Commonwealth Consolidated Acts

A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 131.55

  (1)   You have an increasing adjustment if:

  (a)   an acquisition or importation that you made was * partly creditable; and

  (b)   the input tax credit on the acquisition or importation is attributable to a tax period ending in a particular * financial year; and

  (c)   the amount of the input tax credit is an amount worked out under this Division.

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

  (a)   the amount of the input tax credit worked out under this Division; and

  (b)   what would have been the amount of the input tax credit if this Division did not apply.

  (3)   In working out for the purposes of paragraph   (2)(a) the amount of an input tax credit, take into account any change of circumstances that has given rise to:

  (a)   an adjustment for the acquisition under Division   19; or

  (b)   an adjustment for the acquisition under Division   21; or

  (c)   an adjustment for the acquisition under Division   134.

Note:   Because of subsection   136 - 10(3), the amount of the Division   21 adjustment will not be reduced under Division   136.

  (4)   In working out for the purposes of paragraph   (2)(b) what would have been the amount of an input tax credit, take into account any change of circumstances that has given rise to:

  (a)   an adjustment for the acquisition under Division   19 (worked out as if this Division had not applied to working out the amount of the input tax credit); or

  (b)   an adjustment for the acquisition under Division   21; or

  (c)   an adjustment for the acquisition under Division   134.

Note:   If this Division did not apply, the amount of the Division   21 adjustment would have been worked out under Division   136.

Example:   While an annual apportionment election has effect, you make a partly creditable acquisition for $1,100, for which you have an input tax credit of $100. The extent of your creditable purpose is 10%.

  During later tax periods, the price increases by $110, for which you have a decreasing adjustment under Division   19 of $10, and the supplier writes off $660 as a bad debt, for which you have an increasing adjustment under Division   21 of $60 (subsection   136 - 10(3) prevents the amount from being reduced under Division   136).

  The amount of your increasing adjustment under this section is $45. This is the difference between the amounts under paragraphs   (2)(a) and (b).

  The paragraph   (2)(a) amount (which is effectively worked out on a fully creditable basis) is:

  The paragraph   (2)(b) amount (which is based on a 10% creditable purpose) is: