any of these, or any combination of any of these: (a) food for human consumption (whether or not requiring processing or treatment); (b) ingredients for food for human consumption; (c) *beverages for human consumption; (d) ingredients for beverages for human consumption; (e) goods to be mixed with or added to food for human consumption (including condiments, spices, seasonings, sweetening agents or flavourings); (f) fats and oils marketed for culinary purposes; but does not include: (g) live animals (other than crustaceans or molluscs); or (ga) unprocessed cow's milk; or (h) any grain, cereal or sugar cane that has not been subject to any process or treatment resulting in an alteration of its form, nature or condition; or (i) plants under cultivation that can be consumed (without being subject to further process or treatment) as food for human consumption. (2) Beverage includes water. 38-5 Premises used in supplying food Premises, in relation to a supply of *food, includes: (a) the place where the supply takes place; or (b) the grounds surrounding a cafe or public house, or other outlet for the supply; or (c) the whole of any enclosed space such as a football ground, garden, showground, amusement park or similar area where there is a clear boundary or limit; but does not include any part of a public thoroughfare unless it is an area designated for use in connection with supplies of food from an outlet for the supply of food. 38-6 Packaging of food (1) A supply of the packaging in which *food is supplied is GST- free if the supply of the food is GST-free. (2) However, the supply of the packaging is GST-free under this section only to the extent that the packaging: (a) is necessary for the supply of the food; and (b) is packaging of a kind in which food of that kind is normally supplied. Subdivision 38-B-Health 38-7 Medical services (1) A supply of a *medical service is GST-free. (2) However, a supply of a *medical service is not GST-free under subsection (1) if: (a) it is a supply of a *professional service rendered in prescribed circumstances within the meaning of regulation 14 of the Health Insurance Regulations made under the Health Insurance Act 1973 (other than the prescribed circumstances set out in regulations 14(2)(ea), (f) and (g)); or (b) it is rendered for cosmetic reasons and is not a *professional service for which medicare benefit is payable under Part II of the Health Insurance Act 1973. (3) A supply of goods is GST-free if: (a) it is made to an individual in the course of supplying to him or her a *medical service the supply of which is GST-free; and (b) it is made at the premises at which the medical service is supplied. 38-10 Other health services (1) A supply is GST-free if: (a) it is a service of a kind specified in the table in this subsection, or of a kind specified in the regulations; and (b) the supplier is a *recognised professional in relation to the supply of services of that kind; and (c) the supply would generally be accepted, in the profession associated with supplying services of that kind, as being necessary for the appropriate treatment of the *recipient of the supply. |Health services | |Item |Service | |1 |Aboriginal or Torres Strait | | |Islander health | |2 |Acupuncture | |3 |Audiology, audiometry | |4 |Chiropody | |5 |Chiropractic | |6 |Dental | |7 |Dietary | |8 |Herbal medicine (including | | |traditional Chinese herbal | | |medicine) | |9 |Naturopathy | |10 |Nursing | |11 |Occupational therapy | |12 |Optometry | |13 |Osteopathy | |14 |Paramedical | |15 |Pharmacy | |16 |Psychology | |17 |Physiotherapy | |18 |Podiatry | |19 |Speech pathology | |20 |Speech therapy | |21 |Social work | (2) However, a supply of a pharmacy service is not GST-free under subsection (1) unless it is: (a) a supply relating to a supply that is GST-free because of section 38-50; or (b) a service of conducting a medication review. (3) A supply of goods is GST-free if: (a) it is made to a person in the course of supplying to the person a service the supply of which is GST-free under subsection (1) (other than a service referred to in item 8, 9, 12 or 15 of the table in subsection (1)); and (b) it is made at the premises at which the service is supplied. (4) A supply of goods is GST-free if: (a) it is made to a person in the course of supplying to the person a service referred to in item 8 or 9 of the table in subsection (1); and (b) it is supplied, and used or consumed, at the premises at which the service is supplied. (5) A supply is GST-free if it is provided by an ambulance service in the course of the treatment of the *recipient of the supply. 38-15 Other government funded health services A supply is GST-free if: (a) it is a supply of a health service in connection with a supply that is GST-free because of section 38-7 or 38-10; and (b) the supplier receives funding from the Commonwealth, a State or a Territory in connection with the supply of the health service; and (c) the supply of the health service is of a kind determined in writing by the *Health Minister. 38-20 Hospital treatment (1) A supply of *hospital treatment is GST-free. (2) However, a supply of *hospital treatment is not GST-free to the extent that it relates to a supply of a *professional service that, because of subsection 38-7(2), is not GST-free. (3) A supply of goods is GST-free if it is a supply that is directly related to a supply of *hospital treatment that is: (a) GST-free because of subsection (1); and (b) supplied by, or on behalf of, the supplier of the hospital treatment. 38-25 Residential care etc. (1) A supply of services is GST-free if: (a) it is a supply of services covered by Schedule 1 to the *Quality of Care Principles; and (b) it is provided through a residential care service (within the meaning of the Aged Care Act 1997); and (c) the supplier is an approved provider (within the meaning of that Act). (2) A supply of services is GST-free if: (a) the services are provided to one or more aged or disabled people; and (b) the *Aged Care Minister has determined in writing that the services are of a kind covered by Schedule 1 to the *Quality of Care Principles; and (c) the supplier receives funding from the Commonwealth, a State or a Territory in connection with the supply. (3) A supply of services is GST-free if: (a) the services are provided to one or more aged or disabled people in a residential setting; and (b) the *Aged Care Minister has determined in writing that the services are of a kind covered by Schedule 1 to the *Quality of Care Principles; and (c) the services include, and are only provided to people who require, the services (care services) set out in: (i) item 2.1 (daily living activities assistance) of Part 2 of that Schedule; or (ii) item 3.8 (nursing services) of Part 3 of that Schedule. (3A) Services provided to a resident of a *retirement village are taken, for the purposes of paragraph (3)(a), to be provided in a residential setting if, and only if: (a) he or she is a resident of a *serviced apartment in the retirement village; and (b) there is in force a written agreement under which the operator of the retirement village provides daily meals and heavy laundry services to all of the residents of the apartment. (3B) However, services provided to a resident of a *serviced apartment in a *retirement village are not taken, for the purposes of paragraph (3)(a), to be provided in a residential setting if: (a) the *Aged Care Minister has determined in writing: (i) the levels of care services that residents of serviced apartments in retirement villages must require in order for subsection (3) to apply; and (ii) the way in which the levels of care services required by residents are to be assessed; and (b) the *Aged Care Secretary has not, in accordance with the determination, assessed the person to whom the services are provided as requiring the levels of care services so determined. (3C) A determination made for the purposes of paragraph (3B)(a) may be restricted to a specified class of residents of *serviced apartments in *retirement villages. (4) A supply of accommodation is GST-free if it is made to a person in the course of making a supply to that person that is GST-free under subsection (1), (2) or (3). (4A) A supply is GST-free if: (a) it is made to a person who is a person of a kind referred to in paragraph (3)(c); and (b) it is: (i) a supply, by way of lease, hire or licence, of *residential premises consisting of a *serviced apartment in a *retirement village; or (ii) a sale of *real property that is residential premises consisting of a serviced apartment in a retirement village; or (iii) a supply of an excluded security (within the meaning of the Corporations Act 2001) in respect of which the right to participate in a retirement village scheme (within the meaning of that Act) entitles the person to use or occupy a serviced apartment in a retirement village; and (c) in a case where: (i) a determination made for the purposes of paragraph (3B)(a) is in force; and (ii) the determination is not restricted under subsection (3C) in such a way that the determination excludes the person; the *Aged Care Secretary has, in accordance with the determination, assessed the person as requiring the levels of care services determined in the determination; and (d) it is made in connection with one or more supplies, or proposed supplies, to the person that are or will be GST-free under subsection (3). (5) However, a supply of services that is covered by an extra services fee within the meaning of Division 35 of the Aged Care Act 1997 is only GST-free under this section to the extent that the services are covered by Schedule 1 to the *Quality of Care Principles. 38-30 Community care etc. (1) A supply of *community care is GST-free if community care subsidy is payable under Part 3-2 of the Aged Care Act 1997 to the supplier for the care. (2) A supply of care is GST-free if the supplier receives funding under the Home and Community Care Act 1985 in connection with the supply. (3) A supply of *community care is GST-free if the supply is of services: (a) that are provided to one or more aged or disabled people; and (b) that are of a kind covered by item 2.1 (daily living activities assistance) of Part 2 of Schedule 1 to the *Quality of Care Principles. (4) A supply of care is GST-free if: (a) the supplier receives funding from the Commonwealth, a State or a Territory in connection with the supply; and (b) the supply of the care is of a kind determined in writing by the *Aged Care Minister to be similar to a supply that is GST- free because of subsection (2). 38-35 Flexible care A supply of flexible care (within the meaning of section 49-3 of the Aged Care Act 1997) is GST-free if flexible care subsidy is payable under Part 3.3 of that Act to the supplier for the care. 38-40 Specialist disability services A supply of services is GST-free if the supplier receives funding under the Disability Services Act 1986 or under a complementary *State law or *Territory law in respect of the services. 38-45 Medical aids and appliances (1) A supply is GST-free if: (a) it is covered by Schedule 3 (medical aids and appliances), or specified in the regulations; and (b) the thing supplied is specifically designed for people with an illness or disability, and is not widely used by people without an illness or disability. (2) A supply is GST-free if the thing supplied is supplied as a spare part for, and is specifically designed as a spare part for, another thing the supply of which would be GST-free under subsection (1). (3) However, a supply is not GST-free under subsection (1) or (2) if the supplier and the *recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST- free supplies. 38-47 Other GST-free health goods (1) A supply is GST-free if it is a supply of goods of a kind that the *Health Minister, by determination in writing, declares to be goods the supply of which is GST-free. (2) However, a supply is not GST-free under subsection (1) if the supplier and the *recipient have agreed that the supply, or supplies of a kind that include that supply, not be treated as GST- free supplies. 38-50 Drugs and medicinal preparations etc. (1) A supply of a drug or medicinal preparation is GST-free if the supply is on prescription and: (a) under a *State law or a *Territory law in the State or Territory in which the supply takes place, supply of the drug or medicinal preparation is restricted, but may be supplied on prescription; or (b) the drug or medicinal preparation is a pharmaceutical benefit (within the meaning of Part VII of the National Health Act 1953). (2) A supply of a drug or medicinal preparation is GST-free if, under a *State law or a *Territory law in the State or Territory in which it is supplied, the supply of the drug or medicinal preparation to an individual for private or domestic use or consumption is restricted but may be made by: (a) a *medical practitioner, *dental practitioner or pharmacist; or (b) any other person permitted by or under that law to do so. (3) Subsection (2) does not cover the supply of a drug or medicinal preparation of a kind specified in the regulations. (4) A supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and: (a) it is supplied as a pharmaceutical benefit (within the meaning of section 91 of the Veterans' Entitlements Act 1986); and (b) it is supplied under an approved scheme (within the meaning of that section). (4A) A supply of a drug, medicine or other pharmaceutical item is GST-free if the supply is on prescription and: (a) it is supplied as a pharmaceutical benefit (within the meaning of section 5 of the Military Rehabilitation and Compensation Act 2004); and (b) it is supplied in accordance with a determination made under paragraph 286(1)(c) of that Act. (5) A supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is an analgesic that has a single active ingredient the supply of which as a drug or medicinal preparation would be GST-free under subsection (2) if it were supplied in a larger quantity; and (b) the drug or medicinal preparation is of a kind the supply of which is declared by the *Health Minister to be GST-free, by determination in writing. (6) A supply of a drug or medicinal preparation is GST-free if: (a) the drug or medicinal preparation is the subject of an approval under paragraph 19(1)(a) of the Therapeutic Goods Act 1989, and any conditions to which the approval is subject have been complied with; or (b) the drug or medicinal preparation is supplied under an authority under subsection 19(5) of that Act, and the supply is in accordance with any regulations made for the purposes of subsection 19(7) of that Act; or (c) the drug or medicinal preparation is exempted from the operation of Part 3 of that Act under regulation 12A of the Therapeutic Goods Regulations. (7) A supply of a drug or medicinal preparation covered by this section is GST-free if, and only if: (a) the drug or medicinal preparation is for human use or consumption; and (b) the supply is to an individual for private or domestic use or consumption. 38-55 Private health insurance etc. (1) A supply of *private health insurance is GST-free. (2) A supply of insurance against liability to pay for services supplied by ambulance is GST-free. (3) However, a supply of re-insurance is not GST-free under this section. Subdivision 38-C-Education 38-85 Education courses A supply is GST-free if it is a supply of: (a) an *education course; or (b) administrative services directly related to the supply of such a course, but only if they are supplied by the supplier of the course. 38-90 Excursions or field trips (1) A supply is GST-free if it is a supply of an excursion or field trip, but only if the excursion or field trip: (a) is directly related to the curriculum of an *education course; and (b) is not predominantly recreational. (2) However: (a) if the course is a *tertiary course, a *tertiary residential college course or a *professional or trade course-any supply of accommodation as part of the excursion or field trip is not GST- free; and (b) in any case-any supply of *food as part of the excursion or field trip is not GST-free under this section. 38-95 Course materials A supply of *course materials for a subject undertaken in an *education course is GST-free. 38-97 Lease etc. of curriculum related goods A supply by way of lease or hire of goods is GST-free if: (a) the goods are for use directly or principally by a student in undertaking a *pre-school course, *primary course or *secondary course in which the student is enrolled; and (b) the entity supplying the course leases or hires the goods; and (c) at all times while the lease or hiring has effect, the entity supplying the course has the right to decide who uses goods and the use to which the goods are put; and (d) the lease or hiring is not part of an arrangement that includes: (i) a transfer of ownership of the goods; or (ii) an agreement to transfer ownership of the goods; or (iii) imposing an obligation, or conferring a right, to transfer ownership of the goods. 38-100 Supplies that are not GST-free To avoid doubt, the following supplies related to an *education course are not GST-free: (a) a supply by way of sale, lease or hire of goods (other than *course materials covered by section 38-95, or a supply by way of lease or hire that is covered by section 38-97); (b) a supply of membership of a student organisation. 38-105 Accommodation at boarding schools etc. (1) A supply is GST-free if: (a) it is a supply of *student accommodation to students undertaking a *primary course, a *secondary course or a *special education course; and (b) the supplier of the accommodation also supplies the course. (2) A supply is GST-free if: (a) it is a supply of *student accommodation to students who are undertaking a *primary course, a *secondary course or a *special education course; and (b) the accommodation is provided in a hostel whose primary purpose is to provide accommodation for students from rural or remote locations who are undertaking such courses. (3) Student accommodation means the right to occupy the whole or part of the premises used to provide the accommodation, including, if it is provided as part of the right so to occupy, the supply of: (a) cleaning and maintenance; or (b) electricity, gas, air-conditioning or heating; or (c) telephone, television, radio or any other similar thing. (4) However, a supply is not GST-free under subsection (1) or (2) to the extent that it consists of the supply of *food. 38-110 Recognition of prior learning etc. (1) A supply is GST-free if the supply is the assessment or issue of qualifications for the purpose of: (a) access to education; or (b) membership of a professional or trade association; or (c) registration or licensing for a particular occupation; or (d) employment. (2) However, a supply is not GST-free under subsection (1) unless the supply is carried out by: (a) a professional or trade association; or (b) an *education institution; or (c) an entity that is registered by a training recognition authority of a State or Territory in accordance with the Australian Recognition Framework to provide skill recognition (assessment only) services; or (d) an authority of the Commonwealth or of a State or Territory; or (e) a local government body. Subdivision 38-D-Child care 38-140 Child care-registered carers under the family assistance law A supply is GST-free if it is a supply of child care by a registered carer (within the meaning of section 3 of the A New Tax System (Family Assistance) (Administration) Act 1999). 38-145 Child care-approved child care services under the family assistance law A supply is GST-free if: (a) it is a supply of child care by an approved child care service (within the meaning of section 3 of the A New Tax System (Family Assistance) (Administration) Act 1999); or (b) it is a supply of an excursion that is directly related to a supply of child care covered by paragraph (a). 38-150 Other child care A supply is GST-free if it is a supply of child care by a supplier that is eligible for funding (whether or not in respect of that particular supply) from the Commonwealth under guidelines made by the *Child Care Minister that relate to the funding of: (a) family day care; or (b) occasional care; or (c) outside school hours care; or (d) vacation care; or (e) any other type of care determined in writing by that Minister. 38-155 Supplies directly related to child care that is GST-free A supply is GST-free if it is a supply that is directly related to a supply of child care that is: (a) GST-free because of section 38-140, 38-145 or 38-150; and (b) supplied by, or on behalf of, the supplier of the child care. Subdivision 38-E-Exports and other supplies for consumption outside Australia 38-185 Exports of goods (1) The third column of this table sets out supplies that are GST- free: |GST-free exports of goods | |Item|Topic |These supplies are GST-free ... | |1 |Export of |a supply of goods, but only if the | | |goods-gener|supplier exports them from Australia | | |al |before, or within 60 days (or such | | | |further period as the Commissioner | | | |allows) after: | | | |(a) the day on which the supplier | | | |receives any of the *consideration for| | | |the supply; or | | | |(b) if, on an earlier day, the | | | |supplier gives an *invoice for the | | | |supply-the day on which the supplier | | | |gives the invoice. | |2 |Export of |a supply of goods for which the | | |goods-suppl|*consideration is provided in | | |ies paid |instalments under a contract that | | |for by |requires the goods to be exported, but| | |instalments|only if the supplier exports them from| | | |Australia before, or within 60 days | | | |(or such further period as the | | | |Commissioner allows) after: | | | |(a) the day on which the supplier | | | |receives any of the final instalment | | | |of the consideration for the supply; | | | |or | | | |(b) if, on an earlier day, the | | | |supplier gives an *invoice for that | | | |final instalment-the day on which the | | | |supplier gives the invoice. | |3 |Export of |a supply of an aircraft or *ship, but | | |aircraft or|only if the recipient of the aircraft | | |ships |or ship exports it from Australia | | | |under its own power within 60 days (or| | | |such further period as the | | | |Commissioner allows) after taking | | | |physical possession of it. | |4 |Export of |a supply of an aircraft or *ship for | | |aircraft or|which the *consideration is provided | | |ships-paid |in instalments under a contract that | | |for by |requires the aircraft or ship to be | | |instalments|exported, but only if the *recipient | | | |exports it from Australia before, or | | | |within 60 days (or such further period| | | |as the Commissioner allows) after, the| | | |earliest day on which one or more of | | | |the following occurs: | | | |(a) the supplier receives any of the | | | |final instalment of the consideration | | | |for the supply; | | | |(b) the supplier gives an *invoice for| | | |that final instalment; | | | |(c) the supplier delivers the aircraft| | | |or ship to the recipient or (at the | | | |recipient's request) to another | | | |person. | |5 |Export of |a supply of: | | |goods that |(a) *aircraft's stores, or spare | | |are to be |parts, for use, consumption or sale on| | |consumed on|an aircraft on a flight that has a | | |internation|destination outside Australia; or | | |al flights |(b) *ship's stores, or spare parts, | | |or voyages |for use, consumption or sale on a | | | |*ship on a voyage that has a | | | |destination outside Australia; | | | |whether or not part of the flight or | | | |voyage involves a journey between | | | |places in Australia. | |6 |Export of |a supply of goods in the course of | | |goods used |repairing, renovating, modifying or | | |to repair |treating other goods from outside | | |etc. |Australia whose destination is outside| | |imported |Australia, but only if: | | |goods |(a) the goods are attached to, or | | | |become part of, the other goods; or | | | |(b) the goods become unusable or | | | |worthless as a direct result of being | | | |used to repair, renovate, modify or | | | |treat the other goods. | |7 |Goods |a supply of goods to a *relevant | | |exported by|traveller, but only if: | | |travellers |(a) the supply is made in accordance | | |as |with the rules specified in the | | |accompanied|regulations; and | | |baggage |(b) the goods are exported as | | | |accompanied baggage of the relevant | | | |traveller. | (2) However, a supply covered by any of items 1 to 6 in the table in subsection (1) is not GST-free if the supplier reimports the goods into Australia. (3) Without limiting items 1 and 2 in the table in subsection (1), a supplier of goods is treated, for the purposes of those items, as having exported the goods from Australia if: (a) before the goods are exported, the supplier supplies them to an entity that is not *registered or *required to be registered; and (b) that entity exports the goods from Australia; and (c) the goods have been entered for export within the meaning of section 113 of the Customs Act 1901; and (d) since their supply to that entity, the goods have not been altered or used in any way, except to the extent (if any) necessary to prepare them for export; and (e) the supplier has sufficient documentary evidence to show that the goods were exported. However, if the goods are reimported into Australia, the supply is not GST-free unless the reimportation is a *taxable importation. 38-187 Lease etc. of goods for use outside Australia A supply of goods is GST-free if: (a) the supply is by way of lease or hire; and (b) the goods are used outside Australia. Note: If goods are leased or hired and used partly in Australia and partly outside Australia, the supply could be taxable to the extent that the goods are used in Australia (see section 9-5). 38-188 Tooling used by non-residents to manufacture goods for export A supply of goods is GST-free if: (a) the *recipient of the supply is a *non-resident, and is not *registered or *required to be registered; and (b) the goods are jigs, patterns, templates, dies, punches and similar machine tools to be used in Australia solely to manufacture goods that will be for export from Australia. 38-190 Supplies of things, other than goods or real property, for consumption outside Australia (1) The third column of this table sets out supplies that are GST- free (except to the extent that they are supplies of goods or *real property): |Supplies of things, other than goods or real property, | |for consumption outside Australia | |Item|Topic |These supplies are GST-free (except | | | |to the extent that they are supplies | | | |of goods or *real property)... | |1 |Supply |a supply that is directly connected | | |connected |with goods or real property situated | | |with |outside Australia. | | |property | | | |outside | | | |Australia | | |2 |Supply to |a supply that is made to a | | |*non-residen|*non-resident who is not in Australia| | |t outside |when the thing supplied is done, and:| | |Australia. | | | | |(a) the supply is neither a supply of| | | |work physically performed on goods | | | |situated in Australia when the work | | | |is done nor a supply directly | | | |connected with *real property | | | |situated in Australia; or | | | |(b) the *non-resident acquires the | | | |thing in *carrying on the | | | |non-resident's *enterprise, but is | | | |not *registered or *required to be | | | |registered. | |3 |Supplies |a supply: | | |used or |(a) that is made to a *recipient who | | |enjoyed |is not in Australia when the thing | | |outside |supplied is done; and | | |Australia |(b) the effective use or enjoyment of| | | |which takes place outside Australia; | | | |other than a supply of work | | | |physically performed on goods | | | |situated in Australia when the thing | | | |supplied is done, or a supply | | | |directly connected with *real | | | |property situated in Australia. | |4 |Rights |a supply that is made in relation to | | | |rights if: | | | |(a) the rights are for use outside | | | |Australia; or | | | |(b) the supply is to an entity that | | | |is not an *Australian resident and is| | | |outside Australia when the thing | | | |supplied is done. | |5 |Export of |a supply that is constituted by the | | |services |repair, renovation, modification or | | |used to |treatment of goods from outside | | |repair etc. |Australia whose destination is | | |imported |outside Australia. | | |goods | | (2) However, a supply covered by any of items 1 to 5 in the table in subsection (1) is not GST-free if it is the supply of a right or option to acquire something the supply of which would be *connected with Australia and would not be *GST-free. (2A) A supply covered by any of items 2 to 4 in the table in subsection (1) is not *GST-free if the acquisition of the supply relates (whether directly or indirectly, or wholly or partly) to the making of a supply of *real property situated in Australia that would be, wholly or partly, *input taxed under Subdivision 40-B or 40-C. Note: Subdivision 40-B deals with the supply of premises (including a berth at a marina) by way of lease, hire or licence. Subdivision 40-C deals with the sale of residential premises and the supply of residential premises by way of long-term lease. (3) Without limiting subsection (2) or (2A), a supply covered by item 2 in that table is not GST-free if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with a *non-resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity in Australia. (4) A supply is taken, for the purposes of item 3 in that table, to be a supply made to a *recipient who is not in Australia if: (a) it is a supply under an agreement entered into, whether directly or indirectly, with an *Australian resident; and (b) the supply is provided, or the agreement requires it to be provided, to another entity outside Australia. Subdivision 38-F-Religious services 38-220 Religious services A supply is GST-free if it is a supply of service that: (a) is supplied by a religious institution; and (b) is integral to the practice of that religion. Subdivision 38-G-Activities of charitable institutions etc. 38-250 Nominal consideration etc. (1) A supply is GST-free if: (a) the supplier is a charitable institution, a trustee of a charitable fund, a *gift-deductible entity or a *government school; and (b) the supply is for *consideration that: (i) if the supply is a supply of accommodation-is less than 75% of the *GST inclusive market value of the supply; or (ii) if the supply is not a supply of accommodation-is less than 50% of the GST inclusive market value of the supply. (2) A supply is GST-free if: (a) the supplier is a charitable institution, a trustee of a charitable fund, a *gift-deductible entity or a *government school; and (b) the supply is for *consideration that: (i) if the supply is a supply of accommodation-is less than 75% of the cost to the supplier of providing the accommodation; or (ii) if the supply is not a supply of accommodation-is less than 75% of the consideration the supplier provided, or was liable to provide, for acquiring the thing supplied. (3) Subsections (1) and (2) do not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Subsections (1) and (2) do not apply in relation to an entity that is both a charitable institution and a gift- deductible entity unless the entity is an endorsed charitable institution. (4) Subsections (1) and (2) do not apply to a supply by a *gift- deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30-120 of the ITAA 1997, unless: (a) the supplier is: (i) a charitable institution or a trustee of a charitable fund; or (ii) a *government school; or (iii) a fund, authority or institution of a kind referred to in paragraph 30-125(1)(b) of the ITAA 1997; or (b) each purpose to which the supply relates is a *gift-deductible purpose of the supplier. Note: This subsection denies GST-free status under this section to supplies by certain (but not all) gift-deductible entities that are only endorsed for the operation of a fund, authority or institution. However, supplies can be GST-free under this section if they relate to the principal purpose of the fund, authority or institution. 