A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 134.5 Decreasing adjustments for payments made to third parties

A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 134.5

  (1)   You have a decreasing adjustment if:

  (a)   you make a payment to an entity (the payee ) that acquires a thing that you supplied to another entity (whether or not that other entity supplies the thing to the payee); and

  (b)   your supply of the thing to the other entity:

  (i)   was a * taxable supply; or

  (ii)   would have been a taxable supply but for a reason to which subsection   (3) applies; and

  (c)   the payment is in one or more of the following forms:

  (i)   a payment of * money or * digital currency;

  (ii)   an offset of an amount of money or digital currency that the payee owes to you;

  (iii)   a crediting of an amount of money or digital currency to an account that the payee holds; and

  (d)   the payment is made in connection with, in response to or for the inducement of the payee's acquisition of the thing; and

  (e)   the payment is not * consideration for a supply to you.

  (1A)   However, subsection   (1) does not apply if:

  (a)   the supply of the thing to the payee is a * GST - free supply, or is not * connected with the indirect tax zone; or

  (b)   the Commissioner is required to make a payment to the payee, under Division   168 (about the tourist refund scheme), related to the payee's acquisition of the thing;

and you know, or have reasonable grounds to suspect, that the supply of the thing to the payee is a GST - free supply or is not connected with the indirect tax zone, or that the Commissioner is so required.

  (2)   The amount of the * decreasing adjustment is an amount equal to the difference between:

  (a)   either:

  (i)   if your supply to the other entity was a * taxable supply--the amount of GST payable on the supply; or

  (ii)   if your supply to the other entity would have been a taxable supply but for a reason to which subsection   (3) applies--the amount of GST that would have been payable on the supply had it been a taxable supply;

    taking into account any other * adjustments that arose, or would have arisen, relating to the supply; and

  (b)   the amount of GST that would have been payable, or would (but for a reason to which subsection   (3) applies) have been payable, for that supply:

  (i)   if the * consideration for the supply had been reduced by the amount of your payment to the payee; and

  (ii)   taking into account any other adjustments that arose, or would have arisen, relating to the supply, as they would have been affected (if applicable) by such a reduction in the consideration.

  (3)   This subsection applies to the following reasons why your supply of the thing to the other entity was not a * taxable supply:

  (a)   you and the other entity are * members of the same * GST group;

  (b)   you and the other entity are members of the same * GST religious group;

  (c)   you are the * joint venture operator for a * GST joint venture, and the other entity is a * participant in the GST joint venture.

  (4)   However:

  (a)   paragraph   (3)(a) does not apply if you and the payee are * members of the same * GST group when the payment referred to in paragraph   (1)(a) is made; and

  (b)   paragraph   (3)(b) does not apply if you and the payee are members of the same * GST religious group when that payment is made.