TABL5551 - PowerPoint slides - Week 11 - GST.ppt

Taj subsequently changes their mind and decides to

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Taj subsequently changes their mind and decides to use the cloth only 60% for business purposes. Taj must decrease their ITC claim down to $120 (60% x $200) As a result, Taj’s GST liability will increase by $40. TABL5551 - RHW adapted - Week 11 - GST 28
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Determining the amount of GST Payable GST Act s9-70 : GST is imposed at 10% of the value of the taxable supply Value of taxable supply GST Act s 9-75 = price x 10/11 Example: Price $22,000 Value = $22,000 x 10/11 = $20,000 GST payable = $20,000 x 10% = $2,000 (or – price x 1/11) The legislation assumes that GST is included in the sale price TABL5551 - RHW adapted - Week 11 - GST 29
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GST Adjustments [ATL 1593] Where the amount of GST paid changes, an appropriate adjustment will need to be made Increasing adjustments: E.g. where the consideration paid increases or ITCs decrease: Example: Tom pays Fred $1,000 for a business computer. Subsequently they realise the correct price was $1,500, so Tom pays Fred a further $500 Tom will need to adjust their ITCs upwards (reducing their GST), and Tom will need to adjust the consideration received upwards (increasing the GST payable) TABL5551 - RHW adapted - Week 11 - GST 30
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Decreasing adjustments: Examples Cancellation of supply or acquisition Changes to consideration Bad debt write offs Supply becomes or stops being taxable Acquisition becomes or stops being creditable Example [ATL 1594] : Sam pays Nico $22,000 for services, and Nico remits $2,000 GST to the ATO. Sam later complains about the cost of the services, and Nice refunds $5,500. Nico must make a decreasing adjustment of 1/11 th x $5,500 ($500) which reduces their GST payable, and Sam must make an increasing adjustment to reduce their ITC credits by $500, which increases their GST. TABL5551 - RHW adapted - Week 11 - GST 31
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Input taxation: (1) Residential premises [ATL 1616-1621] Input taxed - residential premises [ATL 1617-1621] New residential premises (eg sales by developer): see ATL 1619: normal GST (but note new requirement for payment of GST amount on settlement) Commercial residential premises: normal GST Vacant land: normal GST Long term commercial 50% reduction in GST rate or can choose input taxed Sale or long-term lease of existing residential premises: input taxed Short-term lease etc of residential premises: input taxed if s 40-35 satisfied; TABL5551 - RHW adapted - Week 11 - GST 32
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Input taxation (2): Financial Supplies Definition of financial supply: Reg 40-5.09 Provision, acquisition or disposal of an interest in specified items (slide 26) For consideration In the course of or in furtherance of an enterprise Connected with Australia Supplier must be a financial services provider (must have owned the interest or created it in making the supply) TABL5551 - RHW adapted - Week 11 - GST 33
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Financial Supplies: Examples of financial supplies: Reg 40- 5.11 * Bank accounts * ATM, electronic & telephone banking * Borrowing and lending, credit card facilities * Mortgages and charges over land or other assets * Interests in certain superannuation funds, annuities & insurance policies * Interests in Australian and foreign currency * Securities and Derivatives TABL5551 - RHW adapted - Week 11 - GST 34
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