38-255 Second-hand goods (1) A supply of *second-hand goods is GST-free if: (a) the supplier is a charitable institution, a trustee of a charitable fund, a *gift-deductible entity or a *government school; and (b) the goods were supplied to the institution, trustee, gift- deductible entity or government school: (i) as a gift; or (ii) by way of a supply that was GST-free because of a previous application of this section. However, the supply is not GST-free if the institution, trustee, gift-deductible entity or government school has dealt with the goods in such a way that the goods no longer have their original character. (2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution. (3) Subsection (1) does not apply to a supply by a *gift-deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30-120 of the ITAA 1997, unless: (a) the supplier is: (i) a charitable institution or a trustee of a charitable fund; or (ii) a *government school; or (iii) a fund, authority or institution of a kind referred to in paragraph 30-125(1)(b) of the ITAA 1997; or (b) each purpose to which the supply relates is a *gift-deductible purpose of the supplier. Note: This subsection denies GST-free status under this section to supplies by certain (but not all) gift-deductible entities that are only endorsed for the operation of a fund, authority or institution. However, supplies can be GST-free under this section if they relate to the principal purpose of the fund, authority or institution. 38-260 Supplies of retirement village accommodation etc. A supply is GST-free if: (a) the supplier is an *endorsed charitable institution, or an *endorsed trustee of a charitable fund, that operates a *retirement village; and (b) the supply is made to a resident of the retirement village; and (c) the supply is: (i) a supply of accommodation in the retirement village, or a supply of a service related to the supply of the accommodation; or (ii) a supply of meals. 38-270 Raffles and bingo conducted by charitable institutions etc. (1) A supply is GST-free if: (a) the supplier is a charitable institution, a trustee of a charitable fund, a *gift-deductible entity or a *government school; and (b) the supply is: (i) a supply of a ticket in a raffle; or (ii) an acceptance of a person's participation in a game of bingo; or (iii) a *gambling supply of a kind specified in the regulations; and (c) the supply does not contravene a *State law or a *Territory law. (2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution. (3) Subsection (1) does not apply to a supply by a *gift-deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30-120 of the ITAA 1997, unless: (a) the supplier is: (i) a charitable institution or a trustee of a charitable fund; or (ii) a *government school; or (iii) a fund, authority or institution of a kind referred to in paragraph 30-125(1)(b) of the ITAA 1997; or (b) each purpose to which the supply relates is a *gift-deductible purpose of the supplier. Note: This subsection denies GST-free status under this section to supplies by certain (but not all) gift-deductible entities that are only endorsed for the operation of a fund, authority or institution. However, supplies can be GST-free under this section if they relate to the principal purpose of the fund, authority or institution. Subdivision 38-I-Water, sewerage and drainage 38-285 Water (1) A supply of water is GST-free. (2) However, a supply of water is not GST-free under this section if it is: (a) supplied in a container; or (b) transferred into a container; that has a capacity of less than 100 litres or such other quantity as the regulations specify. (3) It does not matter whether or not the amount of water supplied or transferred fills the container. 38-290 Sewerage and sewerage-like services (1) A supply of sewerage services is GST-free. (2) A supply that consists of removing waste matter from *residential premises is GST-free if: (a) the premises are not serviced by sewers; and (b) the waste matter is of a kind that would normally be removed using sewers if the premises were serviced by sewers. (3) A supply that consists of servicing a domestic self-contained sewage system is GST-free. 38-295 Emptying of septic tanks A supply of a service that consists of the emptying of a septic tank is GST-free. 38-300 Drainage A supply of a service that consists of draining storm water is GST-free. Subdivision 38-J-Supplies of going concerns 38-325 Supply of a going concern (1) The *supply of a going concern is GST-free if: (a) the supply is for *consideration; and (b) the *recipient is *registered or *required to be registered; and (c) the supplier and the recipient have agreed in writing that the supply is of a going concern. (2) A supply of a going concern is a supply under an arrangement under which: (a) the supplier supplies to the *recipient all of the things that are necessary for the continued operation of an *enterprise; and (b) the supplier carries on, or will carry on, the enterprise until the day of the supply (whether or not as a part of a larger enterprise carried on by the supplier). Subdivision 38-K-Transport and related matters 38-355 Supplies of transport and related matters The third column of this table sets out supplies that are GST- free: |Supplies of transport and related matters | |Item|Topic |These supplies are GST-free ... | |1 |Transport of|the transport of a passenger: | | |passengers |(a) from the last place of departure | | |to, from or |in Australia to a destination outside| | |outside |Australia; or | | |Australia |(b) from a place outside Australia to| | | |the first place of arrival in | | | |Australia; or | | | |(c) from a place outside Australia to| | | |the same or another place outside | | | |Australia. | |2 |Transport of|the transport of a passenger within | | |passengers |Australia by air, but only if: | | |on domestic |(a) the transport is part of a wider | | |legs of |arrangement, itinerary or contract | | |internationa|for transport by air involving | | |l flights |international travel; and | | | |(b) at the time the arrangement, | | | |itinerary or contract was entered | | | |into, the transport within Australia | | | |formed part of a ticket for | | | |international travel, or was cross | | | |referenced to such a ticket, issued | | | |at that time. | |3 |Domestic air|the transport of a passenger within | | |travel of |Australia by air, but only if: | | |non-resident|(a) the passenger is a *non-resident;| | |s |and | | | |(b) the supply was purchased while | | | |the passenger was outside Australia. | |4 |Transport of|the transport of a passenger within | | |passengers |Australia by sea, but only if: | | |on domestic |(a) the transport is part of a | | |legs of |journey by sea from Australia to a | | |internationa|destination outside Australia, or | | |l sea |from a destination outside Australia | | |voyages |to Australia; and | | | |(b) the transport is provided by the | | | |supplier who transports the passenger| | | |to or from Australia. | |5 |Transport |the *international transport of | | |etc. of |goods: | | |goods |(a) from their *place of export in | | | |Australia to a destination outside | | | |Australia; or | | | |(b) from a place outside Australia to| | | |their *place of consignment in | | | |Australia; or | | | |(c) from a place outside Australia to| | | |the same or another place outside | | | |Australia. | | | |However, paragraph (a) or (b) only | | | |applies to the transport of the goods| | | |within Australia if it is supplied by| | | |the supplier of the transport of the | | | |goods from or to Australia (whichever| | | |is relevant). | |6 |Insuring |(a) insuring transport covered by | | |transport |item 1, 2, 3 or 4; or | | |etc. |(b) insuring the *international | | | |transport of goods from their *place | | | |of export in Australia to a | | | |destination outside Australia; or | | | |(c) insuring: | | | |(i) the transport of goods from a | | | |place outside Australia to their | | | |*place of consignment in Australia; | | | |and | | | |(ii) the subsequent transport of | | | |those goods within Australia, if it | | | |is an integral part of the transport | | | |of goods from the place outside | | | |Australia to the place of consignment| | | |in Australia; | | | |including loading and handling within| | | |Australia that is part of that | | | |transport; or | | | |(d) insuring the transport of goods | | | |from a place outside Australia to the| | | |same or another place outside | | | |Australia. | |7 |Arranging |(a) arranging transport covered by | | |transport |item 1, 2, 3 or 4; or | | |etc. |(b) arranging the *international | | | |transport of goods covered by item 5;| | | |or | | | |(c) arranging insurance covered by | | | |item 6. | 38-360 Travel agents arranging overseas supplies A supply is GST-free if: (a) the supplier makes it in the course of *carrying on an *enterprise as a travel agent; and (b) it consists of arranging for the making of a supply, the effective use or enjoyment of which is to take place outside Australia. Subdivision 38-L-Precious metals 38-385 Supplies of precious metals A supply of *precious metal is GST-free if: (a) it is the first supply of that precious metal after its refining by, or on behalf of, the supplier; and (b) the entity that refined the precious metal is a *refiner of precious metal; and (c) the *recipient of the supply is a *dealer in precious metal. Note: Any other supply of precious metal is input taxed under section 40-100. Subdivision 38-M-Supplies through inwards duty free shops 38-415 Supplies through inwards duty free shops A supply is GST-free if the supply is a sale of *airport shop goods through an *inwards duty free shop to a *relevant traveller. Subdivision 38-N-Grants of land by governments 38-445 Grants of freehold and similar interests by governments (1) A supply by the Commonwealth, a State or a Territory of land on which there are no improvements is GST-free if: (a) the supply is of a freehold interest in the land; or (b) the supply is by way of *long-term lease. (1A) A supply by the Commonwealth, a State or a Territory of land is GST-free if: (a) the supply is of a freehold interest in the land, or is by way of *long-term lease; and (b) the Commonwealth, State or Territory had previously supplied the land, by way of lease, to the *recipient of the supply; and (c) at the time of that previous supply, there were no improvements on the land; and (d) because conditions to which that lease was subject had been satisfied, the recipient was entitled to the supply of the freehold interest or the supply by way of long-term lease. (2) However, the supply is not GST-free if, since 1 July 2000, the land has already been the subject of a supply that is GST-free under this section. 38-450 Leases preceding grants of freehold and similar interests by governments (1) A supply by the Commonwealth, a State or a Territory of land on which there are no improvements is GST-free if: (a) the supply is by way of lease (other than *long-term lease); and (b) the lease is subject to conditions the satisfaction of which will entitle the *recipient of the supply to the grant of a freehold interest in the land or a long-term lease of the land. (2) A supply consisting of the surrender, to the Commonwealth, a State or Territory, of a lease over land is GST-free if: (a) the supplier acquired the land under a supply that: (i) was GST-free under subsection (1); or (ii) if the supply was made before 1 July 2000-would have been GST- free under subsection (1) if it had been made on or after that day; and (b) solely or partly in return for the surrender of the lease, the Commonwealth, State or Territory makes a supply of the land to the supplier that is GST-free under section 38-445. Subdivision 38-O-Farm land 38-475 Subdivided farm land (1) The supply of a freehold interest in, or the lease by an *Australian government agency of or the *long term lease of, *potential residential land is GST-free if: (a) the land is subdivided from land on which a *farming business has been *carried on for at least 5 years; and (b) the supply is made to an *associate of the supplier of the land without *consideration or for consideration that is less than the *GST inclusive market value of the supply. (2) An entity *carries on a farming business if it carries on a *business of: (a) cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment; or (b) maintaining animals for the purpose of selling them or their bodily produce (including natural increase); or (c) manufacturing dairy produce from raw material that the entity produced; or (d) planting or tending trees in a plantation or forest that are intended to be felled. 38-480 Farm land supplied for farming The supply of a freehold interest in, or the lease by an *Australian government agency of or the *long term lease of, land is GST-free if: (a) the land is land on which a *farming business has been *carried on for at least the period of 5 years preceding the supply; and (b) the *recipient of the supply intends that a farming business be carried on, on the land. Subdivision 38-P-Cars for use by disabled people 38-505 Disabled veterans (1) A supply is GST-free if it is a supply of a *car to an individual who: (a) has served in the Defence Force or in any other armed force of Her Majesty; and (b) as a result of that service: (i) has lost a leg or both arms; or (ii) has had a leg, or both arms, rendered permanently and completely useless; or (iii) is a veteran to whom section 24 of the Veterans' Entitlements Act 1986 applies and receives a pension under Part II of that Act; or (iv) is receiving a Special Rate Disability Pension under Part 6 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004, or satisfies the eligibility criteria in section 199 of that Act; and (c) intends to use the car in his or her personal transportation during all of the *Subdivision 38-P period. (2) However, a supply covered by subsection (1) is not GST-free to the extent that the *GST inclusive market value of the *car exceeds the *car limit. (3) In working out the *GST inclusive market value of the *car for the purposes of subsection (2), disregard any value that is attributable to modifications made to the car solely for the purpose of: (a) adapting it for driving by the person; or (b) adapting it for transporting the person. (4) A supply is GST-free if it is a supply of *car parts that are for a *car for an individual to whom paragraphs (1)(a), (b) and (c) apply. 38-510 Other disabled people (1) A supply is GST-free if it is a supply of a *car to an individual who: (a) has a current disability certificate issued by: (i) the person holding the position of Managing Director of the nominated company (within the meaning of Part 2 of the Hearing Services and AGHS Reform Act 1997); or (ii) an officer or employee of that company who is authorised in writing by the Managing Director for the purposes of this section; certifying that the individual has lost the use of one or more limbs to such an extent that he or she is unable to use public transport; and (b) intends to use the car in his or her personal transportation to or from gainful employment during all of the *Subdivision 38-P period. (2) However, a supply covered by subsection (1) is not GST-free to the extent that the *GST inclusive market value of the *car exceeds the *car limit. (3) In working out the *GST inclusive market value of the *car for the purposes of subsection (2), disregard any value that is attributable to modifications made to the car solely for the purpose of: (a) adapting it for driving by the individual; or (b) adapting it for transporting the individual. (4) A supply is GST-free if it is a supply of *car parts that are for a *car for an individual to whom paragraphs (1)(a) and (b) applies. Subdivision 38-Q-International mail 38-540 International mail A supply is GST-free if it is a supply of services to a foreign postal administration for: (a) the delivery in Australia; or (b) the transit through Australia; of postal articles mailed outside Australia. Division 40-Input taxed supplies Table of Subdivisions 40-A Financial supplies 40-B Residential rent 40-C Residential premises 40-D Precious metals 40-E School tuckshops and canteens 40-F Fund-raising events conducted by charitable institutions etc. 40-1 What this Division is about This Division provides for the supplies that are input taxed. If a supply is input taxed, then: . no GST is payable on the supply; . there is no entitlement to an input tax credit for anything acquired or imported to make the supply (see sections 11-15 and 15-10). For the basic rules about supplies that are input taxed, see sections 9-30 and 9-80. Subdivision 40-A-Financial supplies 40-5 Financial supplies (1) A *financial supply is input taxed. (2) Financial supply has the meaning given by the regulations. Subdivision 40-B-Residential rent 40-35 Residential rent (1) A supply of premises that is by way of lease, hire or licence (including a renewal or extension of a lease, hire or licence) is input taxed if: (a) the supply is of *residential premises (other than a supply of *commercial residential premises or a supply of accommodation in commercial residential premises provided to an individual by the entity that owns or controls the commercial residential premises); or (b) the supply is of *commercial accommodation and Division 87 (which is about long-term accommodation in commercial premises) would apply to the supply but for a choice made by the supplier under section 87-25. (1A) A supply of a berth at a marina that is by way of lease, hire or licence (including a renewal or extension of a lease, hire or licence) is input taxed if: (a) the berth is occupied, or is to be occupied, by a *ship used as a residence; and (b) the supply is of *commercial accommodation and Division 87 (which is about long-term accommodation in commercial premises) would apply to the supply but for a choice made by the supplier under section 87-25. (2) However: (a) the supply is input taxed only to the extent that the premises are to be used predominantly for residential accommodation (regardless of the term of occupation); and (b) the supply is not input taxed under this section if the lease, hire or licence, or the renewal or extension of a lease, hire or licence, is a *long-term lease. Subdivision 40-C-Residential premises 40-65 Sales of residential premises (1) A sale of *real property is input taxed, but only to the extent that the property is *residential premises to be used predominantly for residential accommodation (regardless of the term of occupation). (2) However, the sale is not input taxed to the extent that the *residential premises are: (a) *commercial residential premises; or (b) *new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998. 40-70 Supplies of residential premises by way of long-term lease (1) A supply is input taxed if: (a) the supply is of *real property but only to the extent that the property is *residential premises to be used predominantly for residential accommodation (regardless of the term of occupation); and (b) the supply is by way of *long-term lease. (2) However, the supply is not input taxed to the extent that the *residential premises are: (a) *commercial residential premises; or (b) *new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998. 40-75 Meaning of new residential premises (1) *Residential premises are new residential premises if they: (a) have not previously been sold as residential premises (other than *commercial residential premises) and have not previously been the subject of a *long-term lease; or (b) have been created through *substantial renovations of a building; or (c) have been built, or contain a building that has been built, to replace demolished premises on the same land. (2) However, the premises are not new residential premises if, for the period of at least 5 years since: (a) if paragraph (1)(a) applies (and neither paragraph (1)(b) nor paragraph (1)(c) applies)-the premises first became *residential premises; or (b) if paragraph (1)(b) applies-the premises were last *substantially renovated; or (c) if paragraph (1)(c) applies-the premises were last built; the premises have only been used for making supplies that are *input taxed because of paragraph 40-35(1)(a). (2A) A supply of the premises is disregarded as a sale for the purposes of applying paragraph (1)(a): (a) if it is a supply by a member of a *GST group to another member of the GST group; or (b) if: (i) it is a supply by the *joint venture operator of a *GST joint venture to another entity that is a *participant in the joint venture; and (ii) the other entity acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into. (3) To avoid doubt, if the *residential premises are new residential premises because of paragraph (1)(b) or (c), the new residential premises include land of which the new residential premises are a part. Subdivision 40-D-Precious metals 40-100 Precious metals A supply of *precious metal is input taxed. Note: If the supply is the first supply of precious metal after refinement, the supply is GST-free under section 38-385. Subdivision 40-E-School tuckshops and canteens 40-130 School tuckshops and canteens (1) A supply of *food is input taxed if: (a) the supply is made by a non-profit body through a shop operating on the grounds of a *school that supplies *primary courses or *secondary courses; and (b) the non-profit body chooses to have all its supplies of food through the shop treated as input taxed. (2) However, the non-profit body: (b) cannot revoke the choice within 12 months after the day on which the non-profit body made the choice; and (c) cannot make a further choice within 12 months after the day on which the non-profit body revoked a previous choice. (3) This section does not apply to a supply of *food by a *school to boarding students of the school as part of their board. Subdivision 40-F-Fund-raising events conducted by charitable institutions etc. 40-160 Fund-raising events conducted by charitable institutions etc. (1) A supply is input taxed if: (a) the supplier is a charitable institution, a trustee of a charitable fund, a *gift-deductible entity or a *government school; and (b) the supply is made in connection with a *fund-raising event; and (c) the supplier chooses to have all supplies that it makes in connection with the event treated as input taxed; and (d) the event is referred to in the supplier's records as an event that is treated as input taxed. (2) Subsection (1) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Subsection (1) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution. (3) Subsection (1) does not apply to a supply by a *gift-deductible entity endorsed as a deductible gift recipient (within the meaning of the *ITAA 1997) under section 30-120 of the ITAA 1997, unless: (a) the supplier is: (i) a charitable institution or a trustee of a charitable fund; or (ii) a *government school; or (iii) a fund, authority or institution of a kind referred to in paragraph 30-125(1)(b) of the ITAA 1997; or (b) each purpose to which the supply relates is a *gift-deductible purpose of the supplier. Note: This subsection denies input taxed status under this section to supplies by certain (but not all) gift-deductible entities that are only endorsed for the operation of a fund, authority or institution. However, supplies can be input taxed under this section if they relate to the principal purpose of the fund, authority or institution. 40-165 Meaning of fund-raising event (1) Any of these is a fund-raising event if it is conducted for the purpose of fund-raising and it does not form any part of a series or regular run of like or similar events: (a) a fete, ball, gala show, dinner, performance or similar event; (b) an event comprising sales of goods if: (i) each sale is for a *consideration that does not exceed $20 or such other amount as the regulations specify; and (ii) selling such goods is not a normal part of the supplier's *business; (c) an event that the Commissioner decides, on an application by the supplier in writing, to be a fund-raising event. Note: Refusing an application for a decision under this paragraph is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) Paragraph (1)(b) does not apply to an event that involves the sale of alcoholic beverages or tobacco products. (3) The Commissioner must not make a decision under paragraph (1)(c) unless satisfied that: (a) the supplier is not in the *business of conducting such events; and (b) the proceeds from conducting the event are for the direct benefit of the supplier's charitable or non-profit purposes. (4) The Commissioner may determine, in writing, the frequency with which events may be held without forming any part of a series or regular run of like or similar events for the purposes of subsection (1). Part 3-2-Non-taxable importations Division 42-Non-taxable importations 42-1 What this Division is about This Division sets out the importations that are non-taxable. No GST is payable on an importation that is non-taxable (see sections 7-1 and 13-5). For the basic rules about non-taxable importations, see sections 13- 10 and 13-25. 42-5 Non-taxable importations-Schedule 4 to the Customs Tariff Act 1995 (1) An importation of goods is a non-taxable importation if the goods are covered by item 4, 8, 15, 18A, 18B, 18C, 21, 21A, 23A, 23B, 24, 25A, 25B, 25C, 32A, 32B, 33A, 33B or 64 in Schedule 4 to the Customs Tariff Act 1995. (1A) An importation of a container is a non-taxable importation if: (a) goods covered by item 34 in Schedule 4 to the Customs Tariff Act 1995 are imported in or on the container; and (b) the container will be exported from Australia without being put to any other use. (1C) An importation of goods is a non-taxable importation if the goods are covered by: (a) item 1A, 1B, 1C, 1D, 1E, 5, 6, 9 or 16 in Schedule 4 to the Customs Tariff Act 1995; and (b) regulations made for the purposes of this subsection. (2) To avoid doubt, a reference to goods that are covered by an item in Schedule 4 to the Customs Tariff Act 1995 includes a reference to goods to which that item would apply apart from the operation of subsection 18(1) of that Act. 42-10 Goods returned to Australia in an unaltered condition (1) An importation of goods is a non-taxable importation if: (a) the goods were exported from Australia and are returned to Australia, without having been subject to any treatment, industrial processing, repair, renovation, alteration or any other process since their export; and (b) the importer was not entitled to, and did not claim, a payment under Division 168 (about the tourist refund scheme) related to the export of the goods; and (c) the importer: (i) is the manufacturer of the goods; or (ii) has previously acquired the goods, and the supply by means of which the importer acquired the goods was a *taxable supply (or would have been a taxable supply but for section 66- 45); or (iii) has previously imported the goods, and the previous importation was a *taxable importation in respect of which the GST was paid. (2) An importation of goods is a non-taxable importation if: (a) the importer had manufactured, acquired or imported the goods before 1 July 2000; and (b) the goods were exported from Australia before, on or after 1 July 2000; and (c) the goods are returned to Australia on or after 1 July 2000, without having been subject to any treatment, industrial processing, repair, renovation, alteration or any other process since their export; and (d) the importer was not entitled to, and did not claim, a payment under Division 168 (about the tourist refund scheme) related to the export of the goods; and (e) the ownership of the goods when they are returned to Australia is the same as their ownership on 1 July 2000. Note: An importation covered by this section may also be duty- free under item 17 of Schedule 4 to the Customs Tariff Act 1995. Chapter 4-The special rules Division 45-Introduction 45-1 What this Chapter is about This Chapter sets out the special rules for the GST. The special rules apply only in particular circumstances, and are generally quite limited in their scope. The special rules modify the application of the basic rules for the GST in Chapter 2. Note 1: The special rules that modify each group of basic rules in Chapter 2 are specifically identified in tables located at the end of the Divisions and Subdivisions in Chapter 2. In addition, a checklist of special rules is set out in Part 2- 8. Note 2: This section is an explanatory section. 45-5 The effect of special rules The provisions of this Chapter override the provisions of Chapter 2 (except section 29-25), but only to the extent of any inconsistency. Part 4-1-Special rules mainly about particular ways entities are organised Note: The special rules in this Part mainly modify the operation of Part 2- 2 so far as that Part deals with liability for GST and entitlement to input tax credits, but the special rules also affect other aspects of Part 2-2 and the other Parts of Chapter 2. Division 48-GST groups Table of Subdivisions 48-A Approval of GST groups 48-B Consequences of approval of GST groups 48-C Administrative matters 48-D Ceasing to be a member of a GST group 48-1 What this Division is about Companies within a 90% owned group, and in some cases other entities (such as non-profit bodies), can be approved as a GST group. One member of the group then deals with all the GST liabilities and entitlements (except for GST on most taxable importations) of the group, and (in most cases) intra-group transactions are excluded from the GST. Note: Provisions for members of GST groups apply for the wine equalisation tax (see Subdivision 21-B of the A New Tax System (Wine Equalisation Tax) Act 1999) and the luxury car tax (see Subdivision 16-A of the A New Tax System (Luxury Car Tax) Act 1999). Subdivision 48-A-Approval of GST groups 48-5 Approval of GST groups (1) The Commissioner must approve 2 or more entities as a *GST group if: (a) the entities jointly apply, in the *approved form, for approval as a GST group; and (b) each of the entities *satisfies the membership requirements for that GST group; and (c) the application nominates one of the entities to be the *representative member for the group; and (d) the entity so nominated is an *Australian resident. A group of entities that is so approved is a GST group. (2) If 2 or more entities would *satisfy the membership requirements of that *GST group, the application need not include all those entities. Note: Refusing an application for approval under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 48-10 Membership requirements of a GST group (1) An entity satisfies the membership requirements of a *GST group, or a proposed GST group, if the entity: (a) is: (i) a *company; or (ii) a *partnership, trust or individual that satisfies the requirements specified in the regulations; and (b) is, if the entity is a company, a company of the same *90% owned group as all the other members of the GST group or proposed GST group that are also companies; and (c) is *registered; and (d) has the same tax periods applying to it as the tax periods applying to all the other members of the GST group or proposed GST group; and (e) accounts on the same basis as all the other members of the GST group or proposed GST group; and (f) is not a member of any other GST group; and (g) does not have any branch that is registered under Division 54. (2) Paragraph (1)(b) does not apply if: (a) the entity is a non-profit body; and (b) all the other members of the GST group or proposed GST group are non-profit bodies; and (c) the entity and all those other members are members of the same *non-profit association. Note 1: For the membership requirements of non-profit sub- entities, see section 63-50. Note 2: For the membership requirements of a GST group of government related entities, see section 149-25. (3) A *company does not satisfy the membership requirements of a *GST group, or a proposed GST group, if: (a) one or more other members of the GST group or proposed GST group are not companies; and (b) none of the members of the GST group or proposed GST group that are companies satisfy section 48-15. 