7 (Goods and Services Tax)[1]

Where acquisition is only partly creditable full

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Where acquisition is only partly creditable:                                           Full input tax credit Extent of creditable purpose Input tax credit Input tax credit GST payable on the importation = = X
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Foundations of Taxation Law [¶7.10](a) © CCH Australia Limited Accounting for GST & input tax  Accounting for GST & input tax  credits credits Entities attribute GST and input tax credits to “tax  periods” under either: Cash basis, or Accruals basis Method to be used depends on “GST turnover”
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Foundations of Taxation Law [¶7.10](b) © CCH Australia Limited Cash or accruals basis Cash or accruals basis Cash basis generally applies to small business  entities and entities with GST turnovers that do not  exceed “the accounting turnover threshold” ($2m) Cash basis entities attribute GST and input tax  credits to the extent that consideration is received or  paid during a tax period Accruals basis entities attribute GST and input tax  credits to the tax period in which any of the  consideration for the supply is received or an invoice  is issued
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Foundations of Taxation Law [¶7.10](c) © CCH Australia Limited Special accounting rules Special accounting rules Special accounting rules apply to:  Progressive and periodic supplies and acquisitions Deposits held as security
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Foundations of Taxation Law [¶7.11] © CCH Australia Limited Increasing and decreasing  Increasing and decreasing  adjustments adjustments Adjustments affect an entity’s “net amount” for a tax  period Attributable to the period in which the entity becomes  aware of the adjustment Adjustments arise where: An “adjustment event” occurs A bad debt is written off or is overdue for 12  months or more The extent of creditable purpose in relation to the  acquisition or importation has changed
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Foundations of Taxation Law [¶7.12] © CCH Australia Limited GST reporting & payment GST reporting & payment Entities must report GST for a tax period on their  Business Activity Statements GST on taxable importations is paid directly to  Customs unless “deferral arrangements” approved GST is payable monthly or quarterly Special rules for GST instalment payers Compulsory to pay electronically if “GST turnover”  meets the “electronic lodgment turnover threshold”  ($20m)
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Foundations of Taxation Law [¶7.13] © CCH Australia Limited GST invoices, adjustment notes &  GST invoices, adjustment notes &  records records Tax invoices and adjustment notes are required to  claim input tax credits and decreasing adjustments Tax invoices and adjustment notes must be issued  within 28 days of request in the approved form Tax invoices do not need to be issued where “value” 
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