48-15 Relationship of companies and non-companies in a GST group (1) A *company that is a member of a *GST group, or a proposed GST group, satisfies this section if: (a) a *partnership, trust or individual that is a member of the GST group or proposed GST group would, if it were another company, have *at least a 90% stake in that company; or (b) the company has only one member, and that member: (i) is a partner in a partnership that is a member of the GST group or proposed GST group; or (ii) is an individual that is a member of the GST group or proposed GST group; or (iii) is a *family member of that partner or individual; or (c) the company has more than one member, each of whom is: (i) a partner in the same partnership that is a member of the GST group or proposed GST group; or (ii) a family member of any such partner; and one of the following applies: (iii) at least 2 of the partners are members of the company; (iv) one of the partners is a member of the company, and at least one other member of the company is a family member of a different partner; (v) none of the partners is a member of the company, and the members of the company are not all family members of the same partner and no other partner; or (d) the company has more than one member, each of whom is: (i) an individual who is a member of the GST group or proposed GST group; or (ii) a family member of that individual; or (e) a trust is a member of the GST group or proposed GST group, and distributions of income or capital of the trust are not made except to an entity that is: (i) the company; or (ii) any other company that is a member of the GST group or proposed GST group; or (iia) a member of, or a family member of a member of, any company referred to in subparagraph (i) or (ii) that is a company to which subsection (1A) applies; or (iii) a charitable institution, a trustee of a charitable fund or a *gift-deductible entity. (1AA) Subparagraph (1)(e)(iii) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Subparagraph (1)(e)(iii) does not apply in relation to an entity that is both a charitable institution and a gift- deductible entity unless the entity is an endorsed charitable institution. (1A) This subsection applies to a company if: (a) the company has only one member; or (b) the company has more than one member, and: (i) at least 2 of the members are beneficiaries of the trust in question (either directly, or indirectly through one or more interposed trusts); or (ii) one of the members is such a beneficiary, and at least one other such beneficiary is a *family member of a different member of the company; or (iii) none of the members is such a beneficiary, and those family members (of the members of the company) who are such beneficiaries are not all family members of the same member of the company and no other member. (2) A person is a family member of an individual if the individual's family, within the meaning of section 272-95 of Schedule 2F to the *ITAA 1936, includes that person. There are no family members of an entity that is not an individual. Subdivision 48-B-Consequences of approval of GST groups 48-40 Who is liable for GST (1) GST payable on any *taxable supply or *taxable importation that a *member of a *GST group makes: (a) is payable by the *representative member; and (b) is not payable by the member that made it (unless the member is the representative member). Note: However, each member is jointly and severally liable to pay the GST that is payable by the representative member (see section 444-90 in Schedule 1 to the Taxation Administration Act 1953). (2) However: (a) a supply that an entity makes to another *member of the same *GST group is treated as if it were not a *taxable supply, unless: (i) it is a taxable supply because of Division 84 (which is about offshore supplies other than goods or real property); or (ii) the entity is a participant in a *GST joint venture and acquired the thing supplied from the *joint venture operator for the joint venture; and (b) this section only applies to GST payable on a *taxable importation made, by a member of the GST group other than the *representative member, if the GST on the importation is payable at a time when GST on *taxable supplies is normally payable by the representative member. (3) This section has effect despite sections 9-40 and 13-15 (which are about liability for GST). 48-45 Who is entitled to input tax credits (1) If a *member of a *GST group makes a *creditable acquisition or *creditable importation: (a) the *representative member is entitled to the input tax credit on the acquisition or importation; and (b) the member making the acquisition or importation is not entitled to the input tax credit on the acquisition or importation (unless the member is the representative member). (2) In deciding, for the purposes of subsection (1), whether an acquisition or importation by a *member of a *GST group is a *creditable acquisition or *creditable importation, the acquisition or importation is treated as being solely or partly for a *creditable purpose if, and only if, it would be so treated if: (a) the GST group were treated as a single entity; and (b) the GST group were not treated as a number of entities corresponding to the members of the GST group. (3) However, an acquisition that an entity makes from another *member of the same *GST group is not a *creditable acquisition unless the supply of the thing acquired by the entity was a *taxable supply because of Division 84 (which is about offshore supplies other than goods or real property). (4) This section has effect despite sections 11-5 and 15-5 (which are about what are creditable acquisitions and creditable importations), and sections 11-20 and 15-15 (which are about who is entitled to input tax credits). 48-50 Adjustments (1) Any *adjustment that a *member of a *GST group has is to be treated as if: (a) that member did not have the adjustment (unless that member is the *representative member); and (b) the representative member had the adjustment. (2) This section has effect despite section 17-10 (which is about the effect of adjustments on net amounts). 48-55 GST groups treated as single entities for certain purposes (1) Despite sections 48-45 and 48-50, a *GST group is treated as a single entity, and not as a number of entities corresponding to the *members of the GST group, for the purposes of working out: (a) the amounts of any input tax credits to which the *representative member is entitled; and (b) whether the representative member has any *adjustments; and (c) the amounts of any such adjustments. (1A) If: (a) while you were not a *member of any *GST group, you acquired or imported a thing; and (b) you become a member of a GST group at a time when you still hold the thing; then, when the *representative member of the GST group applies section 129-40 for the first time after you became a member of the GST group, the *intended or former application of the thing is the extent of *creditable purpose last used to work out: (c) the amount of the input tax credit to which you were entitled for the acquisition or importation; or (d) the amount of any *adjustment you had under Division 129 in relation to the thing; as the case requires. (2) This section has effect despite section 11-25 (which is about the amount of input tax credits) and section 17-10 (which is about the effect of adjustments on net amounts). 48-60 GST returns (1) If you are a *member of a *GST group during the whole of a tax period, you are not required to give to the Commissioner a *GST return for that tax period, unless you are the *representative member of the group during that period. (2) This section has effect despite section 31-5 (which is about who must give GST returns). Subdivision 48-C-Administrative matters 48-70 Changing the membership etc. of GST groups Changes made on application (1) The Commissioner must, if the *representative member of a *GST group applies to the Commissioner in the *approved form, do one or more of these (as requested in the application): (a) approve, as an additional *member of the GST group, another entity that *satisfies the membership requirements for the GST group; (b) revoke the approval of one of the members of the GST group as a member of the group; (c) approve another member of the GST group to replace the applicant as the representative member of the group. Note: Refusing an application for approval or revocation under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). Changes made without application (2) The Commissioner must revoke the approval of one of the *members of a *GST group if satisfied that the member does not *satisfy the membership requirements for the GST group. Note: Revoking under this subsection an approval under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 48-75 Revoking the approval of GST groups Revoking on application (1) The Commissioner must, if the *representative member of a *GST group applies to the Commissioner in the *approved form, revoke the approval of the group as a GST group. Note: Refusing an application for revocation under this subsection is a reviewable GST decision (see Subdivision 110- F in Schedule 1 to the Taxation Administration Act 1953). Revoking without application (2) The Commissioner must revoke the approval of the *GST group if satisfied that none of its members, or only one of its members, *satisfies the membership requirements for that GST group. Note: Revoking under this subsection the approval of a GST group is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 48-80 Notification by representative members The *representative member of a *GST group must notify the Commissioner of any circumstances under which the Commissioner must: (a) revoke the approval of one of the *members of the group under subsection 48-70(2); or (b) revoke the approval of the group under subsection 48-75(2). The notification may (in appropriate cases) be in the form of an application under subsection 48-70(1). The notification, or application, must be given to the Commissioner within 21 days after the circumstances occurred. 48-85 Date of effect of approvals and revocations (1) The Commissioner must decide the date of effect of any approval, or any revocation of an approval, under this Division. (2) The date of effect may be the day of the decision, or a day before or after that day. (3) However, the date of effect must be: (a) the beginning of a tax period applying to the members of the *GST group in question; or (b) a day during an *annual tax period, or an *instalment tax period, applying to the members of the GST group. Note: Deciding under this section the date of effect of any approval, or any revocation of an approval, under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 48-90 Notification by the Commissioner The Commissioner must give notice of any decision that he or she makes under this Division: (a) if the decision relates to the approval of 2 or more companies as a *GST group-to the company nominated in the application for approval to be the *representative member of the group; or (b) otherwise-to the representative member of the *GST group to which the decision relates. Subdivision 48-D-Ceasing to be a member of a GST group 48-110 Adjustments after you cease to be a member of a GST group (1) If you *cease to be a member of a GST group (the first GST group), any *adjustment that arises afterwards in relation to a supply, acquisition or importation that you made while a *member of the first GST group (other than a supply to, or an acquisition from, another member of that group): (a) is an adjustment that you have; and (b) is not an adjustment of the entity that is or was the *representative member of the first GST group (unless you were that representative member). (2) In relation to the first GST group, this section has effect despite section 48-50 (which is about who has adjustments for a GST group). 48-115 Changes in extent of creditable purpose after you cease to be a member of a GST group (1) If: (a) either: (i) while you were a *member of a *GST group (the first GST group), you acquired a thing (other than from another member of that group) or imported a thing; or (ii) you acquired or imported a thing while you were not a member of any GST group, and you subsequently became a member of a GST group (the first GST group) while you still held the thing; and (b) you *cease to be a member of the first GST group; then, when applying section 129-40 for the first time after that cessation, the *intended or former application of the thing is the extent of *creditable purpose last used to work out: (c) the amount of the input tax credit to which you or the *representative member was entitled for the acquisition or importation; or (d) the amount of any *adjustment you or the representative member had under Division 129 in relation to the thing. (2) If: (a) while you were a *member of a *GST group (the first GST group), you acquired a thing (other than from another member of that group) or imported a thing; and (b) you have *ceased to be a member of the first GST group; and (c) you have an *adjustment under Division 129 in relation to the thing, or the *representative member of another GST group of which you are a *member has that adjustment; then, for the purposes of working out the full input tax credit in section 129-70 or 129-75, you are taken not to have been a member of a GST group when you acquired or imported the thing. Division 49-GST religious groups Table of Subdivisions 49-A Approval of GST religious groups 49-B Consequences of approval of GST religious groups 49-C Administrative matters 49-1 What this Division is about Some registered charitable bodies can be approved as a GST religious group. Transactions between members of the group are then excluded from the GST. Subdivision 49-A-Approval of GST religious groups 49-5 Approval of GST religious groups The Commissioner must approve 2 or more entities as a *GST religious group if: (a) the entities jointly apply, in the *approved form, for approval as a GST religious group; and (b) each of the entities *satisfies the membership requirements for that GST religious group; and (c) the application nominates one of the entities to be the *principal member for the group; and (d) the entity so nominated is an *Australian resident. A group of entities that is so approved is a GST religious group. Note: Refusing an application for approval under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 49-10 Membership requirements of a GST religious group An entity satisfies the membership requirements of a *GST religious group, or a proposed GST religious group, if: (a) the entity is *registered; and (b) the entity is endorsed as exempt from income tax under Subdivision 50-B of the *ITAA 1997; and (c) all the other members of the GST religious group or proposed GST religious group are so endorsed; and (d) the entity and all those other members are part of the same religious organisation; and (e) the entity is not a member of any other GST religious group. Subdivision 49-B-Consequences of approval of GST religious groups 49-30 Supplies between members of GST religious groups (1) A supply that a *member of a *GST religious group makes to another member of the same GST religious group is treated as if it were not a *taxable supply. (2) This section has effect despite section 9-5 (which is about what are taxable supplies). 49-35 Acquisitions between members of GST religious groups (1) An acquisition that a *member of a *GST religious group makes from another member of the same GST religious group is treated as if it were not a *creditable acquisition. (2) This section has effect despite section 11-5 (which is about what are creditable acquisitions). 49-40 Adjustment events (1) An *adjustment event cannot arise in relation to: (a) a supply that a *member of a *GST religious group makes to another member of the same GST religious group; or (b) an acquisition that a member of a GST religious group makes from another member of the same GST religious group. (2) This section has effect despite section 19-10 (which is about what are adjustment events). 49-45 Changes in the extent of creditable purpose (1) An *adjustment cannot arise under Division 129 in relation to an acquisition that a *member of a *GST religious group makes from another member of the same GST religious group. (2) This section has effect despite section 129-5 (which is about when adjustments can arise under Division 129). 49-50 GST religious groups treated as single entities for certain purposes (1) Despite sections 49-35, 49-40 and 49-45, a *GST religious group is treated as a single entity, and not as a number of entities corresponding to the *members of the GST religious group, for the purposes of working out: (a) whether acquisitions or importations by a member are for a *creditable purpose; and (b) the amounts of any input tax credits to which the member is entitled; and (c) whether the member has any *adjustments; and (d) the amounts of any such adjustments. (2) This section has effect despite section 11-25 (which is about the amount of input tax credits) and section 17-10 (which is about the effect of adjustments on net amounts). Subdivision 49-C-Administrative matters 49-70 Changing the membership etc. of GST religious groups Changes made on application (1) The Commissioner must, if the *principal member of a *GST religious group applies to the Commissioner in the *approved form, do one or more of these (as requested in the application): (a) approve, as an additional *member of the GST religious group, another entity that *satisfies the membership requirements for the GST religious group; (b) revoke the approval of one of the members of the GST religious group as a member of the group; (c) approve another member of the GST religious group to replace the applicant as the principal member of the group. Note: Refusing an application for approval or revocation under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). Changes made without application (2) The Commissioner must revoke the approval of one of the *members of a *GST religious group if satisfied that the member does not *satisfy the membership requirements for the GST religious group. Note: Revoking under this subsection an approval under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 49-75 Revoking the approval of GST religious groups Revoking on application (1) The Commissioner must, if the principal member of a *GST religious group applies to the Commissioner in the *approved form, revoke the approval of the group as a GST religious group. Note: Refusing an application for revocation under this subsection is a reviewable GST decision (see Subdivision 110- F in Schedule 1 to the Taxation Administration Act 1953). Revoking without application (2) The Commissioner must revoke the approval of the *GST religious group if satisfied that none of its members, or only one of its members, *satisfies the membership requirements for that GST religious group. Note: Revoking under this subsection the approval of a GST group is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 49-80 Notification by principal members The principal member of a *GST religious group must notify the Commissioner of any circumstances under which the Commissioner must: (a) revoke the approval of one of the *members of the group under subsection 49-70(2); or (b) revoke the approval of the group under subsection 49-75(2). The notification may (in appropriate cases) be in the form of an application under subsection 49-70(1) or 49-75(1). The notification, or application, must be given to the Commissioner within 21 days after the circumstances occurred. 49-85 Date of effect of approvals and revocations (1) The Commissioner must decide the date of effect of any approval, or any revocation of an approval, under this Division. (2) The date of effect may be the day of the decision, or a day before or after that day. However, it must be a day on which, for all the *members of the *GST religious group in question, a tax period begins. Note: Deciding under this section the date of effect of any approval, or any revocation of an approval, under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 49-90 Notification by the Commissioner The Commissioner must give notice of any decision that he or she makes under this Division: (a) if the decision relates to the approval of 2 or more entities as a *GST religious group-to the entity nominated in the application for approval to be the *principal member of the group; or (b) otherwise-to the principal member of the *GST religious group to which the decision relates. Division 50-GST treatment of religious practitioners Guide to Division 50 50-1 What this Division is about Activities of a religious practitioner done in pursuit of his or her vocation as a religious practitioner and as a member of a religious institution will be treated as activities done by the religious institution, unless the religious practitioner is acting as an employee or agent. Table of sections 50-5 GST treatment of religious practitioners 50-5 GST treatment of religious practitioners If a *religious practitioner: (a) does an activity, or a series of activities: (i) in pursuit of his or her vocation as a religious practitioner; and (ii) as a member of a religious institution; and (b) does not do the activity, or series of activities, as an employee or agent of the religious institution or another entity; the *GST law applies as if the activity, or series of activities, had been done by the religious institution and not by the religious practitioner. Note: This will mean that such an activity will be an enterprise of the religious institution under subsection 9-20(1) and not an enterprise of the religious practitioner. Division 51-GST joint ventures Table of Subdivisions 51-A Approval of GST joint ventures 51-B Consequences of approval of GST joint ventures 51-C Administrative matters 51-D Ceasing to be a participant in, or an operator of, a GST joint venture 51-1 What this Division is about Entities engaged in a joint venture can have it approved as a GST joint venture. The joint venture operator then deals with the GST liabilities and entitlements arising from the joint venture operator's dealings on behalf of the participants in the joint venture. Note: Provisions for participants in GST joint ventures apply for the wine equalisation tax (see Subdivision 21-C of the A New Tax System (Wine Equalisation Tax) Act 1999) and the luxury car tax (see Subdivision 16-B of the A New Tax System (Luxury Car Tax) Act 1999). Subdivision 51-A-Approval of GST joint ventures 51-5 Approval of GST joint ventures (1) The Commissioner must approve 2 or more entities as the *participants in a *GST joint venture if: (a) the joint venture is a joint venture for the exploration or exploitation of *mineral deposits, or for a purpose specified in the regulations; and (b) the joint venture is not a *partnership; and (c) the entities jointly apply, in the *approved form, for approval of the joint venture as a GST joint venture; and (d) each of those entities *satisfies the participation requirements for that GST joint venture; and (e) the application nominates one of those entities, or another entity, to be the *joint venture operator of the joint venture; and (f) if the nominated joint venture operator is not a party to the joint venture agreement-the nominated joint venture operator satisfies the requirements of paragraphs 51-10(c) and (f). A joint venture that is so approved is a GST joint venture. (2) The application for approval need not include all the entities that are engaged in, or intend to engage in, the joint venture. Note: Refusing an application for approval under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 51-10 Participation requirements of a GST joint venture An entity satisfies the participation requirements for a *GST joint venture, or a proposed GST joint venture, if the entity: (a) participates in, or intends to participate in, the joint venture; and (b) is a party to a joint venture agreement with all the other entities participating in, or intending to participate in, the joint venture; and (c) is *registered; and (f) accounts on the same basis as all those other participants. Subdivision 51-B-Consequences of approval of GST joint ventures 51-30 Who is liable for GST (1) GST payable on any *taxable supply or *taxable importation that the *joint venture operator of a *GST joint venture makes, on behalf of another entity that is a *participant in the joint venture, in the course of activities for which the joint venture was entered into: (a) is payable by the joint venture operator; and (b) is not payable by the participant. Note: However, each participant is jointly and severally liable to pay the GST that is payable by the joint venture operator (see section 444-80 in Schedule 1 to the Taxation Administration Act 1953). (2) However, a supply that the *joint venture operator of a *GST joint venture makes is treated as if it were not a *taxable supply if: (a) it is made to another entity that is a *participant in the joint venture; and (b) the participant acquired the thing supplied for consumption, use or supply in the course of activities for which the joint venture was entered into. (3) This section has effect despite sections 9-40 and 13-15 (which are about liability for GST). 51-35 Who is entitled to input tax credits (1) If the *joint venture operator of a *GST joint venture makes a *creditable acquisition or *creditable importation, on behalf of another entity that is a *participant in the joint venture, in the course of activities for which the joint venture was entered into: (a) the *joint venture operator is entitled to the input tax credit for the acquisition or importation; and (b) the participant is not entitled to the input tax credit on the acquisition or importation. (2) This section has effect despite sections 11-20 and 15-15 (which are about who is entitled to input tax credits). 51-40 Adjustments (1) Any *adjustment relating to any supply, acquisition or importation that the *joint venture operator of a *GST joint venture makes, on behalf of another entity that is a *participant in the joint venture, in the course of activities for which the joint venture was entered into is to be treated as if: (a) the participant did not have the adjustment; and (b) the entity that is the joint venture operator at the time the adjustment arises had the adjustment. (2) This section has effect despite section 17-10 (which is about the effect of adjustments on net amounts). 51-45 Additional net amounts relating to GST joint ventures (1) Division 17 applies to the *joint venture operator of a *GST joint venture as if the joint venture operator had an additional *net amount, relating to the joint venture, for each tax period. (2) The additional *net amount relating to the joint venture is worked out as if the joint venture operator: (a) is only liable for the GST on *taxable supplies that the joint venture operator makes, on behalf of another entity that is a *participant in the joint venture, in the course of activities for which the joint venture was entered into; and (b) is only entitled to the input tax credits for *creditable acquisitions or *creditable importations that the joint venture operator makes on behalf of another entity that is a participant in the joint venture, in the course of activities for which the joint venture was entered into; and (c) only has adjustments relating to supplies, acquisitions or importations that the joint venture operator makes, on behalf of another entity that is a participant in the joint venture, in the course of activities for which the joint venture was entered into. (2A) However, while an election made by the *joint venture operator under section 51-52 has effect: (a) Division 17 applies to the joint venture operator as if the joint venture operator had an additional *net amount, relating to all the *GST joint ventures for which the joint venture operator is the joint venture operator, for each tax period; and (b) that additional net amount is worked out by aggregating what would be the additional *net amounts relating to each GST joint venture under subsection (2) if that subsection applied. (3) This section has effect despite sections 17-5 and 17-10 (which are about net amounts and adjustments). 51-50 GST returns relating to GST joint ventures (1) The *joint venture operator of a *GST joint venture must, in relation to each *GST joint venture of the joint venture operator, give to the Commissioner a *GST return for each tax period applying to the joint venture operator. (2) However, while an election made by the *joint venture operator under section 51-52 has effect, the joint venture operator must, in relation to all the *GST joint ventures for which the joint venture operator is the joint venture operator, give to the Commissioner a single *GST return for each tax period applying to the joint venture operator. (3) This section has effect despite section 31-5 (which is about who must give GST returns). 51-52 Consolidation of GST returns relating to GST joint ventures Electing to consolidate GST returns (1) The *joint venture operator of 2 or more *GST joint ventures may, by notifying the Commissioner in the *approved form, elect to give to the Commissioner consolidated *GST returns relating to all the GST joint ventures of the joint venture operator. (2) The election takes effect on the day specified in the notice. However, the day specified must be the first day of a tax period applying to the *joint venture operator that has not already ceased when the notice is given. Withdrawal of elections (3) The *joint venture operator may, by notifying the Commissioner in the *approved form, withdraw the election. (4) The withdrawal takes effect on the day specified in the notice. However, the day specified: (a) must be the first day of a tax period applying to the *joint venture operator that has not already ceased when the notice is given; and (b) must not be a day occurring earlier than 12 months after the election took effect. Disallowance of elections (5) The Commissioner may disallow the election if the Commissioner is satisfied that the *joint venture operator has a history of failing to comply with the joint venture operator's obligations (either as a joint venture operator or in any other capacity) under a *taxation law. Note: Disallowing an election is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (6) The disallowance is taken to have had effect from the start of the tax period in which the disallowance occurs. 51-55 Payments of GST relating to GST joint ventures (1) If the *net amount relating to one or more *GST joint ventures for a tax period is greater than zero: (a) the *joint venture operator of that GST joint venture or those GST joint ventures must pay that net amount to the Commissioner; and (b) Division 33 applies to payment of that amount as if it were a payment the joint venture operator was obliged to make under section 33-3 or 33-5 (as the case requires). (2) This section has effect despite Division 33 (which is about payments of GST). 51-60 Refunds relating to GST joint ventures If the *net amount relating to one or more *GST joint ventures for a tax period is less than zero, the Commissioner must, on behalf of the Commonwealth, pay that net amount (expressed as a positive amount) to the *joint venture operator of that GST joint venture or those GST joint ventures. Note 1: See Division 3A of Part IIB of, and section 105-65 in Schedule 1 to, the Taxation Administration Act 1953 for the rules about how the Commissioner must pay the operator. Division 3 of Part IIB allows the Commissioner to apply the amount owing as a credit against tax debts that the operator owes to the Commonwealth. Note 2: Interest is payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983 if the Commissioner is late in refunding the amount. Subdivision 51-C-Administrative matters 51-70 Changing the participants etc. of GST joint ventures Changes made on application (1) The Commissioner must, if the *joint venture operator of a *GST joint venture applies to the Commissioner in the *approved form, do one or more of these (as requested in the application): (a) approve, as an additional *participant of the GST joint venture, another entity that *satisfies the participation requirements of the GST joint venture; (b) revoke the approval of one of the participants of the GST joint venture as a participant in the joint venture; (c) approve another entity that satisfies the requirements of paragraphs 51-10(c) and (f) as the joint venture operator of the joint venture. Note: Refusing an application for approval or revocation under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). Changes made without application (2) The Commissioner must revoke the approval of: (a) one of the *participants of a *GST joint venture if satisfied that the participant does not *satisfy the participation requirements of the GST joint venture; or (b) the *joint venture operator of a GST joint venture if satisfied that the operator does not satisfy the requirements of paragraphs 51-10(c) and (f). Note: Revoking under this subsection an approval under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 51-75 Revoking the approval of GST joint ventures Revoking on application (1) The Commissioner must, if the *joint venture operator of a *GST joint venture applies to the Commissioner in the *approved form, revoke the approval of the joint venture as a GST joint venture. Note: Refusing an application for revocation under this subsection is a reviewable GST decision (see Subdivision 110- F in Schedule 1 to the Taxation Administration Act 1953). Revoking without application (2) The Commissioner must revoke the approval of the *GST joint venture if satisfied that none of its *participants, or only one of its participants, *satisfies the participation requirements of the GST joint venture. Note: Revoking under this subsection the approval of a GST joint venture is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 51-80 Notification by joint venture operators The *joint venture operator of a *GST joint venture must notify the Commissioner of any circumstances under which the Commissioner must: (a) revoke the approval of one of the *participants of the joint venture under subsection 51-70(2); or (b) revoke the approval of the joint venture under subsection 51- 75(2). The notification may (in appropriate cases) be in the form of an application under subsection 51-70(1). The notification, or application, must be given to the Commissioner within 21 days after the circumstances occurred. 51-85 Date of effect of approvals and revocations (1) The Commissioner must decide the date of effect of any approval, or any revocation of an approval, under this Division. (2) The date of effect may be the day of the decision, or a day before or after that day. However, it must be the beginning of a tax period applying to the participants of the *GST joint venture in question. Note: Deciding under this section the date of effect of any approval, or any revocation of an approval, under this Division is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 51-90 Notification by the Commissioner The Commissioner must give notice of any decision that he or she makes under this Division: (a) if the decision relates to the approval of 2 or more entities as the *participants of a *GST joint venture-to the entity nominated in the application for approval to be the *joint venture operator of the joint venture; or (b) otherwise-to the joint venture operator of the *GST joint venture to which the decision relates. Subdivision 51-D-Ceasing to be a participant in, or an operator of, a GST joint venture 51-110 Adjustments after you cease to be a participant in a GST joint venture (1) If you *cease to be a participant in a GST joint venture, any *adjustment that arises afterwards in relation to a supply, acquisition or importation that the *joint venture operator made on your behalf in the course of activities for which the joint venture was entered into (other than a supply covered by subsection 51-30(2)): (a) is an adjustment that you have; and (b) is not an adjustment of the entity that is or was the joint venture operator. (2) This section has effect despite section 51-40 (which is about who has adjustments for a GST joint venture). 51-115 Changes in extent of creditable purpose after you cease to be a member of a GST joint venture (1) If: (a) while you were a *participant in a *GST joint venture, you acquired or imported a thing by the joint venture operator acquiring or importing it on your behalf; and (b) you *cease to be a participant in the GST joint venture; then, when applying section 129-40 for the first time after that cessation, the *intended or former application of the thing is the extent of *creditable purpose last used to work out: (c) under section 51-35, the amount of the input tax credit to which the *joint venture operator was entitled for the acquisition or importation; or (d) under section 51-40, the amount of any *adjustment the joint venture operator had under Division 129 in relation to the acquisition or importation. (2) If: (a) while you were a *participant in a *GST joint venture, you acquired or imported a thing by the joint venture operator acquiring or importing it on your behalf; and (b) you have *ceased to be a participant in the GST joint venture; and (c) you have an *adjustment under Division 129 in relation to the acquisition or importation; then, for the purposes of working out the full input tax credit in section 129-70 or 129-75, you are taken not to have been a participant of a GST joint venture when you acquired or imported the thing. Division 54-GST branches Table of Subdivisions 54-A Registration of GST branches 54-B Consequences of registration of GST branches 54-C Cancellation of registration of GST branches 54-1 What this Division is about A branch of a registered entity can be separately registered as a GST branch. Separate GST returns are given, and separate payments and refunds of GST are made, in respect of the branch. Subdivision 54-A-Registration of GST branches 54-5 Registration of GST branches (1) The Commissioner must *register a branch of a *registered entity if: (a) the registered entity applies, in the *approved form, for registration of the branch; and (b) the Commissioner is satisfied that the branch maintains an independent system of accounting, and can be separately identified by reference to: (i) the nature of the activities carried on through the branch; or (ii) the location of the branch; and (c) the Commissioner is satisfied that the registered entity is *carrying on an *enterprise through the branch, or intends to carry on an enterprise through the branch, from a particular date specified in the application. A branch that is so registered is a GST branch. (2) A branch of a *registered entity can be registered as a *GST branch without all or any of the other branches of the entity being so registered. (3) However, a branch of a *registered entity cannot be registered as a *GST branch if the registered entity is a *member of a *GST group. Note: Refusing an application for registration under this section is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 54-10 The date of effect of registration of a GST branch The Commissioner must decide the date from which *registration as a *GST branch takes effect. However, the date of effect must not be a day before: (a) the day specified in the application for that purpose; or (b) if the branch is being registered only because it is intended that an *enterprise be *carried on through the branch-the date of effect must not be a day before the day specified, in the application, as the day from which it is intended to carry on the enterprise through the branch. Note: Deciding the date of effect of registration as a GST branch is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 54-15 GST branch registration number If the Commissioner *registers a *GST branch, the Commissioner must notify the registered entity of the branch's *GST branch registration number. Subdivision 54-B-Consequences of registration of GST branches 54-40 Additional net amounts relating to GST branches (1) If an entity (the parent entity) has a *GST branch, Division 17 applies to the parent entity as if it had an additional *net amount, relating to the branch, for each tax period. (2) The additional *net amount relating to the branch is worked out as if the branch were a separate entity and as if: (a) all the supplies, acquisitions and importations made through the branch were made by that separate entity; and (b) all the *adjustments that the parent entity has arising from such supplies, acquisitions and importations were adjustments that the branch has; and (c) all transfers of anything by the branch to the parent entity (including any other branch of the parent entity), that would have been supplies made by the branch if it were an entity, were supplies made by the separate entity; and (d) all transfers of anything by the parent entity (including any other branch of the parent entity) to the branch, that would have been acquisitions made by the branch if it were an entity, were acquisitions made by the separate entity; and (e) all adjustments that the branch would have had, if it were an entity, relating to the supplies and acquisitions it would have made as mentioned in paragraphs (c) and (d), were adjustments that the branch had. (3) This section has effect despite sections 17-5 and 17-10 (which are about net amounts and adjustments). 54-45 Net amounts of parent entities (1) If an entity (the parent entity) has a *GST branch, the parent entity's *net amount is worked out as if: (a) all the supplies, acquisitions and importations made through any GST branch of the parent entity were not supplies for which the parent entity is liable for GST, or acquisitions or importations for which the parent entity is entitled to input tax credits; and (b) the parent entity does not have any *adjustments arising from such supplies, acquisitions and importations; and (c) all transfers of anything by the parent entity to any GST branch of the parent entity, that would have been supplies made to the branch if it were an entity, were supplies made by the parent entity; and (d) all transfers of anything by any GST branch of the parent entity to the parent entity, that would have been acquisitions made from the branch if it were an entity, were acquisitions made by the parent entity; and (e) all adjustments that the parent entity would have had, if the GST branches of the parent entity were entities, relating to the supplies and acquisitions the parent entity would have made as mentioned in paragraphs (c) and (d), were adjustments that the parent entity had. (2) However, the parent entity has no *net amount under this section if all the *enterprises that it *carries on are carried on through its *GST branches. (3) This section has effect despite sections 17-5 and 17-10 (which are about net amounts and adjustments). 54-50 Tax invoices and adjustment notes (1) The *GST branch registration number of a *GST branch must be set out in: (a) any *tax invoice relating to a *taxable supply made through that GST branch; and (b) any *adjustment note for a *decreasing adjustment that arose from the occurrence of an *adjustment event relating to a *taxable supply made through that GST branch. (2) This section has effect despite sections 29-70 and 29-75 (which are about tax invoices and adjustment notes). 54-55 GST returns relating to GST branches (1) An entity must, in relation to each *GST branch of the entity, give to the Commissioner a *GST return for each tax period applying to the entity. (3) The entity must still give a *GST return under section 31-5, unless all the *enterprises that it *carries on are carried on through its *GST branches. (4) This section has effect despite section 31-5 (which is about who must give GST returns). 54-60 Payments of GST relating to GST branches (1) If an entity has a *GST branch and the *net amount relating to the *GST branch for a tax period is greater than zero: (a) the entity must pay that net amount to the Commissioner; and (b) Division 33 applies to payment of that amount as if it were a payment the entity was obliged to make under section 33-3 or 33- 5 (as the case requires). (2) This section has effect despite Division 33 (which is about payments of GST). 54-65 Refunds relating to GST branches If an entity has a *GST branch and the *net amount relating to the *GST branch for a tax period is less than zero, the Commissioner must, on behalf of the Commonwealth, pay that net amount (expressed as a positive amount) to the entity. Note 1: See Division 3A of Part IIB of, and section 105-65 in Schedule 1 to, the Taxation Administration Act 1953 for the rules about how the Commissioner must pay the entity. Division 3 of Part IIB allows the Commissioner to apply the amount owing as a credit against tax debts that the entity owes to the Commonwealth. Note 2: Interest is payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983 if the Commissioner is late in refunding the amount. Subdivision 54-C-Cancellation of registration of GST branches 54-70 When an entity must apply for cancellation of registration of a GST branch (1) If an entity has a *GST branch and the entity is not *carrying on any *enterprise through the branch, the entity must apply to the Commissioner in the *approved form for cancellation of the *registration of the branch. (2) The entity must lodge its application within 21 days after the day on which it ceased to *carry on any *enterprise through the branch. 54-75 When the Commissioner must cancel registration of a GST branch (1) The Commissioner must cancel the *registration of a *GST branch of an entity if: (a) the entity has applied for cancellation of registration in the *approved form; and (b) at the time it applied, the branch had been registered for at least 12 months. Note: Refusing to cancel the registration of a GST branch under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must cancel the *registration of a *GST branch of the entity (even if the entity has not applied for cancellation of the registration) if: (a) the Commissioner is satisfied that the entity is not *carrying on an *enterprise through the branch; and (b) the Commissioner believes on reasonable grounds that the entity is unlikely to carry on an enterprise through the branch for at least 12 months. Note: Cancelling the registration of a GST branch under this subsection is a reviewable GST decision (see Subdivision 110- F in Schedule 1 to the Taxation Administration Act 1953). (3) The Commissioner must notify the entity of any decision he or she makes in relation to it under this section. If the Commissioner decides to cancel the *registration, the notice must specify the date of effect of the cancellation. 54-80 The date of effect of cancellation of registration of a GST branch The Commissioner must decide the date on which the cancellation of the *registration of a *GST branch of an entity under subsection 54-75(1) or (2) takes effect. That date may be any day occurring before, on or after the day on which the Commissioner makes the decision. Note: Deciding the date of effect of the cancellation of the registration of a GST branch is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). 54-85 Application of Subdivision 25-B Subdivision 25-B does not apply to the cancellation of the *registration of a *GST branch. 54-90 Effect on GST branches of cancelling the entity's registration If an entity's *registration is cancelled, the registration of any *GST branches of the entity ceases to have effect from the day the cancellation takes effect. Division 57-Resident agents acting for non-residents 57-1 What this Division is about This Division effectively makes resident agents acting for non- residents responsible for the GST consequences of what the non- residents do through their resident agents. 57-5 Who is liable for GST (1) GST payable on a *taxable supply or *taxable importation made by a *non-resident through a *resident agent: (a) is payable by the agent; and (b) is not payable by the non-resident. (2) This section has effect despite sections 9-40 and 13-15 (which are about liability for GST). 57-10 Who is entitled to input tax credits (1) If a *non-resident makes a *creditable acquisition or *creditable importation through a *resident agent: (a) the agent is entitled to the input tax credit on the acquisition or importation; and (b) the non-resident is not entitled to the input tax credit on the acquisition or importation. (2) This section has effect despite sections 11-20 and 15-15 (which are about who is entitled to input tax credits). 57-15 Adjustments (1) Any *adjustment that a *non-resident has relating to a supply, acquisition or importation made through a *resident agent is to be treated as if: (a) the non-resident did not have the adjustment; and (b) the agent had the adjustment. (2) This section has effect despite section 17-10 (which is about the effect of adjustments on net amounts). 57-20 Resident agents are required to be registered (1) A *resident agent who is acting as agent for a *non-resident is required to be registered if the non-resident is *registered or *required to be registered. (2) The section has effect despite section 23-5 (which is about who is required to be registered). 57-25 Cancellation of registration of a resident agent (1) The Commissioner must cancel the *registration of a *resident agent if the Commissioner is satisfied that the resident agent is not *required to be registered. Note: Cancelling the registration of a resident agent under this subsection is a reviewable GST decision (see Subdivision 110- F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must notify the *resident agent of the cancellation. (3) Sections 25-50 and 25-55 do not apply to the cancellation of the *registration of a *resident agent. 57-30 Notice of cessation of agency A *resident agent who ceases to act as agent for a *non- resident must notify the Commissioner of that cessation, in the *approved form, within 14 days after so ceasing to act. 57-35 Tax periods of resident agents (1) If you are a *resident agent who is acting as agent for a *non- resident, the Commissioner must determine that the tax periods that apply to you are each individual month if the Commissioner is satisfied that the non-resident's *GST turnover meets the *tax period turnover threshold. Note: Determining under this section the tax periods applying to you is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The determination takes effect on the day specified in the determination. However, the day specified must be 1 January, 1 April, 1 July or 1 October. Note: Deciding the date of effect of the determination is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (3) This section has effect in addition to section 27-15 (which is about determination of one month tax periods). 57-40 GST returns for non-residents (1) A *non-resident is not required to give a *GST return for a tax period if: (a) the non-resident's *net amount for the tax period is zero; or (b) the only *taxable supplies or *taxable importations that the non-resident made that are attributable to the tax period are taxable supplies or taxable importations made through a *resident agent. (2) This section has effect despite section 31-5 (which is about who must give GST returns). 57-45 Resident agents giving GST returns If you are a *resident agent acting for a *non-resident, subsection 31-15(2) does not apply to you in relation to a tax period if, during the tax period: (a) the non-resident made *taxable supplies, or supplies that would have been taxable supplies had they not been *GST-free or *input taxed, through you as agent; or (b) the non-resident made *creditable acquisitions through you as agent. 57-50 Non-residents that belong to GST groups This Division does not apply in relation to a *non-resident that is a *member of a *GST group. Division 60-Pre-establishment costs 60-1 What this Division is about This Division enables input tax credits to arise in some circumstances in which acquisitions and importations are made before a company is in existence. 60-5 Input tax credit for acquisitions and importations before establishment (1) If you make a *creditable acquisition that is a*pre- establishment acquisition, or a *creditable importation that is a *pre-establishment importation, relating to a *company before it is in existence: (a) you are not entitled to the input tax credit on the acquisition or importation; and (b) once the company is in existence, it is entitled to the input tax credit on the acquisition or importation. (2) This section has effect despite sections 11-20 and 15-15 (which are about who is entitled to input tax credits). 60-10 Registration etc. not needed for input tax credits (1) If you make a *pre-establishment acquisition, the fact that you are not *registered or *required to be registered does not stop the acquisition being a *creditable acquisition. (2) If you make a *pre-establishment importation, the fact that you are not *registered or *required to be registered does not stop the acquisition being a *creditable importation. (3) This section has effect despite sections 11-5 and 15-5 (which are about what are creditable acquisitions and creditable importations). 60-15 Pre-establishment acquisitions and importations (1) An acquisition that you make is a pre-establishment acquisition, and an importation that you make is a pre- establishment importation, if: (a) you do not *apply the thing acquired or imported for any purpose other than for a *creditable purpose relating to a *company not yet in existence; and (b) the company comes into existence, and becomes *registered, within 6 months after the acquisition or importation; and (c) you become a member, officer or employee of the company; and (d) in the case of an acquisition-you have been fully reimbursed by the company for the *consideration you provided for the acquisition; and (e) in the case of an importation-you have been fully reimbursed by the company: (i) for the GST paid on the importation; and (ii) for the cost of acquiring or producing the thing imported. (2) However, the acquisition or importation is not a pre- establishment acquisition or a pre-establishment importation if: (a) you are entitled to an input tax credit for the acquisition or importation; or (b) the company acquires the thing acquired or imported, and that acquisition by the company is a *creditable acquisition. 60-20 Creditable purpose (1) If, before a *company is in existence, you make an acquisition or importation: (a) for the purpose of bringing the company into existence; or (b) for the purpose of the company *carrying on an *enterprise after it is in existence; you acquire or import the thing for a creditable purpose only to the extent that you acquire or import it for either or both of those purposes. (2) However, you do not acquire or import the thing for a creditable purpose to the extent that: (a) the acquisition or importation relates (directly or indirectly) to the company making supplies that would be *input taxed; or (b) the acquisition or importation is of a private or domestic nature. (3) An acquisition or importation is not treated, for the purposes of paragraph (2)(a), as relating to making supplies that would be *input taxed to the extent that the supply is made through an *enterprise, or a part of an enterprise, that the company will *carry on outside Australia. (4) This section has effect despite sections 11-15 and 15-10 (which are about creditable purpose). 60-25 Attributing the input tax credit for pre-establishment acquisitions (1) The input tax credit to which a *company is entitled under this Division for an acquisition that you made is attributable to the tax period (applying to the company) in which you were fully reimbursed by the company for the *consideration you paid for the acquisition. (2) However, if the company does not hold a copy of a *tax invoice that you (or your agent) hold for the acquisition when the company gives to the Commissioner a *GST return for the tax period to which the input tax credit for the acquisition would otherwise be attributable, then: (a) the input tax credit (including any part of the input tax credit) is not attributable to that tax period; and (b) the input tax credit (or the part of the input tax credit) is attributable to the first tax period for which the company gives to the Commissioner a GST return at a time when it holds a copy of that tax invoice. However, this subsection does not apply in circumstances of a kind determined in writing by the Commissioner, under subsection 29- 10(3), to be circumstances in which the requirement for a tax invoice does not apply. For the giving of GST returns to the Commissioner, see Division 31. (3) This section has effect despite section 29-10 (which is about attributing input tax credits for acquisitions). 60-30 Attributing the input tax credit for pre-establishment importations (1) The input tax credit to which a *company is entitled under this Division for an importation that you made is attributable to the tax period (applying to the company) in which you were fully reimbursed by the company: (a) for the GST paid on the importation; and (b) for the cost of acquiring or producing the thing imported. (2) This section has effect despite section 29-15 (which is about attributing input tax credits for importations). 60-35 Application of Division 129 If a *company is entitled under this Division to an input tax credit for an acquisition or importation, the acquisition or importation is treated, for the purposes of Division 129 (which is about changes in the extent of creditable purpose), as if the company had made it. Division 63-Non-profit sub-entities 63-1 What this Division is about Some kinds of non-profit entities may choose to have some (or all) of their separately identifiable branches treated as separate entities for GST purposes. Note: The parent entities then cease to be responsible, for GST purposes, for these branches. (By way of contrast, parent entities would remain responsible for their branches if they registered them under Division 54.) 63-5 Entities that may choose to apply this Division (1) An entity may choose to apply this Division. (2) However, the entity must be *registered and must be: (a) a charitable institution, a trustee of a charitable fund or a *government school; or (aa) a *gift-deductible entity that is a non-profit body; or (b) a non-profit body that is exempt from income tax under any of these provisions of the *ITAA 1997: (i) section 50-5 (charity, education, science and religion); (ii) section 50-10 (community service); (iii) section 50-15 (employees and employers); (iv) section 50-40 (primary and secondary resources, and tourism); (v) item 9.1 or 9.2 of section 50-45 (sports, culture and recreation). (3) Paragraph (2)(a) does not apply in relation to a charitable institution or a trustee of a charitable fund unless the institution or trustee is an *endorsed charitable institution or an *endorsed trustee of a charitable fund. Example: Paragraph (2)(a) does not apply in relation to an entity that is both a charitable institution and a gift-deductible entity unless the entity is an endorsed charitable institution. 63-10 Period for which a choice has effect (1) The choice has effect from the time the entity makes the choice. (2) The choice ceases to have effect if: (a) the entity revokes the choice; or (b) the entity ceases to meet the requirements of subsection 63- 5(2). (3) However, the entity: (a) cannot revoke the choice within 12 months after the day on which the entity made the choice; and (b) cannot make a further choice within 12 months after the day on which the entity revoked a previous choice. 63-15 Consequences of choosing to apply this Division (1) While the choice has effect, any branch of the entity is treated, for the purposes of the *GST law (other than sections 63-5 and 63-10 and this section), as an entity if that branch: (a) maintains an independent system of accounting; and (b) can be separately identified by reference to: (i) the nature of the activities carried on through the branch; or (ii) the location of the branch; and (c) is referred to in the entity's records to the effect that it is to be treated as a separate entity for the purposes of the GST law. (2) The branch's treatment as an entity ceases if: (a) the choice ceases to have effect; or (b) the branch ceases to meet the requirements of paragraphs (1)(a), (b) and (c). However, if the branch is *registered, its treatment as an entity continues until its registration is cancelled. (3) At all times during its treatment as an entity, the branch is a non-profit sub-entity. 63-20 Non-profit sub-entities may register (1) A *non-profit sub-entity may apply to be *registered under section 23-10 even if it is not *carrying on an *enterprise and is not intending to carry on an enterprise. (2) The Commissioner must *register the *non-profit sub-entity whether or not the Commissioner is satisfied that it is *carrying on an *enterprise or intending to carry on an enterprise. (3) This section has effect despite section 23-10 (which is about who may be registered) and section 25-5 (which is about when the Commissioner must register an entity). 63-25 Registration turnover threshold for non-profit sub-entities Regulations made for the purposes of paragraph 23-15(2)(b) may: (a) provide that they apply only to *non-profit sub-entities, or only to other non-profit entities; or (b) specify one amount for *non-profit sub-entities and a different amount for other non-profit entities. 63-30 When non-profit sub-entities must apply for cancellation of registration (1) If a *non-profit sub-entity is *registered and it does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c), it must apply to the Commissioner in the *approved form for cancellation of its *registration. It must lodge the application within 21 days after the day on which it ceased to meet those requirements. (2) Section 25-50 (which is about cancelling registration) does not apply to *non-profit sub-entities. 63-35 When the Commissioner must cancel registration of non-profit sub- entities (1) The Commissioner must cancel *registration of a *non-profit sub- entity (even if it has not applied for cancellation of the registration) if the Commissioner is satisfied that the sub-entity does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c). Note: Cancelling registration under this subsection is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (2) The Commissioner must notify the sub-entity if the Commissioner decides to cancel its registration. The notice must specify the date of effect of the cancellation. (3) Subsection 25-55(2) (which is about cancelling registration) does not apply to *non-profit sub-entities. 63-40 Effect on adjustments of becoming a non-profit sub-entity (1) If a branch of an entity becomes a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the entity through the branch before it became a non-profit sub-entity: (a) is taken to be an adjustment that the non-profit sub-entity has, as if the non-profit sub-entity had made the supply, acquisition or importation; and (b) is not taken to be an adjustment that the entity has. (2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch became a *non-profit sub-entity, that Division applies as if: (a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the non- profit sub-entity acquired or imported it for a creditable purpose; and (b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the non-profit sub-entity applied it for a creditable purpose. 63-45 Effect on adjustments of ceasing to be a non-profit sub-entity (1) If a branch of an entity ceases to be a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the branch while it was a non- profit sub-entity, is taken to be an adjustment that the entity has, as if the entity had made the supply, acquisition or importation. (2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch ceased to be a *non-profit sub-entity, that Division applies as if: (a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the entity acquired or imported it for a creditable purpose; and (b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the entity applied it for a creditable purpose. 63-50 Membership requirements of GST groups A *non-profit sub-entity satisfies the membership requirements for a *GST group, or a proposed GST group, if: (a) it is *registered; and (b) it has the same tax periods applying to it as the tax periods applying to all the other members of the GST group or proposed GST group; and (c) it accounts on the same basis as all those other members; and (d) it is not a *member of any other GST group; and (e) each of the other members of the GST group or proposed GST group is either: (i) the entity of which the non-profit sub-entity is a branch; or (ii) another branch of that entity that is a non-profit sub-entity. 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 66-Second-hand goods Table of Subdivisions 66-A Input tax credits for acquiring second-hand goods 66-B Acquisitions of second-hand goods that are divided for re-supply 66-1 What this Division is about This Division allows you to claim input tax credits for your acquisitions of second-hand goods, even though GST was not payable on the supply of the goods to you. However, some limitations apply, and a form of global accounting is used for some acquisitions of second-hand goods that are divided for re-supply. Subdivision 66-A-Input tax credits for acquiring second-hand goods 66-5 Creditable acquisitions of second-hand goods (1) If you acquire *second-hand goods for the purposes of sale or exchange (but not for manufacture) in the ordinary course of *business, the fact that the supply of the goods to you is not a *taxable supply does not stop the acquisition being a *creditable acquisition. (2) However, this section does not apply, and is taken never to have applied, to the acquisition if: (a) the supply of the goods to you was a *taxable supply, or was *GST-free; or (b) you *imported the goods; or (c) the supply of the goods to you was a supply by way of hire; or (d) Subdivision 66-B applies to the acquisition; or (e) you make a supply of the goods that is not a taxable supply. (3) This section has effect despite section 11-5 (which is about what is a creditable acquisition). 66-10 Amounts of input tax credits for creditable acquisitions of second- hand goods (1) The amount of the input tax credit for a *creditable acquisition of *second-hand goods for which the *consideration is more than $300 is: (a) an amount equal to 1/11 of the *consideration that you provide, or are liable to provide, for the acquisition; or (b) if that amount is more than the amount of the GST payable on a *taxable supply of the goods that you make-the amount of GST on that taxable supply. (1A) The amount of the input tax credit for a *creditable acquisition of *second-hand goods for which the *consideration is $300 or less is an amount equal to 1/11 of the *consideration that you provide, or are liable to provide, for the acquisition. (2) However, this section does not apply if the supply of the goods to you is a *taxable supply. (3) This section has effect despite section 11-25 (which is about the amount of input tax credits for creditable acquisitions). 66-15 Attributing input tax credits for creditable acquisitions of second- hand goods (1) If: (a) you are entitled, under this Division, to the input tax credit for a *creditable acquisition of *second-hand goods; and (b) either the *consideration for the acquisition was more than $300 or you choose to have this section apply to the acquisition; the input tax credit for the acquisition is attributable to: (c) the tax period in which any *consideration is received for a subsequent *taxable supply of the goods; or (d) if, before any of the consideration is received, you have issued an *invoice relating to the supply-the tax period in which the invoice is issued. (2) However, if you *account on a cash basis, then: (a) if, in a tax period, all of the *consideration is received for the subsequent *taxable supply-the input tax credit for the acquisition is attributable to that tax period; or (b) if, in a tax period, part of the consideration is received-the input tax credit for the acquisition is attributable to that tax period, but only to the extent that the consideration is received in that tax period; or (c) if, in a tax period, none of the consideration is received-none of the input tax credit for the acquisition is attributable to that tax period. (4) This section has effect despite section 29-10 (which is about attributing the input tax credits for creditable acquisitions). 66-17 Records of creditable acquisitions of second-hand goods (1) If you make a *creditable acquisition of second-hand goods and the supply of the goods to you was not a *taxable supply: (a) subsection 29-10(3) applies to the acquisition as if references to a *tax invoice were references to a record you prepared that complies with this section; and (b) subsection 29-20(3) applies to an adjustment event relating to the acquisition as if references to an *adjustment note were references to a record you prepared that complies with this section. (2) To comply with this section, the record must: (a) set out the name and address of the entity that supplied the goods to you; and (b) describe the goods (including their quantity); and (c) set out the date of, and the *consideration for, the acquisition. (2A) Subsection 29-10(3) does not apply to a *creditable acquisition of *second-hand goods if: (a) the supply to which the acquisition relates is not a *taxable supply; and (b) the amount that would have been the *value of the supply (if it had been a *taxable supply) does not exceed $50, or such higher amount as the regulations made for the purposes of subsection 29-80(1) specify. (2B) Subsection 29-20(3) does not apply to a *decreasing adjustment relating to a *creditable acquisition of *second-hand goods if: (a) the supply to which the acquisition relates is not a *taxable supply; and (b) the amount of the adjustment does not exceed $50, or such higher amount as the regulations made for the purposes of subsection 29-80(2) specify. (3) This section has effect despite section 29-10 (which is about attributing the input tax credits for creditable acquisitions) and section 29-20 (which is about attributing decreasing adjustments). Subdivision 66-B-Acquisitions of second-hand goods that are divided for re- supply 66-40 Acquisitions of second-hand goods that can be used to offset GST on future re-supplies (1) This Subdivision applies to an acquisition of *second-hand goods if: (a) you acquire the goods for the purposes of sale or exchange (but not for manufacture) in the ordinary course of *business; and (b) either the *consideration for the acquisition was more than $300 or you choose to have this section apply to the acquisition; and (c) the goods are of such a kind, or they are supplied to you in such a way, that it would be reasonable to expect you to divide them before supplying them in 2 or more separate supplies; and (d) you do not subsequently make a single supply of the entirety of the goods acquired. (2) However, this Subdivision does not apply, and is taken never to have applied, to the acquisition if: (a) the *consideration for the acquisition separately itemises the consideration for the different goods acquired, and your division of the goods before supplying them: (i) corresponds to that itemisation; or (ii) does not involve dividing the goods any further than the division indicated by that itemisation; or (b) the supply of the goods to you was a *taxable supply, or was *GST-free; or (c) you *imported the goods; or (d) the supply of the goods to you was a supply by way of hire; or (e) you make a supply of the goods, or of part of the goods, that is not a taxable supply (other than because of section 66-45). 66-45 Future re-supplies that are not taxable supplies (1) A supply you make is not a *taxable supply if: (a) it is a supply of goods that were part of an acquisition you made that was an acquisition of *second-hand goods to which this Subdivision applied; and (b) your *total Subdivision 66-B credit amount is more than your *total Subdivision 66-B GST amount; and (c) what would be the amount of GST payable on the supply, if the supply were a taxable supply, is less than or equal to the difference between: (i) your *total Subdivision 66-B credit amount; and (ii) your *total Subdivision 66-B GST amount. Note: This section will not apply unless the record keeping requirements of section 66-55 are met. (2) This section has effect despite section 9-5 (which is about what are taxable supplies). 66-50 Future re-supplies on which GST is reduced (1) The amount of GST on a *taxable supply you make is reduced if: (a) it is a supply of goods that were part of an acquisition you made that was an acquisition of *second-hand goods to which this Subdivision applied; and (b) your *total Subdivision 66-B credit amount is more than your *total Subdivision 66-B GST amount; and (c) what would be the amount of GST payable on the supply, if the amount were not reduced under this section, is more than the difference between: (i) your total Subdivision 66-B credit amount; and (ii) your total Subdivision 66-B GST amount. Note: This section will not apply unless the record keeping requirements of section 66-55 are met. (2) The amount by which the GST on the supply is reduced is an amount equal to the difference between: (a) your *total Subdivision 66-B credit amount; and (b) your *total Subdivision 66-B GST amount. (3) This section has effect despite section 9-70 (which is about the amount of GST on taxable supplies). Note: Section 9-90 (rounding of amounts of GST) can apply to amounts of GST worked out using this section. 66-55 Records of acquisitions of second-hand goods to which this Subdivision applied Sections 66-45 and 66-50 do not apply to a supply of goods you made unless you hold a record, relating to the acquisition of *second-hand goods of which the goods supplied were a part, that: (a) sets out the name and address of the entity that supplied the goods to you; and (b) describes the goods (including their quantity); and (c) sets out the date of, and the *consideration for, the acquisition. 66-60 Input tax credits for acquiring second-hand goods the supply of which is not fully taxable (1) If an entity acquires *second-hand goods, and, because of section 66-45 and for no other reason, the supply of the goods to the entity is not a *taxable supply: (a) the fact that the supply is not a taxable supply does not stop the acquisition being a *creditable acquisition; and (b) the amount of the input tax credit for the creditable acquisition is worked out as if the supply were a taxable supply. (2) If: (a) an entity makes a *creditable acquisition of *second-hand goods; and (b) the amount of GST on the supply of the goods to the entity was reduced because of section 66-50; the amount of the input tax credit for the creditable acquisition is worked out as if that amount of GST had not been so reduced. (3) This section has effect despite section 11-5 (which is about what is a creditable acquisition) and section 11-25 (which is about the amount of input tax credits for creditable acquisitions). 66-65 Total Subdivision 66-B credit amounts and Subdivision 66-B GST amounts (1) Your total Subdivision 66-B credit amount is the sum of the amounts of the input tax credits to which you would have been entitled, for all your acquisitions of *second-hand goods to which this Subdivision applied, if this Subdivision had not applied to them. (2) Your total Subdivision 66-B GST amount is the sum of: (a) all the amounts of GST that, but for the operation of section 66-45, would have been payable on supplies that you made; and (b) all the amounts by which GST payable on supplies that you made has been reduced under section 66-50. 66-70 Commissioner may determine rules for applying this Subdivision (1) The Commissioner may, in writing, determine: (a) that acquisitions of *second-hand goods of a specified kind are, or are not, acquisitions of second-hand goods to which this Subdivision applies; or (b) how *total Subdivision 66-B credit amounts or *total Subdivision 66-B GST amounts are to be worked out in specified circumstances. (2) Determinations under subsection (1) override the provisions of this Subdivision (except this section), but only to the extent of any inconsistency. Division 69-Non-deductible expenses Table of Subdivisions 69-A Non-deductible expenses generally 69-B Elections for GST purposes relating to meal entertainment and entertainment facilities 69-1 What this Division is about Some expenses that are not deductible under the ITAA 1997 do not give rise to creditable acquisitions or creditable importations. The amount of input tax credits on some creditable acquisitions or creditable importations of cars is reduced. Subdivision 69-A-Non-deductible expenses generally 69-5 Non-deductible expenses do not give rise to creditable acquisitions or creditable importations (1) An acquisition is not a *creditable acquisition to the extent that it is a *non-deductible expense. (2) An importation is not a *creditable importation to the extent that it is a *non-deductible expense. (3) An acquisition or importation is a non-deductible expense if it is not deductible under Division 8 of the *ITAA 1997 because of one of the following: (a) section 26-5 of the *ITAA 1997 (Penalties); (b) section 26-30 of the *ITAA 1997 (Relative's travel expenses); (c) section 26-40 of the *ITAA 1997 (Maintaining your family); (d) section 26-45 of the *ITAA 1997 (Recreational club expenses); (e) section 26-50 of the *ITAA 1997 (Expenses for a leisure facility); (f) Division 32 of the *ITAA 1997 (Entertainment expenses); (g) Division 34 of the *ITAA 1997 (Non-compulsory uniforms); (h) section 51AK of the *ITAA 1936 (Agreements for the provision of non-deductible non-cash business benefits). (3A) An acquisition or importation is also a non-deductible expense to the extent that it is not deductible under Division 8 of the *ITAA 1997 because of one of the following: (a) section 51AEA of the *ITAA 1936 (Meal entertainment-election to use the 50/50 split method); (b) section 51AEB of the ITAA 1936 (Meal entertainment-election to use the 12 week register method); (c) section 51AEC of the ITAA 1936 (Entertainment facility-election to use the 50/50 split method). (4) If the entity making the acquisition or importation is an *exempt entity, the acquisition or importation is a non-deductible expense if it would have been a non-deductible expense under subsection (3) or (3A) had the entity not been an exempt entity. (5) This section has effect despite sections 11-5 and 15-5 (which are about what is a creditable acquisition and what is a creditable importation). 69-10 Amounts of input tax credits for creditable acquisitions or creditable importations of certain cars (1) If: (a) you are entitled to an input tax credit for a *creditable acquisition or *creditable importation of a *car; and (b) you are not, for the purposes of the A New Tax System (Luxury Car Tax) Act 1999, entitled to quote an *ABN in relation to the supply to which the creditable acquisition relates, or in relation to the importation, as the case requires; and (c) the *GST inclusive market value of the car exceeds the *car limit for the *financial year in which you first used the car for any purpose; the amount of the input tax credit on the acquisition or importation is the amount of GST payable on the supply or importation of the car up to 1/11 of that limit. (2) However, if: (a) the supply of the car is *GST-free to any extent under Subdivision 38-P; or (b) the importation of the car is non-taxable to any extent under paragraph 13-10(b) because it would have been GST-free to any extent under Subdivision 38-P if it had been a supply; you are not entitled to the input tax credit for the acquisition or importation. (3) If your acquisition or importation is *partly creditable, the input tax credit is reduced to the extent (expressed as a percentage) to which the acquisition or importation is made for a *creditable purpose. (4) This section does not apply in relation to: (a) the acquisition or importation of a *car that is not a *luxury car because of subsection 25-1(2) of the A New Tax System (Luxury Car Tax) Act 1999; or Note: Emergency vehicles, cars fitted to transport disabled people, non-passenger commercial vehicles, motor homes and campervans are not luxury cars under that subsection. (b) the acquisition of a car by lease or hire. (5) This section has effect despite sections 11-25 and 15-20 (which are about the amount of input tax credits on creditable acquisitions and creditable importations). Subdivision 69-B-Elections for GST purposes relating to meal entertainment and entertainment facilities 69-15 What this Subdivision is about The GST consequences of incurring certain expenses for the provision of meal entertainment and entertainment facilities depend on elections made under fringe benefits tax law. These elections might not be made until after GST returns are due. This Subdivision allows elections to be made for GST purposes so that GST returns can take into account the likely application of subsection 69-5(3A) to those expenses, before the fringe benefits tax elections are made. 69-20 Effect of elections on net amounts (1) If you make an election under this Subdivision that has effect during a particular tax period, your *net amount for the tax period must be worked out on the basis of that election. (2) This section has effect despite section 17-5 (which is about working out your net amount). 69-25 Election to use the 50/50 split method for meal entertainment You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as *non-deductible expenses because of paragraph 69-5(3A)(a), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if: (a) an election were in force under section 37AA of the Fringe Benefits Tax Assessment Act 1986 (but no further election were in force under section 37CA of that Act); and (b) section 51AEA of the *ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations. 69-30 Election to use the 12 week register method for meal entertainment (1) You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as *non-deductible expenses because of paragraph 69-5(3A)(b), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if: (a) an election were in force under section 37CA of the Fringe Benefits Tax Assessment Act 1986; and (b) section 51AEB of the *ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations. (2) However, you cannot make the election unless you have a *valid meal entertainment register. 69-35 Election to use the 50/50 split method for entertainment facilities You may elect to have acquisitions or importations treated, for the purposes of this Subdivision, as *non-deductible expenses because of paragraph 69-5(3A)(c), to the extent that the acquisitions or importations would be non-deductible expenses because of that paragraph if: (a) an election were in force under section 152B of the Fringe Benefits Tax Assessment Act 1986; and (b) section 51AEC of the *ITAA 1936 were to apply, because of that election, to expenses relating to the acquisitions or importations. 69-40 When elections take effect (1) An election under this Subdivision is taken to have effect, or to have had effect, from the start of the tax period specified in the election. (2) The tax period may be a future tax period or the current tax period. It cannot be a tax period that has already come to an end. 69-45 When elections cease to have effect If a circumstance specified in the second column of the following table occurs, the election ceases to have effect from the start of the tax period specified in the third column: |When elections cease to have effect | |Item |Kind of |Circumstance |Tax period | | |election | | | |1 |Any election|You withdraw the |The tax period | | |under this |election |(which must not be| | |Subdivision | |a past tax period)| | | | |specified in the | | | | |withdrawal | |2 |An election |You make an |The tax period at | | |under |election under |the start of which| | |section 69-2|section 69-30 |the election under| | |5 | |section 69-30 | | | | |takes effect | |3 |An election |You make an |The tax period at | | |under |election under |the start of which| | |section 69-3|section 69-25 |the election under| | |0 | |section 69-25 | | | | |takes effect | |4 |An election |You cease to have|The tax period | | |under |a *valid meal |during which you | | |section 69-3|entertainment |cease to have such| | |0 |register |a register | |5 |An election |You make an |The tax period | | |under |election under |during which the | | |section 69-2|section 37AA or |election is made | | |5 or 69-30 |37CA of the | | | | |Fringe Benefits | | | | |Tax Assessment | | | | |Act 1986 | | |6 |An election |You make an |The tax period | | |under |election under |during which the | | |section 69-3|section 152B of |election is made | | |5 |that Act | | 69-50 Adjustment events relating to elections (1) The following are adjustment events if they have the effect of changing the extent to which an acquisition you made is a *creditable acquisition: (a) an election you make under this Subdivision ceases to have effect at a time other than the start of an *FBT year; (b) an election is made under section 37AA, 37CA or 152B of the Fringe Benefits Tax Assessment Act 1986 for an FBT year, without one or more corresponding elections under this Subdivision having been made covering all the tax periods in that year; (c) an election is not made under section 37AA, 37CA or 152B of that Act for an FBT year, but one or more corresponding elections have been made under this Subdivision covering one or more of the tax periods in that year. (2) However, an *adjustment event under this section arises only in respect of a tax period in which: (a) the day occurs by which you are required, under section 68 of the Fringe Benefits Tax Assessment Act 1986, to furnish a return to the Commissioner relating to an *FBT year; or (b) if you are not required under that section to lodge a return relating to that FBT year-the day occurs by which you would have been required under that section to lodge a return relating to that FBT year, if you were required to lodge the return. (3) Subdivision 19-C applies to the acquisition in question as if every *adjustment event under this section that occurred during the *FBT year, and that relates to the acquisition, occurred during the tax period referred to in paragraph 19-70(a). (4) This table sets out when elections that you make or fail to make under section 37AA, 37CA or 152B of the Fringe Benefits Tax Assessment Act 1986 correspond to elections under this Subdivision: |Corresponding elections | |Item |These elections |correspond to these| | |under the Fringe |elections under | | |Benefits Tax |this Subdivision...| | |Assessment Act | | | |1986... | | |1 |an election under |an election under | | |section 37AA, but |section 69-25 | | |without a further | | | |election under | | | |section 37CA | | |2 |an election under |an election under | | |section 37AA, |section 69-30 | | |together with a | | | |further election | | | |under section 37CA | | |3 |an election under |an election under | | |section 152B |section 69-35 | 69-55 Adjustment notes not required Subsection 29-20(3) does not apply to a *decreasing adjustment arising from an *adjustment event of a kind referred to in section 69-50. Division 70-Financial supplies (reduced credit acquisitions) 70-1 What this Division is about In some cases, acquisitions relating to financial supplies can attract a reduced input tax credit, even though no input tax credit could arise under the basic rules. 70-5 Acquisitions that attract the reduced credit (1) The regulations may provide that acquisitions of a specified kind that relate to making *financial supplies can give rise to an entitlement to a reduced input tax credit. These are reduced credit acquisitions. (1A) However, an acquisition is not a reduced credit acquisition to the extent (if any) that, without this Division applying, an entity is entitled to an input tax credit for the acquisition. Note: Acquisitions relating to financial supplies can give rise to input tax credits: see subsections 11-15(4) and (5). (2) For each kind of *reduced credit acquisition specified, the regulations must specify a percentage to which the input tax credit is reduced. 70-10 Extended meaning of creditable purpose (1) The fact that a *reduced credit acquisition relates to making *financial supplies does not stop it being for a *creditable purpose, to the extent that it relates to making financial supplies. (2) The fact that you *apply a *reduced credit acquisition in making *financial supplies does not stop it being applied for a *creditable purpose, to the extent that it relates to making financial supplies. (3) This section has effect despite sections 11-15 and 129-50 (which are about the meaning of creditable purpose). 70-15 How much are the reduced input tax credits? (1) The amount of an input tax credit for a *creditable acquisition of a *reduced credit acquisition is an amount equal to the GST payable on the supply of the acquisition multiplied by the percentage specified under subsection 70-5(2) for acquisitions of that kind. (2) However, the amount of such an input tax credit is further reduced if the acquisition is only *partly creditable. (3) This section has effect despite section 11-25 (which is about the amount of input tax credits). 70-20 Extent of creditable purpose (1) If: (a) a *reduced credit acquisition is a *creditable acquisition; and (b) it is not wholly for a *creditable purpose because of this Division; it is *partly creditable. (2) The extent to which the acquisition is acquired or applied for a *creditable purpose is worked out using the following formula: [pic] where: extent of creditable purpose is the extent to which the purpose for which you applied or acquired the acquisition was a *creditable purpose otherwise than because of this Division, expressed as a percentage. extent of Division 70 creditable purpose is the extent to which the purpose for which you applied or acquired the acquisition was a *creditable purpose because of this Division, expressed as a percentage. 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. Note: This section affects sections 11-30 and 129-40. It is used even if the reduced credit acquisition is used wholly in carrying on your enterprise (unless the acquisition was wholly for a creditable purpose because of this Division, then section 70-15 applies). Example 1: You make a reduced credit acquisition of $110,000, wholly for the purposes of carrying on your enterprise, partly for the purpose of making financial supplies (40%) and partly for the purpose of making taxable supplies (60%). Assume the percentage credit reduction to be 50%. The extent to which you make the acquisition for a creditable purpose is: [pic] Applying section 11-30, your input tax credit is $8,000 (assuming you were liable for all the consideration). Example 2: You subsequently apply the acquisition partly in making financial supplies (40%), partly in making taxable supplies (40%) and partly for private use (20%). The extent to which you made the acquisition for a creditable purpose is: [pic] Applying Division 129, your input tax credit is reduced to $6,000, giving you an increasing adjustment of $2,000. (3) The Commissioner may determine, in writing, one or more ways in which to work out, for the purpose of subsection (2), the extent to which an acquisition is for a *creditable purpose. 70-25 Sale of reduced credit acquisitions (Division 132) (1) If: (a) you supply a *reduced credit acquisition in circumstances to which Division 132 applies; and (b) you made the acquisition for a *creditable purpose because of this Division, or you applied the acquisition for a *creditable purpose because of this Division; this section applies for the purposes of Division 132. (2) In working out the full input tax credit in subsection 132- 5(2), the reference to a *creditable purpose in paragraph (a) of the definition of full input tax credit is to be read as a reference to a *creditable purpose otherwise than because of Division 70. (3) In working out the adjusted input tax credit in subsection 132- 5(2), the extent of the *creditable purpose because of subsection 132-5(4) is increased by the following extent: [pic] where: extent of Division 70 creditable purpose has the same meaning as in section 70-20. percentage credit reduction has the same meaning as in section 70- 20. Division 71-Fringe benefits provided by input taxed suppliers 71-1 What this Division is about Suppliers making input taxed supplies may not be entitled to input tax credits for acquisitions or importations they make to provide fringe benefits to their employees. Note: Under the Fringe Benefits Tax Assessment Act 1986, a lower rate of fringe benefits tax is payable for providing fringe benefits without entitlement to input tax credits. 71-5 Acquisitions by input taxed suppliers to provide fringe benefits (1) An acquisition that solely or partly relates to making supplies that are *input taxed is not a *creditable acquisition if: (a) the acquisition would (but for this section) be an acquisition of a kind referred to in paragraph 149A(2)(b) of the Fringe Benefits Tax Assessment Act 1986; and (b) the acquisition specifically relates to the provision of a particular benefit (within the meaning of that Act) in respect of which *fringe benefits tax is or will be payable. (2) However, this section does not apply to an acquisition if: (a) the only reason it relates to making supplies that are *input taxed is because it relates to making *financial supplies; and (b) you do not *exceed the financial acquisitions threshold. (3) This section has effect despite section 11-5 (which is about what is a creditable acquisition). 71-10 Importations by input taxed suppliers to provide fringe benefits (1) An importation that solely or partly relates to making supplies that are *input taxed is not a *creditable importation if: (a) the importation would (but for this section) be an importation of a kind referred to in paragraph 149A(2)(b) of the Fringe Benefits Tax Assessment Act 1986; and (b) the importation specifically relates to the provision of a particular benefit (within the meaning of that Act) in respect of which *fringe benefits tax is or will be payable. (2) However, this section does not apply to an importation if: (a) the only reason it relates to making supplies that are *input taxed is because it relates to making *financial supplies; and (b) you do not *exceed the financial acquisitions threshold. (3) This section has effect despite section 15-5 (which is about what is a creditable importation). Division 72-Associates Table of Subdivisions 72-A Supplies without consideration 72-B Acquisitions without consideration 72-C Supplies for inadequate consideration 72-D Application of this Division to certain sub-entities 72-1 What this Division is about This Division ensures that supplies to, and acquisitions from, your associates without consideration are brought within the GST system, and that supplies to your associates for inadequate consideration are properly valued for GST purposes. Subdivision 72-A-Supplies without consideration 72-5 Taxable supplies without consideration (1) The fact that a supply to your *associate is without *consideration, does not stop the supply being a *taxable supply if: (a) your associate is not *registered or *required to be registered; or (b) your associate acquires the thing supplied otherwise than solely for a *creditable purpose. (2) This section has effect despite paragraph 9-5(a) (which would otherwise require a taxable supply to be for consideration). (3) However, this section does not apply to any supply that is constituted by an insured entity settling a claim under an *insurance policy or by an entity (other than an *operator) settling a claim under a *compulsory third party scheme. 72-10 The value of taxable supplies without consideration (1) If a supply to your *associate without *consideration is a *taxable supply, its value is the *GST exclusive market value of the supply. (2) This section has effect despite section 9-75 (which is about the value of taxable supplies). 72-15 Attributing the GST to tax periods (1) The tax period to which the GST on a *taxable supply to your *associate without *consideration is attributable is the tax period in which the supply first becomes a supply that is *connected with Australia. (2) This section has effect despite section 29-5 (which is about attributing GST on taxable supplies). Subdivision 72-B-Acquisitions without consideration 72-40 Creditable acquisitions without consideration (1) The fact that an acquisition from your *associate is without *consideration does not stop the acquisition being a *creditable acquisition if you acquire the thing supplied otherwise than solely for a *creditable purpose. (2) This section has effect despite paragraph 11-5(c) (which would otherwise require a creditable acquisition to be for consideration). (3) However, this section does not apply to any acquisition that is constituted by an insurer settling a claim under an *insurance policy or by an *operator settling a claim under a *compulsory third party scheme. 72-45 The amount of the input tax credit (1) The amount of the input tax credit on an acquisition from your *associate that is without *consideration is as follows: [pic] where: extent of creditable purpose is the extent to which the creditable acquisition is for a *creditable purpose, expressed as a percentage of the total purpose of the acquisition. full input tax credit is what would have been the amount of the input tax credit for the acquisition if it had been made solely for a creditable purpose and you had provided, or had been liable to provide, all of the consideration for the acquisition. (1A) However, if: (a) an *annual apportionment election that you have made has effect at the end of the tax period to which the input tax credit is attributable; and (b) the acquisition is not an acquisition of a kind specified in the regulations made for the purposes of paragraph 131- 40(1)(b); the amount of the input tax credit on the acquisition is worked out under section 131-40 as if you had provided, or had been liable to provide, all of the *consideration for the acquisition. (2) This section has effect despite subsection 11-30(3) (which is about the amount of input tax credits on partly creditable acquisitions). 72-50 Attributing the input tax credit to tax periods (1) The tax period to which the input tax credit for a *creditable acquisition from your *associate without *consideration is attributable is the tax period in which the supply to which the acquisition relates first becomes a supply that is *connected with Australia. (2) This section has effect despite section 29-10 (which is about attributing input tax credits for creditable acquisitions). Subdivision 72-C-Supplies for inadequate consideration 72-70 The value of taxable supplies for inadequate consideration (1) If a supply to your *associate for *consideration that is less than the *GST inclusive market value is a *taxable supply, its value is the *GST exclusive market value of the supply. (2) Subsection (1) does not apply if: (a) your associate is *registered or *required to be registered; and (b) your associate acquires the thing supplied solely for a *creditable purpose. (3) This section has effect despite section 9-75 (which is about the value of taxable supplies). Subdivision 72-D-Application of this Division to certain sub-entities 72-90 GST branches This Division applies to a *GST branch of an entity as if the GST branch were an *associate of: (a) that entity; and (b) every other GST branch of that entity; and (c) any other associate of that entity. 72-92 Non-profit sub-entities This Division applies to a *non-profit sub-entity of an entity as if the non-profit sub-entity were an *associate of: (a) that entity; and (b) every other non-profit sub-entity of that entity; and (c) any other associate of that entity. 72-95 Commonwealth government entities This Division applies to a *government entity that is: (a) a Department of State of the Commonwealth; or (b) a Department of the Parliament; or (c) an Executive Agency, or Statutory Agency, within the meaning of the Public Service Act 1999; or (d) an organisation, established by the Commonwealth, of a kind referred to in paragraph (e) of the definition of government entity in section 41 of the A New Tax System (Australian Business Number) Act 1999; as if the government entity were an *associate of the Commonwealth, of every other government entity of a kind referred to in paragraph (a), (b), (c) or (d) and of any other associate of the Commonwealth. 72-100 State or Territory government entities This Division applies to a *government entity that is: (a) a Department of State of a State or Territory; or (b) an organisation, established by a State or Territory, of a kind referred to in paragraph (e) of the definition of government entity in section 41 of the A New Tax System (Australian Business Number) Act 1999; as if the government entity were an *associate of: (c) that State or Territory; and (d) every other Department of State of that State or Territory, or organisation, established by that State or Territory, of a kind referred to in paragraph (e) of that definition; and (e) any other associate of that State or Territory. Division 75-Sale of freehold interests etc. 75-1 What this Division is about This Division allows you to use a margin scheme to bring within the GST system your taxable supplies of freehold interests in land, of stratum units and of long-term leases. 75-5 Applying the margin scheme (1) The *margin scheme applies in working out the amount of GST on a *taxable supply of *real property that you make by: (a) selling a freehold interest in land; or (b) selling a *stratum unit; or (c) granting or selling a *long-term lease; if you and the *recipient of the supply have agreed in writing that the margin scheme is to apply. (1A) The agreement must be made: (a) on or before the making of the supply; or (b) within such further period as the Commissioner allows. Note: Refusing to allow, or allowing, a further period within which to make an agreement is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953). (1B) A supply that you make to your *associate is taken for the purposes of subsection (1) to be a sale to your associate whether or not the supply is for *consideration. (2) However, the *margin scheme does not apply if you acquired the entire freehold interest, *stratum unit or *long-term lease through a supply that was *ineligible for the margin scheme. Note: If you acquired part of the interest, unit or lease through a supply that was ineligible for the margin scheme, you may have an increasing adjustment: see section 75-22. (3) A supply is ineligible for the margin scheme if: (a) it is a *taxable supply on which the GST was worked out without applying the *margin scheme; or (b) it is a supply of a thing you acquired by *inheriting it from a deceased person, and the deceased person had acquired all of it through a supply that was ineligible for the margin scheme; or (c) it is a supply in relation to which all of the following apply: (i) you were a *member of a *GST group at the time you acquired the interest, unit or lease in question; (ii) the entity from whom you acquired it was a member of the GST group at that time; (iii) the last supply of the interest, unit or lease by an entity who was not (at the time of that supply) a member of the GST group to an entity who was (at that time) such a member was a supply that was ineligible for the margin scheme; or (d) it is a supply in relation to which both of the following apply: (i) you acquired the interest, unit or lease from the *joint venture operator of a *GST joint venture at a time when you were a *participant in the joint venture; (ii) the joint venture operator had acquired the interest, unit or lease through a supply that was ineligible for the margin scheme; or (e) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity as, or as part of, a *supply of a going concern to you that was *GST-free under Subdivision 38-J; (ii) the entity was *registered or *required to be registered, at the time of the acquisition; (iii) the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or (f) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity as, or as part of, a supply to you that was GST-free under Subdivision 38-O; (ii) the entity was registered or required to be registered, at the time of the acquisition; (iii) the entity had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme; or (g) it is a supply in relation to which all of the following apply: (i) you acquired the interest, unit or lease from an entity who was your *associate, and who was registered or required to be registered, at the time of the acquisition; (ii) the acquisition from your associate was without *consideration; (iii) the supply by your associate was not a taxable supply; (iv) your associate made the supply in the course or furtherance of an *enterprise that your associate *carried on; (v) your associate had acquired the entire interest, unit or lease through a taxable supply on which the GST was worked out without applying the margin scheme. (3A) Subparagraphs (3)(g)(iii) and (iv) do not apply if the acquisition from your *associate was not by means of a supply by your associate. (4) A reference in paragraph (3)(b), (c) or (d) to a supply that was ineligible for the margin scheme is a reference to a supply: (a) that was ineligible for the margin scheme because of one or more previous applications of subsection (3); or (b) that would have been ineligible for the margin scheme for that reason if subsection (3) had been in force at all relevant times. 75-10 The amount of GST on taxable supplies (1) If a *taxable supply of *real property is under the *margin scheme, the amount of GST on the supply is 1/11 of the *margin for the supply. (2) Subject to subsection (3) and section 75-11, the margin for the supply is the amount by which the *consideration for the supply exceeds the consideration for your acquisition of the interest, unit or lease in question. (3) Subject to section 75-11, if: (a) the circumstances specified in an item in the second column of the table in this subsection apply to the supply; and (b) an *approved valuation of the freehold interest, *stratum unit or *long-term lease, as at the day specified in the corresponding item in the third column of the table, has been made; the margin for the supply is the amount by which the *consideration for the supply exceeds that valuation of the interest, unit or lease. |Use of valuations to work out margins | |Item |When valuations may be |Days when | | |used |valuations | | | |are to be | | | |made | |1 |The supplier acquired the |1 July 2000| | |interest, unit or lease | | | |before 1 July 2000, and | | | |items 2, 3 and 4 do not | | | |apply. | | |2 |The supplier acquired the |The date of| | |interest, unit or lease |effect of | | |before 1 July 2000, but |your | | |does not become |registratio| | |*registered or *required |n, or the | | |to be registered until |day on | | |after 1 July 2000. |which you | | | |applied for| | | |registratio| | | |n (if it is| | | |earlier) | |2A |The supplier acquired the |1 July 2000| | |interest, unit or lease on| | | |or after 1 July 2000, but | | | |the supply to the | | | |supplier: | | | |(a) was *GST-free under | | | |subsection 38-445(1A); and| | | | | | | |(b) related to a supply | | | |before 1 July 2000, by way| | | |of lease, that would have | | | |been GST-free under | | | |section 38-450 had it been| | | |made on or after 1 July | | | |2000. | | |3 |The supplier is |1 July 2000| | |*registered or *required | | | |to be registered and has | | | |held the interest, unit or| | | |lease since before 1 July | | | |2000, and there were | | | |improvements on the land | | | |or premises in question as| | | |at 1 July 2000. | | |4 |The supplier is the |The day on | | |Commonwealth, a State or a|which the | | |Territory and has held the|*taxable | | |interest, unit or lease |supply | | |since before 1 July 2000, |takes place| | |and there were no | | | |improvements on the land | | | |or premises in question as| | | |at 1 July 2000. | | (3A) If: (a) the circumstances specified in item 4 in the second column of the table in subsection (3) apply to the supply; and (b) there are improvements on the land or premises in question on the day on which the *taxable supply takes place; the valuation is to be made as if there are no improvements on the land or premises on that day. (4) This section has effect despite section 9-70 (which is about the amount of GST on taxable supplies). Note: Section 9-90 (rounding of amounts of GST) can apply to amounts of GST worked out using this section. 75-11 Margins for supplies of real property in particular circumstances Margin for supply of real property acquired from fellow member of GST group (1) If: (a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were *members of the same *GST group; and (b) on or after 1 July 2000, there has been a supply (an earlier supply) of the interest, unit or lease that occurred at a time when the supplier was not a member of the GST group; and (ba) the *recipient was at that time, or subsequently became, a member of the GST group; the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (c) the consideration for the last such earlier supply, if the supplier and the recipient were not *associates at that time; or (d) the *GST inclusive market value of the interest, unit or lease at that time, if the 2 entities were associates at that time. (2) If: (a) you acquired the interest, unit or lease in question at a time when both you and the entity from whom you acquired it were *members of the same *GST group; and (b) subsection (1) does not apply; the margin for the supply you make is the amount by which the *consideration for the supply exceeds an *approved valuation of the interest, unit or lease as at 1 July 2000. Margin for supply of real property acquired from joint venture operator of a GST joint venture (2A) If: (a) you acquired the interest, unit or lease in question at a time when you were a *participant in a *GST joint venture and the entity from whom you acquired it was the *joint venture operator of the joint venture; and (b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and (c) on or after 1 July 2000, there has been a supply (an earlier supply) of the interest, unit or lease to the entity from whom you acquired it (whether or not that entity was the joint venture operator of the joint venture at the time of that acquisition); the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (d) the consideration for the last such earlier supply, if the supplier and the *recipient were not *associates at the time of the earlier supply; or (e) the *GST inclusive market value of the interest, unit or lease at that time, if the 2 entities were associates at that time. (2B) If: (a) you acquired the interest, unit or lease in question at a time when you were a *participant in a *GST joint venture and the entity from whom you acquired it was the *joint venture operator of the joint venture; and (b) you acquired the interest, unit or lease for consumption, use or supply in the course of activities for which the joint venture was entered into; and (c) subsection (2A) does not apply; the margin for the supply you make is the amount by which the *consideration for the supply exceeds an *approved valuation of the interest, unit or lease as at 1 July 2000. Margin for supply of real property acquired from deceased estate (3) If: (a) you acquired the interest, unit or lease in question by *inheriting it; and (b) none of subsections (1) to (2B) applies; and (c) the entity from whom you inherited the interest, unit or lease (the deceased) acquired it before 1 July 2000; the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (ca) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply-that consideration; or (d) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was neither *registered nor *required to be registered- an *approved valuation of the interest, unit or lease as at the latest of: (i) 1 July 2000; or (ii) the day on which you inherited the interest, unit or lease; or (iii) the first day on which you registered or were required to be registered; or (e) if paragraph (ca) does not apply and, immediately before the time at which you inherited the interest, unit or lease, the deceased was registered or required to be registered-an approved valuation of the interest, unit or lease as at the later of: (i) 1 July 2000; or (ii) the first day on which the deceased registered or was required to be registered. (4) If: (a) you acquired the interest, unit or lease in question by *inheriting it; and (b) none of subsections (1) to (2B) applies; and (c) the entity from whom you inherited the interest, unit or lease (the deceased) acquired it on or after 1 July 2000; the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (d) if you know what was the consideration for the supply of the interest, unit or lease to the deceased and you choose to use that consideration to work out the margin for the supply-that consideration; or (e) if paragraph (d) does not apply-an *approved valuation of the interest, unit or lease as at the day on which the deceased acquired it. Margin for supply of real property acquired as a GST-free going concern or as GST-free farm land (5) If: (a) you acquired the interest, unit or lease in question from an entity as, or as part of: (i) a *supply of a going concern to you that was *GST-free under Subdivision 38-J; or (ii) a supply to you that was GST-free under Subdivision 38-O; and (b) the entity was *registered or *required to be registered, at the time of the acquisition; and (c) none of subsections (1) to (4) applies; the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (d) if that entity had acquired the interest, unit or lease before 1 July 2000 and on that day was registered or required to be registered: (i) if you choose to apply an *approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at 1 July 2000; or (ii) if subparagraph (i) does not apply-the *GST inclusive market value of the interest, unit or lease as at 1 July 2000; or (e) if that entity had acquired the interest, unit or lease on or after 1 July 2000 and had been registered or required to be registered at the time of the acquisition: (i) if the entity's acquisition was for consideration and you choose to apply an approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at the day on which the entity had acquired it; or (ii) if the entity's acquisition was for consideration and subparagraph (i) does not apply-that consideration; or (iii) if the entity's acquisition was without consideration-the GST inclusive market value of the interest, unit or lease as at the time of the acquisition; or (f) if that entity had not been registered or required to be registered at the time of the entity's acquisition of the interest, unit or lease (and paragraph (d) does not apply): (i) if you choose to apply an approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at the first day on which the entity was registered or required to be registered; or (ii) if subparagraph (i) does not apply-the GST inclusive market value of the interest, unit or lease as at that day. Margin for supply of real property acquired from associate (6) If: (a) you acquired the interest, unit or lease in question from an entity who was your *associate, and who was *registered or *required to be registered, at the time of the acquisition; and (b) the acquisition from your associate was without *consideration; and (c) the supply by your associate was not a *taxable supply; and (d) your associate made the supply in the course or furtherance of an *enterprise that your associate *carried on; and (e) none of subsections (1) to (5) applies; the margin for the supply you make is the amount by which the consideration for the supply exceeds: (f) if your associate had acquired the interest, unit or lease before 1 July 2000 and on that day was registered or required to be registered: (i) if you choose to apply an *approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at 1 July 2000; or (ii) if subparagraph (i) does not apply-the *GST inclusive market value of the interest, unit or lease as at 1 July 2000; or (g) if your associate had acquired the interest, unit or lease on or after 1 July 2000 and had been registered or required to be registered at the time of the acquisition: (i) if your associate's acquisition was for consideration and you choose to apply an approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at the day on which your associate had acquired it; or (ii) if your associate's acquisition was for consideration and subparagraph (i) does not apply-that consideration; or (iii) if your associate's acquisition was without consideration-the GST inclusive market value of the interest, unit or lease at the time of the acquisition; or (h) if your associate had not been registered or required to be registered at the time of your associate's acquisition of the interest, unit or lease (and paragraph (f) does not apply): (i) if you choose to apply an approved valuation to work out the margin for the supply-an approved valuation of the interest, unit or lease as at the first day on which the entity was registered or required to be registered; or (ii) if subparagraph (i) does not apply-the GST inclusive market value of the interest, unit or lease as at that day. (6A) Paragraphs (6)(c) and (d) do not apply if the acquisition from your *associate was not by means of a supply by your associate. (6B) To avoid doubt, you cannot be taken, for the purposes of paragraph (5)(f) or (6)(h), to be *registered or *required to be registered on a day earlier than 1 July 2000. (7) If: (a) you acquired the interest, unit or lease in question from an entity who was your *associate at the time of the acquisition; and (b) none of the other subsections of this section apply; the margin for the supply you make is the amount by which the *consideration for the supply exceeds: (c) if your acquisition was made before 1 July 2000-an *approved valuation of the interest, unit or lease as at 1 July 2000; or (d) if your acquisition was made on or after 1 July 2000-the *GST inclusive market value of the interest, unit or lease at the time of the acquisition. (8) Subsection (6) or (7) applies to an acquisition through a supply made by: (a) a *GST branch; or (b) a*non-profit sub-entity; or (c) a *government entity of a kind referred to in section 72-95 or 72-100; as if Subdivision 72-D affected the operation of that subsection in the same way that it affects the operation of Division 72. 75-12 Working out margins to take into account failure to pay full consideration In working out the *margin for a *taxable supply of *real property you make (the later supply), if: (a) you had acquired the interest, unit or lease in question through a supply (the earlier supply); and (b) the *consideration for: (i) if your acquisition was not an acquisition from a *member of a *GST group of which you were also a member at the time of the acquisition-the earlier supply; or (ii) if your acquisition was such an acquisition-the last supply of the interest, unit or lease at a time when the supplier of that last supply was not, but the *recipient of that last supply was, a member of the GST group; had not been paid in full at the time of the later supply; treat the amount of the consideration as having been reduced by the amount of unpaid consideration referred to in paragraph (b). Note: If you subsequently pay more of the consideration for the earlier supply, you may have a decreasing adjustment: see section 75-27. 75-13 Working out margins to take into account supplies to associates In working out the *margin for a *taxable supply of *real property you make to an entity who is your *associate at the time of the supply, treat the *consideration for the supply (whether or not the supply was for consideration) as if it were the same as the *GST inclusive market value of the interest, unit or lease at the time of the supply. 75-14 Consideration for acquisition of real property not to include cost of improvements etc. (1) To avoid doubt, in working out the *consideration for an acquisition for the purposes of applying the *margin scheme to a *taxable supply of *real property, disregard: (a) the cost or value of any other acquisitions that have been made by you, or any work that has been performed, in relation to the real property; and (b) the cost or value of any other acquisitions that are intended to be made by you, or any work that is intended to be performed, in relation to the real property after its acquisition; including acquisitions or work connected with bringing into existence the interest, unit or lease supplied. (2) This section does not affect what constitutes *consideration for a purpose not connected with applying the *margin scheme. 75-15 Subdivided land For the purposes of sections 75-10 to 75-14, if the freehold interest, *stratum unit or *long-term lease you supply relates only to part of land or premises that you acquired, the *consideration for your acquisition of that part is the corresponding proportion of the consideration for the land or premises that you acquired. 75-16 Margins for supplies of real property acquired through several acquisitions (1) If: (a) you make a *taxable supply of *real property under the *margin scheme; and (b) the interest, unit or lease in question is one that you acquired through 2 or more acquisitions (partial acquisitions); and (c) one of the following provisions (a margin provision) applies in relation to such a partial acquisition, or would so apply if the partial acquisition had been an acquisition of the whole of the interest, unit or lease: (i) section 75-10; (ii) subsection 75-11(1), (2), (2A), (2B), (3), (4), (5), (6) or (7); the margin provision applies, in working out the margin for the supply you make, only to the extent that the supply is connected to the partial acquisition. (2) The application of a margin provision in relation to one of the partial acquisitions does not prevent that margin provision or a different margin provision applying in relation to another of the partial acquisitions. 75-20 Supplies under a margin scheme do not give rise to creditable acquisitions (1) An acquisition of a freehold interest in land, a *stratum unit or a *long-term lease is not a *creditable acquisition if the supply of the interest, unit or lease was a *taxable supply under the *margin scheme. (2) This section has effect despite section 11-5 (which is about what is a creditable acquisition). 75-22 Increasing adjustment relating to input tax credit entitlement (1) You have an increasing adjustment if: (a) you make a *taxable supply of *real property under the *margin scheme; and (b) an acquisition that you made of part of the interest, unit or lease in question was made through a supply that was *ineligible for the margin scheme; and (c) you were, or are, entitled to an input tax credit for the acquisition. The amount of the increasing adjustment is an amount equal to the *previously attributed input tax credit amount for the acquisition. (2) You have an increasing adjustment if: (a) you make a *taxable supply of *real property under the *margin scheme; and (b) you acquired all or part of the interest, unit or lease in question by inheriting it; and (c) the entity from whom you inherited (the deceased) had acquired part of the interest, unit or lease that you inherited through a supply that was *ineligible for the margin scheme; and (d) the deceased was entitled to an input tax credit for that acquisition. The amount of the increasing adjustment is an amount equal to the *previously attributed input tax credit amount for the acquisition. (3) You have an increasing adjustment if: (a) you make a *taxable supply of *real property under the *margin scheme; and (b) an acquisition that you made of part of the interest, unit or lease in question was made through a supply that was *ineligible for the margin scheme because of paragraph 75- 5(3)(e), (f) or (g); and (c) the entity from whom you made the acquisition had been entitled to an input tax credit for its acquisition. (4) You have an increasing adjustment if: (a) you make a *taxable supply of *real property under the *margin scheme; and (b) the acquisition that you made of the interest, unit or lease in question: (i) was made through a supply that was *GST-free under Subdivision 38-J or Subdivision 38-O; or (ii) was made through a supply (other than a taxable supply) from your *associate without *consideration and in the course or furtherance of an *enterprise that your associate *carried on; or (iii) was made from your associate but not by means of a supply from your associate; and (c) the entity from whom you acquired the interest, unit or lease: (i) acquired part of the interest, unit or lease through a supply that would have been *ineligible for the margin scheme if it had been a supply of the whole of the interest, unit or lease; and (ii) had been entitled to an input tax credit for its acquisition; and (iii) was *registered or *required to be registered, at the time of your acquisition of the interest, unit or lease. (5) The amount of the *increasing adjustment under subsection (3) or (4) is an amount equal to 1/11 of: (a) if you choose to apply an *approved valuation to work out the amount-an approved valuation of the part of the interest, unit or lease referred to in paragraph (3)(b) or subparagraph (4)(c)(i) as at the day on which the entity had acquired it; or (b) otherwise-the *consideration for the entity's acquisition of that part of the interest, unit or lease. 75-25 Adjustments relating to bad debts (1) If: (a) you have an *adjustment under Division 21 relating to a supply that you made that is a *taxable supply of *real property under the *margin scheme; and (b) the amount of the adjustment would (apart from this section) exceed 1/11 of the *margin for the supply; the amount of the adjustment is 1/11 of the margin for the supply. (2) This section has effect despite sections 21-5 and 21-10 (which are about adjustments for writing off and recovering suppliers' bad debts). 75-27 Decreasing adjustment for later payment of consideration (1) You have a decreasing adjustment if: (a) section 75-12 applied to working out the *margin for a *taxable supply of *real property that you made; and (b) after you made the supply, a further amount of the *consideration was paid for the earlier supply referred to in that section. (2) The amount of the decreasing adjustment is an amount equal to 1/11 of the further amount of the *consideration paid. 75-30 Tax invoices not required for supplies of real property under the margin scheme (1) You are not required to issue a *tax invoice for a *taxable supply that you make that is solely a supply of *real property under the *margin scheme. (2) This section has effect despite section 29-70 (which is about the requirement to issue tax invoices). 75-35 Approved valuations (1) The Commissioner may, by legislative instrument, determine in writing requirements for making valuations for the purposes of this Division. (2) A valuation made in accordance with those requirements is an approved valuation. Division 78-Insurance 78-1 What this Division is about Stamp duty is not included in working out the GST on insurance premiums. Insurers have decreasing adjustments which enable the net GST on insurance to reflect correctly their margins after settlements of claims are taken into account. Note: Payments and supplies under compulsory third party schemes are dealt with in some cases under this Division and in others under Division 79 or 80. Table of Subdivisions 78-A Insurers 78-B Insured entities 78-C Third parties 78-D Insured entities that are not registered etc. 78-E Statutory compensation schemes 78-F Miscellaneous Subdivision 78-A-Insurers 78-5 GST on insurance premiums is exclusive of stamp duty (1) The *value of a *taxable supply of an *insurance policy is worked out as if the *price of the supply were reduced by the amount of any stamp duty payable under a *State law or *Territory law in respect of the supply. (2) This section has effect despite section 9-75 (which is about the value of taxable supplies). 78-10 Decreasing adjustments for settlements of insurance claims (1) An insurer has a decreasing adjustment if, in settlement of a claim under an *insurance policy, the insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply. (2) However, this section only applies if: (a) the supply of the *insurance policy by the insurer was solely or partly a *taxable supply; and (b) either: (i) there was no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened; or (ii) there was an entitlement to such an input tax credit, but the amount of the input tax credit was less than the GST payable by the insurer for the taxable supply; and (c) the insurer settles the claim for a *creditable purpose; and (d) the insurer is *registered, or *required to be registered; and (e) the settlement does not relate solely to one or more *non- creditable insurance events. (2A) In working out the amount of an input tax credit for the purposes of subparagraph (2)(b)(ii), disregard sections 131-40 and 131-50 (which are about amounts of input tax credits under the annual apportionment rules). (3) An event is a non-creditable insurance event if the supply of an *insurance policy would not be a *taxable supply if it were only an insurance policy against loss, damage, injury or risk that relates to that event happening. 78-15 How to work out the decreasing adjustments No input tax credit for the premium (1) If there was no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened, the amount of the decreasing adjustment is 1/11 of the *settlement amount. Partial input tax credit for the premium (2) If there was an entitlement to such an input tax credit, the amount of the decreasing adjustment is as follows: [pic] where: extent of input tax credit is the amount of the input tax credit expressed as a fraction of the GST payable for the supply of the *insurance policy for the period to which the premium relates. Note: There is no decreasing adjustment if there is a full input tax credit for the premium paid: see paragraph 78-10(2)(b). Non-creditable insurance events (3) The amount of the decreasing adjustment under subsection (1) or (2) is reduced to the extent (if any) that the settlement relates to one or more *non-creditable insurance events. Settlement amounts (4) The settlement amount is worked out using this method statement. Method statement Step 1. Add together: (a) the sum of the payments of *money (if any) made in settlement of the claim; and (b) the *GST inclusive market value of the supplies (if any) made by the insurer in settlement of the claim (other than supplies that would have been *taxable supplies but for section 78-25). Step 2. If any payments of excess were made to the insurer under the *insurance policy in question, subtract from the step 1 amount the sum of all those payments (except to the extent that they are payments of excess to which section 78-18 applies). Step 3. Multiply the step 1 amount, or (if step 2 applies) the step 2 amount, by the following: [pic] where: extent of input tax credit has the meaning given by subsection (2). 78-18 Increasing adjustments for payments of excess under insurance policies (1) An insurer has an increasing adjustment if: (a) there is a payment of an excess to the insurer under an *insurance policy; and (b) the insurer makes, or has made, payments or supplies in settlement of a claim under the policy; and (c) the insurer makes, or has made, *creditable acquisitions or *creditable importations directly for the purpose of settling the claim. (2) The amount of the increasing adjustment is 1/11 of the amount that represents the extent to which the payment of excess relates to *creditable acquisitions and *creditable importations made by the insurer directly for the purpose of settling the claim. (3) An insurer has an increasing adjustment if: (a) there is a payment of an excess to the insurer under an *insurance policy; and (b) the insurer makes, or has made, *creditable acquisitions or *creditable importations directly for the purpose of settling the claim; and (c) the insurer has not made any payments or supplies in settlement of the claim. The amount of the increasing adjustment is 1/11 of the amount of the payment of the excess. 78-20 Settlements of insurance claims do not give rise to creditable acquisitions (1) If, in settlement of a claim under an *insurance policy, an insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply; the payment or supply is not treated as *consideration for an acquisition made by the insurer. (2) This section has effect despite section 11-5 (which is about what is a creditable acquisition). 78-25 Supplies in settlement of claims are not taxable supplies (1) A supply that an insurer makes in settlement of a claim under an *insurance policy is not a *taxable supply. (2) This section has effect despite section 9-5 (which is about what are taxable supplies). 78-30 Acquisitions by insurers in the course of settling claims under non- taxable policies (1) An acquisition is not a *creditable acquisition if: (a) the insurer makes the acquisition: (i) to the extent that the acquisition is an acquisition of goods- solely for the purpose of supplying the goods in the course of settling a claim under an *insurance policy; or (ii) otherwise-solely for a purpose directly related to settling a particular claim under an *insurance policy; and (b) the supply of the insurance policy by the insurer was *GST- free. (2) This section has effect despite section 11-5 (which is about what is a creditable acquisition). 78-35 Taxable supplies relating to rights of subrogation (1) If, in settlement of a claim made by an insurer in the insurer's exercising of rights of subrogation in respect of an *insurance policy, an entity that is not insured under the policy: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply; the payment or supply is not treated as *consideration for a supply made by the insurer (whether or not the payment or supply is made to the insurer) or by the entity insured. (2) This section has effect despite section 9-15 (which is about consideration). 78-40 Adjustment events relating to decreasing adjustments under this Division (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) 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). 78-42 Adjustment events relating to increasing adjustments under section 78-18 Division 19 applies in relation to an *increasing adjustment that an insurer has under section 78-18 as if: (a) payments of excess under an *insurance policy to which the adjustment relates were *consideration for a *taxable supply that the insurer made; and (b) the adjustment were the GST payable on the taxable supply; and (c) any refund of that payment of excess made by the insurer were a reduction in the consideration for the supply. Subdivision 78-B-Insured entities etc. 78-45 Settlements of insurance claims do not give rise to taxable supplies (1) If, in settlement of a claim under an *insurance policy, an insurer: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply; the payment or supply is not treated as *consideration for a supply made by the entity insured, or by any entity (other than the entity insured) that was entitled to an input tax credit for the premium paid for the insurance policy. (2) This section has effect despite section 9-15 (which is about consideration). 78-50 Settlements of insurance claims give rise to taxable supplies if entitlement to input tax credits is not disclosed (1) However, the payment or supply is treated as *consideration for a supply made by an entity if: (a) the entity paid all or a part of the premium, for the *insurance policy, relating to the period during which the event giving rise to the claim happened; and (b) the entity, or the *representative member of the *GST group of which the entity is a *member, was entitled to an input tax credit for the premium it paid; and (c) the entity: (i) did not, at or before the time a claim was first made under the insurance policy since the last payment of a premium, inform the insurer of the entitlement to an input tax credit for the premium it paid; or (ii) in informing the insurer of the entitlement at or before that time, understated its extent; and (d) the insurance policy was not issued under a *compulsory third party scheme. It does not matter whether that entity is the entity insured, or whether the payment or supply is made to that entity or any other entity. (2) The extent to which the payment or supply is treated as *consideration is the extent of the entitlement, or the extent to which the entitlement was understated, as the case requires. (2A) In working out, for the purposes of subparagraph (1)(c)(ii) or subsection (2), whether an entitlement to an input tax credit has been understated, or the extent of the understatement, disregard sections 131-40 and 131-50 (which are about amounts of input tax credits under the annual apportionment rules). (3) The supply made by the entity is a taxable supply whether or not the entity is *registered, or *required to be registered, at the time of the settlement or at the time of the payment or supply by the insurer. Note: Subdivision 78-D deals with how GST applies to the taxable supply if the insured entity is not registered, or required to be registered. (4) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration). 78-55 Payments of excess under insurance policies are not consideration for supplies (1) The making of any payment by an entity is not treated as *consideration for a supply, to the entity or any other entity, to the extent that the payment is the payment of an excess to the insurer under an *insurance policy. (2) This section has effect despite section 9-15 (which is about consideration). 78-60 Supplies of goods to insurers in the course of settling claims (1) A supply of goods is not a *taxable supply if it is solely a supply made under an *insurance policy to an insurer in the course of settling a claim under the policy. (2) In working out the value of a *taxable supply that is partly a supply of goods made under an *insurance policy to an insurer in the course of settling a claim under the policy, disregard the *consideration to the extent that it relates to the supply of those goods. (3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-75 (which is about the value of taxable supplies). Subdivision 78-C-Third parties 78-65 Payments etc. to third parties by insurers (1) The making of any payment by an insurer to an entity is not treated as *consideration for a supply to the insurer by the entity, to the extent that: (a) the payment is made in settlement of a claim under an *insurance policy under which the entity is not insured; and (b) the payment is to discharge a liability owed to that entity by the entity insured. (2) The making of any supply by an insurer to an entity: (a) is not to be treated as a *taxable supply by the insurer; and (b) is not to be treated as *consideration for a supply to the insurer by the entity, or any other entity; to the extent that: (c) the supply is made in settlement of a claim under an *insurance policy under which the entity is not insured; and (d) the supply is to discharge a liability owed to that entity by the entity insured. (3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration). 78-70 Payments etc. to third parties by insured entities (1) The making of any payment by an entity to another entity is not to be treated as *consideration for a supply to the entity by that other entity, to the extent that: (a) the payment is to discharge a liability of the entity to that other entity; and (b) the payment is covered by a settlement of a claim under an *insurance policy under which the entity was insured against that liability. (2) The making of any supply by an entity to another entity: (a) is not to be treated as a *taxable supply by the entity; and (b) is not to be treated as *consideration for a supply to the entity by that other, or any other, entity; to the extent that: (c) the supply is to discharge a liability of the entity to that other entity; and (d) the supply is covered by a settlement of a claim under an *insurance policy under which the entity was insured against that liability. (3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-15 (which is about consideration). 78-75 Creditable acquisitions relating to rights of subrogation (1) If, in settlement of a claim made by an insurer in the insurer's exercising of rights of subrogation in respect of an *insurance policy, an entity that is not insured under the policy: (a) makes a payment of *money; or (b) makes a supply; or (c) makes both a payment of money and a supply; the payment or supply is not treated as *consideration for an acquisition made by the entity. (2) This section has effect despite section 11-5 (which is about what is a creditable acquisition). Subdivision 78-D-Insured entities that are not registered etc. 78-80 Net amounts (1) If an entity insured under an *insurance policy is not *registered or *required to be registered, it does not have a *net amount under Part 2-4 merely because it makes a *taxable supply under section 78-50. (2) This section does not prevent an *adjustment arising that relates to such a supply, but the entity cannot have a *decreasing adjustment unless it is *registered or *required to be registered. (3) This section has effect despite Division 17 (which is about net amounts and adjustments). 78-85 GST returns (1) If, during a month: (a) an entity makes any *taxable supplies under section 78-50; or (b) an entity has any *increasing adjustments that arise in relation to any such supplies (whether made in that month or a previous month); and the entity is not *registered or *required to be registered during that month, it must give to the Commissioner a *GST return, within 21 days after the end of the month, relating to those supplies it made in that month and those adjustments. (3) This section has effect despite sections 31-5 and 31-10 (which are about giving GST returns). 78-90 Payments of GST (1) If an entity is not *registered or *required to be registered during a particular month, it must pay: (a) amounts of GST on *taxable supplies under section 78-50 that it makes during that month; and (b) amounts of *increasing adjustments that it has that arise, during that month, in relation to supplies that are *taxable supplies under section 78-50; within 21 days after the end of the month, and at the place and in the manner specified by the Commissioner. (2) This section has effect despite Division 33 (which is about payments of GST). Subdivision 78-E-Statutory compensation schemes 78-95 GST on premiums etc. under statutory compensation schemes is exclusive of stamp duty (1) The *value of a *taxable supply of membership of, or participation in, a *statutory compensation scheme is worked out as if the *price of the supply were reduced by the amount of any stamp duty payable under a *State law or *Territory law in respect of the supply. (2) This section has effect despite section 9-75 (which is about the value of taxable supplies). 78-100 Settlements of claims for compensation under statutory compensation schemes (1) This Division applies in relation to a payment or supply made in settlement of a claim for compensation under a *statutory compensation scheme in the same way that it applies to a payment or supply made in settlement of a claim under an *insurance policy. (2) For the purposes of the application of this Division in relation to such a payment or supply: (a) the claim for compensation under the scheme is treated as a claim under an *insurance policy; and (b) the entity operating the scheme is treated as the insurer; and (c) an entity is treated as the entity insured if: (i) the entity's payment of premiums, contributions or similar payments under the scheme, or payment of levy in connection with the scheme; or (ii) the entity's liability to pay premiums, contributions or similar payments under the scheme, or liability to pay levy in connection with the scheme; enabled the claim for compensation to arise; and (ca) those payments that that entity makes or is liable to make are treated as a premium it has paid; and (d) the supply of membership of, or participation in, the scheme is treated as the supply of an *insurance policy. (3) However, if the entity treated as the entity insured: (a) is liable to make payments referred to in paragraph (2)(c); and (b) has not made all those payments; for the purposes of sections 78-10 and 78-15, the entity's entitlement to an input tax credit for the premium paid is taken to be what its entitlement would have been if it had made all those payments. 78-105 Meaning of statutory compensation scheme A statutory compensation scheme is a scheme or arrangement: (a) that is established by an *Australian law; and (b) under which compensation is payable for particular kinds of injury, loss or damage; and (c) that is specified in the regulations, or that is of a kind specified in the regulations; but does not include a *compulsory third party scheme. Note: Divisions 79 and 80 deal with compulsory third party schemes. Subdivision 78-F-Miscellaneous 78-110 Effect of judgments and court orders If: (a) in compliance with a judgment or order of a court relating to: (i) a claim under an *insurance policy; or (ii) a claim by an insurer in exercising rights of subrogation in respect of an insurance policy; or (iii) a claim for compensation under a *statutory compensation scheme; an entity makes a payment of *money, makes a supply, or makes both a payment of money and a supply; and (b) had the payment or supply been made in the absence of such a judgment or order, it would have been a payment or supply made in settlement of the claim; the payment or supply is treated as having been made in settlement of the claim. 78-115 Exclusion of certain Commonwealth, State or Territory insurance schemes This Division (other than sections 78-5 and 78-95) does not apply to an *insurance policy, or to a payment or supply made in settlement of a claim made under an insurance policy, if: (a) the policy was supplied under a scheme for insurance, or a *statutory compensation scheme, established by an *Australian law; and (b) that scheme is of a kind specified in the regulations. 78-118 Portfolio transfers (1) If an insurer (the first insurer) enters into an arrangement, in the nature of a portfolio transfer, with another insurer for the other insurer: (a) to act as the insurer in relation to an *insurance policy; or (b) to meet the first insurer's liabilities arising under an insurance policy; this Division applies, from the time the arrangement takes effect, as if the other insurer were an insurer in relation to the policy. (2) Without limiting subsection (1): (a) anything done after that time by the other insurer that, if it had been done by the first insurer, would have been done under the policy is taken, for the purposes of this Division, to have been done by the other insurer under the policy; and (b) sections 78-10 and 78-30 apply as if the other insurer were the insurer that supplied the policy; and (c) section 78-18 applies as if the insurer that settles the claim referred to in paragraph 78-18(1)(b) or (3)(b) (as the case requires) has the *increasing adjustment under that section, regardless of which insurer was paid the excess to which the adjustment relates. 78-120 HIH rescue package (1) If a payment of *money, a supply or both a payment of money and a supply are received by an entity from an *HIH rescue entity as *consideration for: (a) the entity transferring or surrendering rights under an *insurance policy held with an *HIH company; or (b) the entity transferring or surrendering rights against another entity that is insured under an insurance policy held with an HIH company; or (c) the entity transferring or surrendering rights against another entity in relation to a matter in relation to which the entity also has or had rights under an insurance policy held with an HIH company; this Division (other than sections 78-10, 78-15 and 78-40) applies to the payment or supply as if the HIH rescue entity made the payment or supply as the insurer in settlement of a claim under the insurance policy. (2) In particular: (a) this Division (other than sections 78-10, 78-15 and 78-40, subsection 78-50(1) and this section) applies as if: (i) references to an insurer were references to the *HIH rescue entity; and (ii) references to a claim under an *insurance policy were references to a request or claim to the HIH rescue entity for such a payment or supply; and (iii) references to a settlement of such a claim were references to the agreement to make such a payment or supply as consideration for the transfer or surrender; and (b) sections 78-18, 78-42 and 78-55 apply as if references in those sections to payments of excess to the insurer under the policy were references to payments to the HIH rescue entity corresponding to such payments of excess; and (c) section 78-30 applies as if references in that section to settling a claim were references to providing the consideration for the transfer or surrender; and (d) section 78-100 applies as if references in that section to a claim for compensation under a *statutory compensation scheme were references to a claim made to the HIH rescue entity corresponding to a claim for compensation under the scheme. (3) This section does not affect the operation of sections 78-10, 78-15 and 78-40. Division 79-Compulsory third party schemes 79-1 What this Division is about Operators of compulsory third party schemes have adjustments which enable the net GST on the schemes to reflect correctly their margins after settlements of claims and other payments and supplies under the schemes are taken into account. The normal application of Division 78 to some insurance policy payments and supplies under the schemes is modified (see Subdivision 79-A). That Division is also extended so that it applies in a modified form to payments and supplies connected with, but not under, insurance policies (see Subdivision 79-B). For other settlements, and payments, provisions similar to Division 78 apply (see Subdivision 79-C). Certain adjustments are worked out using an "applicable average input tax credit fraction" (see Subdivision 79- D). Note: Division 80 deals with use of settlement sharing arrangements by the operators of compulsory third party schemes. Table of Subdivisions 79-A Modified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies 79-B Extension of Division 78 to cover certain compulsory third party scheme payments and supplies connected with, but not under, insurance policies 79-C Other payments and supplies under compulsory third party schemes 79-D Compulsory third party scheme decreasing adjustments worked out using applicable average input tax credit fraction Subdivision 79-A-Modified application of Division 78 to certain compulsory third party scheme payments and supplies under insurance policies 79-5 Application of sections 78-10 and 78-15 (about decreasing adjustments) where premium selection test is satisfied (1) This section applies to a payment or supply if: (a) it is a payment or supply made under a *compulsory third party scheme; and (b) the payment or supply is made in settlement of a claim under an *insurance policy; and (c) the *premium selection test is satisfied; and (d) the payment or supply is not a payment or supply to which section 79-15 (about sole operator elections) applies. Premium selection test (2) The premium selection test is satisfied if the amount of the premium or premiums for the policy resulted from: (a) an *operator of the *compulsory third party scheme offering a number of different premium amounts to the entity liable to pay the premium or premiums; and (b) that entity selecting a premium amount: (i) that was offered on the basis that there would be an entitlement to an input tax credit for some or all of the amount; or (ii) that was offered on the basis that there would be no entitlement to an input tax credit for any of the amount. Input tax credit entitlement (3) If subparagraph (2)(b)(i) applies, then, for the purposes of sections 78-10 and 78-15: (a) there is taken to be an entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened; and (b) if the supply of the insurance policy was solely or partly a *taxable supply-the amount of the input tax credit is taken to equal the GST payable by the *operator for the taxable supply. No input tax credit entitlement (4) If subparagraph (2)(b)(ii) applies, then, for the purposes of sections 78-10 and 78-15, there is taken to be no entitlement to an input tax credit for the premium paid in relation to the period during which the event giving rise to the claim happened. 79-10 Adjustment where operator becomes aware that correct input tax credit situation differs from basis on which premium selection test was satisfied Decreasing adjustment (1) If: (a) subsection 79-5(3) applies to a payment or supply; and (b) after the *premium selection test was satisfied, the *operator became or becomes aware that there was actually no entitlement to an input tax credit for any of the amount of the premium or premiums paid in relation to the period during which the event giving rise to the claim happened; and (c) if subsection 79-5(4) had applied, the operator would have been entitled to a *decreasing adjustment (the notional decreasing adjustment); then: (d) the operator has a decreasing adjustment whose amount is, subject to paragraph (e), equal to the notional decreasing adjustment; and (e) if one or more *increasing adjustments (each being a notional section 78-40 increasing adjustment) would have arisen, before the decreasing adjustment under paragraph (d) arose, under Division 19 because of section 78-40 applying in relation to the notional decreasing adjustment, the amount of the decreasing adjustment under paragraph (d) is reduced by the sum of the notional section 78-40 increasing adjustments; and (f) for the purposes of applying section 78-40 after the decreasing adjustment arises under this subsection, that decreasing adjustment is taken to arise under Division 78. Increasing adjustment (2) If: (a) subsection 79-5(4) applies to a payment or supply; and (b) as a result, the *operator has a *decreasing adjustment (the original decreasing adjustment); and (c) after the *premium selection test was satisfied, the operator became or becomes aware that there actually was an entitlement to an input tax credit for some or all of the amount of the premium or premiums paid in relation to the period during which the event giving rise to the claim happened; then: (d) the operator has an increasing adjustment whose amount is, subject to paragraph (e), equal to the original decreasing adjustment; and (e) if one or more *increasing adjustments (each being a section 78- 40 increasing adjustment) arose, before the increasing adjustment under paragraph (d) arose, under Division 19 because of section 78-40 applying in relation to the original decreasing adjustment, the amount of the increasing adjustment under paragraph (d) is reduced by the sum of the section 78-40 increasing adjustments; and (f) after the increasing adjustment arises under paragraph (d), no adjustment arises under Division 19 because of section 78-40 applying in relation to the original decreasing adjustment. 79-15 Application of sections 78-10 and 78-15 (about decreasing adjustments) where sole operator election to use average input tax credit entitlement (1) This section applies to a payment or supply if: (a) it is a payment or supply made under a *compulsory third party scheme; and (b) the payment or supply is made in settlement of a claim under an *insurance policy; and (c) there is only one *operator who issues insurance policies under the scheme; and (d) assuming the requirements of paragraph 78-10(2)(b) were satisfied, the operator would have a *decreasing adjustment under section 78-10 in respect of the payment or supply; and (e) an election under subsection (4) is in force during the *financial year in which the payment or supply is made. (2) For the purposes of section 78-10, the *operator has a *decreasing adjustment under that section in relation to the payment or supply. (3) Section 78-15 does not apply to the *decreasing adjustment, but its amount is instead worked out using the applicable *average input tax credit fraction (see section 79-95). (4) The *operator may, in writing, elect that, from the start of a specified *financial year, any *decreasing adjustment in relation to all payments or supplies: (a) that are made during the financial year; and (b) to which paragraphs (1)(a), (b), (c) and (d) apply; are to be worked out using the applicable *average input tax credit fraction. (5) Subject to subsection (6), the election must be made before the start of the specified *financial year. (6) Subsection (5) does not apply if the election specifies the *financial year beginning on 1 July 2003 and is made before the end of 30 days after the day on which this section commences. (7) The election is in force during the specified *financial year and every later financial year, other than one that begins after a financial year in which the election is revoked. 79-20 Extension of various references in Division 78 to rights of subrogation to cover other rights of recovery Payments or supplies in settlement of claims (1) For the purposes of sections 78-35, 78-40 and 78-75, a reference in those sections to a payment or supply made by an entity in settlement of a claim by an insurer in exercising the insurer's rights of subrogation in respect of an *insurance policy includes a reference to a payment or supply that satisfies the following requirements: (a) the payment or supply is made by an entity in settlement of a claim by an *operator of a *compulsory third party scheme; (b) the claim was made by the operator in exercise of the operator's rights to recover in respect of a payment or supply made under the compulsory third party scheme; (c) the claim was not made under an *insurance policy that is a policy of reinsurance. Payments or supplies in compliance with court judgments etc. relating to claims (2) For the purposes of section 78-110, a reference in that section to a payment or supply made by an entity in compliance with a judgment or order of a court relating to a claim made by an insurer in exercising the insurer's rights of subrogation in respect of an *insurance policy includes a reference to a payment or supply that satisfies the following requirements: (a) the payment or supply is made by an entity in compliance with a judgment or order of a court relating to a claim made by an *operator of a *compulsory third party scheme; (b) the claim was made by the *operator in exercise of the operator's rights to recover a payment or supply made under the *compulsory third party scheme; (c) the claim was not made under an insurance policy that is a policy of reinsurance. Subdivision 79-B-Extension of Division 78 to cover certain compulsory third party scheme payments and supplies connected with, but not under, insurance policies 79-25 Meaning of CTP hybrid payment or supply (1) Subject to this section, a payment or supply is a CTP hybrid payment or supply if: (a) it is made in settlement of a claim for compensation under a *compulsory third party scheme; and (b) the claim would not have been made but for an *insurance policy issued under the scheme; and (c) the claim was not made under the insurance policy. (2) A payment or supply is not a CTP hybrid payment or supply if: (a) when the payment or supply is made, the entity that paid the premium for the *insurance policy cannot be located; and (b) that entity did not, at or before the time the *operator making the payment or supply was first made aware of the circumstances to which the payment or supply relates, inform the operator of the entitlement to an input tax credit for the CTP premium it paid; and (c) the *premium selection test was not satisfied in relation to the insurance policy. (2A) Subsection (2) does not apply if the cover under the *insurance policy commenced before 1 July 2003 (whether or not all or part of the premium on the policy was paid before that day). (3) A payment or supply is not a CTP hybrid payment or supply if the *operator making the payment or supply was required to do so by law because of the bankruptcy or insolvency of another operator who is an insurer. 79-30 Application of Division 78 (1) Division 78 (other than section 78-100), as modified by Subdivision 79-A, applies in relation to a *CTP hybrid payment or supply as if it were a payment or supply made in settlement of a claim under the *insurance policy mentioned in paragraph 79- 25(1)(b). (2) This section does not prevent Division 78 applying to a payment or supply under a *compulsory third party scheme if the payment or supply is made in settlement of a claim under an *insurance policy. Subdivision 79-C-Other payments and supplies under compulsory third party schemes 79-35 Meaning of CTP compensation or ancillary payment or supply etc. Meaning of CTP compensation or ancillary payment or supply (1) A payment or supply is a CTP compensation or ancillary payment or supply if it is a *CTP compensation payment or supply or a *CTP ancillary payment or supply. Meaning of CTP compensation payment or supply (2) A payment or supply is a CTP compensation payment or supply if (a) it is a payment or supply made under a *compulsory third party scheme; and (b) it is a payment or supply made in settlement of a claim for compensation under the scheme; and (c) it is not the case that the *operator making the payment or supply was required to do so by law because of the bankruptcy or insolvency of another operator who is an insurer; and (d) Division 78 does not apply in relation to the payment or supply; and (e) the payment or supply is not a *CTP dual premium or election payment or supply or a *CTP hybrid payment or supply. Meaning of CTP ancillary payment or supply (3) A payment or supply is a CTP ancillary payment or supply if: (a) the payment or supply is made under a *compulsory third party scheme; and (b) the payment or supply is of a kind specified in the regulations; and (c) it is not the case that the *operator making the payment or supply was required to do so by law because of the bankruptcy or insolvency of another operator who is an insurer; and (d) Division 78 does not apply in relation to the payment or supply; and (e) the payment or supply is not a*CTP dual premium or election payment or supply or a *CTP hybrid payment or supply; and (f) the payment or supply is not made in settlement of a claim for compensation under the scheme; and (g) the payment or supply is not *consideration for a *creditable acquisition. 79-40 GST on CTP premiums is exclusive of stamp duty (1) The *value of a *taxable supply for which the *consideration includes an amount of *CTP premium is worked out as if the *price of the supply were reduced by the amount of any stamp duty payable under a *State law or *Territory law in respect of the supply. (2) This section has effect despite section 9-75 (which is about the value of taxable supplies). 79-45 Exclusion of certain compulsory third party schemes This Subdivision (other than section 79-40) does not apply to a *compulsory third party scheme under which *CTP compensation or ancillary payments or supplies are made, or to a *CTP compensation or ancillary payment or supply, if the compulsory third party scheme is of a kind specified in the regulations. 79-50 Decreasing adjustments for CTP compensation or ancillary payments or supplies (1) An *operator of a *compulsory third party scheme has a decreasing adjustment if the operator makes a *CTP compensation or ancillary payment or supply under the scheme. (2) However, this section only applies if: (a) the payments of *CTP premium to the *operator that have been or are required to be made under the scheme are, or would be, *consideration for a *taxable supply; and (b) the *operator is *registered or *required to be registered. (3) The *decreasing adjustment in relation to the payment or supply is worked out using the applicable *average input tax credit fraction (see section 79-95). 79-55 Increasing adjustments for payments of excess etc. under compulsory third party schemes (1) An *operator of a *compulsory third party scheme has an increasing adjustment if: (a) there is a payment of an excess to the operator under the scheme; and (b) the payment relates to a *CTP compensation payment or supply that the operator makes or has made; and (c) the operator makes, or has made, *creditable acquisitions or *creditable importations directly for the purpose of making the CTP compensation payment or supply. (2) The amount of the increasing adjustment is 1/11 of the amount that represents the extent to which the payment of excess relates to *creditable acquisitions or *creditable importations made by the *operator directly for the purpose of making the *CTP compensation payment or supply. (3) An *operator of a *compulsory third party scheme has an increasing adjustment if: (a) there is a payment of an excess to the operator under the scheme; and (b) the operator makes, or has made, *creditable acquisitions or *creditable importations directly for the purpose of making a *CTP compensation payment or supply to which the payment of excess would relate; and (c) the operator has not made any CTP compensation payment or supply to which the payment of excess relates. The amount of the increasing adjustment is 1/11 of the amount of the payment of excess. 79-60 Effect of settlements and payments under compulsory third party schemes (1) If an *operator of a *compulsory third party scheme makes a payment under the scheme, it is not treated as *consideration: (a) for an acquisition made by the operator; or (b) for a supply made to the operator by the entity to whom the payment was made; to the extent that the payment is a *CTP compensation or ancillary payment or supply. (2) If an *operator of a *compulsory third party scheme makes a supply under the scheme: (a) it is not a *taxable supply; and (b) it is not treated as *consideration for an acquisition made by the operator; and (c) it is not treated as *consideration for a supply made to the operator by the entity to whom the supply was made; to the extent that the supply is a *CTP compensation or ancillary payment or supply. (3) This section has effect despite section 9-5 (which is about what are taxable supplies), section 9-15 (which is about consideration) and section 11-5 (which is about what is a creditable acquisition). 79-65 Taxable supplies relating to recovery by operators of compulsory third party schemes (1) If: (a) an *operator of a *compulsory third party scheme has made a claim in relation to a *CTP compensation or ancillary payment or supply; and (b) the operator's claim is made in exercising rights to recover in respect of that payment or supply; and (c) an entity: (i) makes a payment of *money; or (ii) makes a supply; or (iii) makes both a payment of money and a supply; in settlement of the operator's claim; the payment or supply mentioned in paragraph (c) is not treated as *consideration for a supply made by the operator (whether or not the payment or supply is made to the operator), or for an acquisition made by the entity making the payment or supply (or payment and supply). (2) This section has effect despite section 9-15 (which is about consideration) and section 11-5 (which is about what is a creditable acquisition). 79-70 Adjustment events relating to decreasing adjustments for operators of compulsory third party schemes (1) Division 19 applies in relation to a *decreasing adjustment that an *operator of a *compulsory third party scheme has under section 79-50 as if: (a) the adjustment were an input tax credit; and (b) either: (i) if the adjustment relates to a *CTP compensation payment or supply-the settlement of the claim to which the adjustment relates were a *creditable acquisition that the operator made; or (ii) if the adjustment relates to a *CTP ancillary payment or supply- the operator had made a creditable acquisition for which the payment or supply was the *consideration; and (c) any payment or supply made by another entity, in settlement of a claim made by the operator in exercising rights to recover from the other entity in respect of the settlement mentioned in subparagraph (b)(i) or the payment or supply mentioned in subparagraph (b)(ii), were a reduction in the consideration for the acquisition. (2) 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). (3) This section does not apply in relation to a payment or supply that the operator receives in settlement of a claim under an *insurance policy that the operator entered into, as the entity insured, in relation to any liability to make a *CTP compensation or ancillary payment or supply. 79-75 Adjustment events relating to increasing adjustments under section 79-55 Division 19 applies in relation to an *increasing adjustment that an *operator of a *compulsory third party scheme has under section 79-55 as if: (a) payments of excess to which the adjustment relates were *consideration for a *taxable supply that the operator made; and (b) the adjustment were the GST payable on the taxable supply; and (c) any refunds made by the operator of any of those payments of excess were reductions in the consideration for the supply. 79-80 Payments of excess under compulsory third party schemes are not consideration for supplies (1) The making of any payment by an entity is not treated as *consideration for a supply, to the entity or any other entity, to the extent that the payment is the payment of an excess to an *operator of a *compulsory third party scheme. (2) This section has effect despite section 9-15 (which is about consideration). 79-85 Supplies of goods to operators in the course of settling claims (1) A supply of goods is not a *taxable supply if it is solely a supply made under a *compulsory third party scheme to an *operator of the scheme in the course of settling a claim for compensation made under the scheme. (2) In working out the value of a *taxable supply that is partly a supply of goods made under a *compulsory third party scheme to an *operator of the scheme in the course of settling a claim for compensation made under the scheme, disregard the *consideration to the extent that it relates to the supply of those goods. (3) This section has effect despite section 9-5 (which is about what are taxable supplies) and section 9-75 (which is about the value of taxable supplies). 79-90 Effect of judgments and court orders (1) If: (a) in compliance with a judgment or order of a court relating to a claim for compensation under a *compulsory third party scheme, an entity makes a payment of *money, makes a supply, or makes both a payment of money and a supply; and (b) had the payment or supply been made in the absence of such a judgment or order, it would have been a *CTP compensation payment or supply or a CTP ancillary payment or supply; the payment or supply is treated as having been a CTP compensation payment or supply or a CTP ancillary payment or supply. (2) If: (a) in compliance with a judgment or order of a court relating to a claim by an *operator of a compulsory third party scheme exercising rights to recover from another entity in respect of a settlement made under the scheme, an entity makes a payment of *money, makes a supply, or makes both a payment of money and a supply; and (b) had the payment or supply been made in the absence of such a judgment or order, it would have been a settlement of a claim made in exercising rights to recover from another entity in respect of a settlement made under the scheme; the payment or supply is treated as having been made in settlement of the operator's claim made in exercising those rights. Subdivision 79-D-Compulsory third party scheme decreasing adjustments worked out using applicable average input tax credit fraction 79-95 How to work out decreasing adjustments using the applicable average input tax credit fraction (1) If an *operator of a *compulsory third party scheme has a *decreasing adjustment in relation to a payment or supply that is to be worked out using the applicable *average input tax credit fraction, the amount of the *decreasing adjustment is as follows. (2) The amount is worked out using the formula: [pic] where: applicable average input tax credit fraction is the *average input tax credit fraction for the *compulsory third party scheme concerned for the *financial year in which: (a) if the payment or supply is a *CTP compensation payment or supply-the accident or other incident to which the claim relates happened; or (b) if the payment or supply is a *CTP ancillary payment or supply- the payment or supply was made; or (c) if the payment or supply is a payment or supply to which section 79-15 applies-the accident or other incident to which the claim relates happened. payment or supply amount is the amount worked out in accordance with subsection (3). Payment or supply amount (3) The payment or supply amount mentioned in subsection (2) is worked out using this method statement. Method statement Step 1. Add together: (a) the sum of the payments of *money (if any) that are included in the payment or supply; and (b) the *GST inclusive market value of the supplies (if any) made by the *operator that are included in the payment or supply (other than supplies that would have been *taxable supplies but for section 78-25 or 79-60). Step 2. If, in relation to the payment or supply, any payments of an excess were made to the *operator, subtract from the step 1 amount the sum of all those payments (except to the extent that they are payments of excess to which section 78-18 or 79-55 applies). Step 3. Except where the payment or supply is a *CTP ancillary payment or supply, multiply the step 1 amount, or (if step 2 applies) the step 2 amount, by the following: [pic] where: applicable average input tax credit fraction has the meaning given by subsection (2). Reduction for non-creditable insurance events (4) The amount of the *decreasing adjustment under subsection (1) is reduced to the extent (if any) that the payment or supply relates to one or more *non-creditable insurance events. 79-100 Meaning of average input tax credit fraction (1) Except where subsection (7) applies, the average input tax credit fraction for a *compulsory third party scheme for a *financial year is: (a) for the financial year beginning on 1 July 2000, 1 July 2001 or 1 July 2002-nil; and (b) for the financial year beginning on 1 July 2003, 1 July 2004, 1 July 2005 or 1 July 2006-the business vehicle use fraction for the scheme determined by the Treasurer under subsection (2); and (c) for any later financial year: (i) if subparagraph (ii) does not apply-the same fraction as the average input tax credit fraction for the scheme for the preceding financial year; or (ii) if, under subsection (3), the Treasurer determines the average input tax credit fraction for the scheme for the financial year-that fraction. Treasurer to determine business vehicle use fraction for 2003-4 to 2006-7 financial years using statistical information (2) As soon as practicable after the commencement of this section, the Treasurer must, in writing, determine the business vehicle use fraction (see subsection (4)) for each *compulsory third party scheme, using statistical information that: (a) relates to business and total use of vehicles in the State or Territory in which the scheme operates; and (b) was published on 27 June 2001 by the Australian Bureau of Statistics in respect of the period 1 November 1999 to 31 October 2000. Treasurer to use later statistical information to determine whether average input tax credit fraction to be varied for later financial years (3) As soon as practicable after the beginning of each of the following *financial years (a determination year): (a) the financial year that begins on 1 July 2006; (b) the financial years that begin on each 1 July that occurs 3 years, or a multiple of 3 years, after 1 July 2006; the Treasurer must, for each *compulsory third party scheme: (c) work out business vehicle use fractions (see subsection (4)) using each set of statistical information, relating to business and total use of vehicles in the State or Territory in which the scheme operates, published by the Australian Bureau of Statistics during the 3 financial years before the determination year; and (d) work out the average of those fractions (the new fraction); and (e) if the Treasurer considers the new fraction is significantly different from the average input tax credit fraction that would, disregarding this subsection, apply under subparagraph (1)(c)(i) for the scheme for the financial year (the operative year) following the determination year-in writing, determine that the new fraction is to be the average input tax credit fraction for the scheme for the operative year. Business vehicle use fraction (4) The business vehicle use fraction is the fraction of total vehicle use, in the State or Territory in which the *compulsory third party scheme operates, represented by business vehicle use. Publication of revised statistical information (5) To avoid doubt, if, after publishing statistical information relating to business and total use of vehicles in a State or Territory, the Australian Bureau of Statistics publishes a revised or replacement version of that statistical information, that revision or replacement is to be disregarded for the purposes of this section. Gazettal of determinations (6) The Treasurer must arrange for a copy of any determination that he or she makes under subsection (2) or (3) to be published in the Gazette. Exception (7) If: (a) this section is being applied in working out the amount of a *decreasing adjustment that arises under section 79-15 (about sole operator elections); and (b) the cover under the *insurance policy concerned commenced before 1 July 2003; the average input tax credit fraction for the *compulsory third party scheme concerned is nil for all *financial years beginning on or after 1 July 2000. Division 80-Settlement sharing arrangements 80-1 What this Division is about A series of adjustments arise if, under an arrangement, an operator of a compulsory third party scheme settles a claim, arising from one or more accidents or other incidents, covered by the arrangement and other operators are obliged to contribute payments to that operator in respect of the settlement. Table of Subdivisions 80-A Insurance policy settlement sharing arrangements 80-B Nominal defendant settlement sharing arrangements 80-C Hybrid settlement sharing arrangements Subdivision 80-A-Insurance policy settlement sharing arrangements 80-5 Meaning of insurance policy settlement sharing arrangement etc. Meaning of insurance policy settlement sharing arrangement (1) An insurance policy settlement sharing arrangement is an arrangement: (a) that relates to an accident or other incident or 2 or more related accidents or other incidents; and (b) to which the parties are the *operators of a *compulsory third party scheme or schemes who have issued *insurance policies to persons involved in the accidents or incidents; and (c) under which: (i) one party (the managing operator) is to make one or more payments or supplies in settlement of a claim, under the compulsory third party scheme or one of the compulsory third party schemes, relating to the accidents or incidents; and (ii) each other party (a contributing operator) is to make a payment to the *managing operator in respect of that operator settling the claim. Meaning of managing operator's payment or supply (2) If a payment or supply mentioned in subparagraph (1)(c)(i) is not a *CTP ancillary payment or supply, it is a managing operator's payment or supply. Meaning of contributing operator's payment (3) A payment mentioned in subparagraph (1)(c)(ii), to the extent that it is not a fee to the *managing operator for managing the process of making settlements under the arrangement, is a contributing operator's payment. 80-10 Effect of becoming parties to industry deeds or entering into settlement sharing arrangements (1) An *operator of a *compulsory third party scheme does not make a *taxable supply by: (a) entering into, or becoming a party to, an *insurance policy settlement sharing arrangement; or (b) becoming a party to a deed created by or under a *State law or a *Territory law establishing a *compulsory third party scheme, that provides for an insurance policy settlement sharing arrangement. (2) This section has effect despite section 9-5 (which is about what are taxable supplies). 80-15 Effect of contributing operator's payment (1) A *contributing operator's payment is not treated as *consideration for a supply by the *managing operator, or for an acquisition by the *contributing operator. (2) This section has effect despite section 9-15 (which is about consideration) and section 11-5 (which is about what is a creditable acquisition). 80-20 Managing operator's payments or supplies (1) For the purposes of Divisions 78 and 79, a *managing operator's payment or supply is treated as follows. (2) If the *managing operator is a party to the *insurance policy settlement sharing arrangement because it issued only one *insurance policy, the *managing operator's payment or supply is treated as a payment or supply, made by the managing operator, in settlement of a claim relating to the accidents or incidents, under that insurance policy. (3) If the *managing operator is a party to the *insurance policy settlement sharing arrangement because it issued 2 or more *insurance policies, the *managing operator's payment or supply is treated as a payment or supply made by the managing operator, in settlement of a claim relating to the accidents or incidents, under the insurance policies, and for that purpose is divided among the policies in equal proportions. Example: 3 vehicles are involved in an accident, 2 of which are covered by insurance policies issued by the managing operator and the other by a policy issued by a contributing operator. The managing operator makes a payment in settlement of a claim by an insured person in respect of the accident. For the purposes of Division 78 or 79, half of the payment will be treated as being made under each of the policies issued by the managing operator. 80-25 Contributing operator's payment (1) For the purposes of Divisions 78 and 79, a *contributing operator's payment is treated as follows. (2) If the *contributing operator is a party to the *insurance policy settlement sharing arrangement because it issued only one *insurance policy, the *contributing operator's payment is treated as a payment or supply, made by the contributing operator, in settlement of a claim relating to the accidents or incidents, under that insurance policy. Example: Assume the same facts as in the example in section 80-20. The contributing operator who issued 1 of the 3 policies covering the vehicles in the accident makes a payment to the managing operator. For the purposes of Division 78 or 79, the payment (except to the extent that it represents a managing operator's fee) will be treated as being made by the contributing operator under the insurance policy that it issued. (3) If the *contributing operator is a party to the *insurance policy settlement sharing arrangement because it issued 2 or more *insurance policies, the *contributing operator's payment is treated as a payment or supply, made by the contributing operator, in settlement of a claim relating to the accidents or incidents, under the insurance policies, and for that purpose is divided among the policies in equal proportions. 80-30 Managing operator's increasing adjustment where contributing operator's payment (1) If: (a) a *contributing operator's payment is made; and (b) as a result of section 80-20, there was a *decreasing adjustment for the *managing operator under Division 78 or 79 in relation to the *managing operator's payment or supply; there is an increasing adjustment for the managing operator of the following amount: [pic] Managing operator's settlement amount (2) The managing operator's settlement amount mentioned in subsection (1) is worked out using this method statement. Method statement Step 1. Add together: (a) the sum of the payments of *money (if any) that are included in the *managing operator's payment or supply; and (b) the *GST inclusive market value of the supplies (if any) that are included in the *managing operator's payment or supply (other than supplies that would have been *taxable supplies but for section 78-25 or 79-60). Step 2. If, in relation to the *managing operator's payment or supply, any payments of an excess were made to the *managing operator, subtract from the step 1 amount the sum of all those payments (except to the extent that they are payments of excess to which section 78-18 or 79-55 applies). Example: Assume the same facts as in the examples in sections 80-20 and 80-25. Assume also that, as a result of section 80-20, there was a decreasing adjustment under Division 78 or 79 for the managing operator's payment or supply. The managing operator has an increasing adjustment. It equals the part of the decreasing adjustment that is attributable to the managing operator's payment or supply that was repaid by the contributing operator's contribution. 80-35 Adjustment events relating to managing operator's payment or supply Division 19 applies in relation to an *increasing adjustment that the *managing operator has under section 80-30 as a result of the making of a *managing operator's payment or supply as if: (a) the *contributing operator's payment were *consideration for a *taxable supply made by the managing operator; and (b) the adjustment were the GST payable on the taxable supply; and (c) any changes made to those payments were a change in the consideration for the supply. Subdivision 80-B-Nominal defendant settlement sharing arrangements 80-40 Meaning of nominal defendant settlement sharing arrangement etc. Meaning of nominal defendant settlement sharing arrangement (1) A nominal defendant settlement sharing arrangement is an arrangement: (a) that relates to an accident or other incident or 2 or more related accidents or other incidents; and (b) to which the parties are *operators of a *compulsory third party scheme, where they are parties because the person involved in the accidents or incidents was not covered under an *insurance policy; and (c) under which: (i) one party (the managing operator) is to make one or more payments or supplies in settlement of a claim, under the compulsory third party scheme, relating to the accidents or incidents; and (ii) the other party, or one or more of the other parties, (each being a contributing operator) is to make a payment to the *managing operator in respect of that operator settling the claim. Meaning of managing operator's payment or supply (2) If a payment or supply mentioned in subparagraph (1)(c)(i) is not a *CTP ancillary payment or supply, it is a managing operator's payment or supply. Meaning of contributing operator's payment (3) A payment mentioned in subparagraph (1)(c)(ii), to the extent that it is not a fee to the *