A New Tax System (Goods and Services Tax) Act 1999

A taxable supply requires consideration, connection with the indirect tax zone, enterprise connection and registration (or requirement to register) (s 9-5). Supplies include goods, services, real property, rights, financial supplies and obligations (s 9-10). Consideration encompasses payments, acts or forbearances (s 9-15). An enterprise covers business activities, adventures in the nature of trade, leases, government activities and certain charity or trustee activities, but excludes employee activities, hobbies and non-profit pursuits without reasonable profit expectation (s 9-20). Connection rules distinguish goods, real property and other things (s 9-25), with specific exclusions for certain offshore supplies by non-residents (s 9-26). Value is generally price × 10/11 (s 9-75(1)), with special rules for luxury cars, fringe benefits and split supplies (s 9-75(2)-(4)).

Creditable acquisitions and importations require a creditable purpose (enterprise use, excluding input-taxed or private/domestic elements, subject to financial acquisitions threshold and borrowing exceptions) plus registration (ss 11-5, 11-15, 15-5, 15-10). GST-free supplies take precedence over input-taxed supplies unless the input-taxing provision mandates a choice (s 9-30(3)). Adjustments arise from cancellation, consideration changes or status changes (s 19-10), with increasing and decreasing adjustments calculated against previously attributed amounts (ss 19-50, 19-55, 19-80, 19-85). Bad-debt adjustments apply on write-off or 12-month overdue status (ss 21-5, 21-15), subject to cash-basis exclusions. Registration turnover thresholds are $50,000 (general) or $100,000 (non-profit) (s 23-15). Default tax periods are quarterly (s 27-5), with attribution tied to invoice or consideration timing (ss 29-5, 29-10, 29-15, 29-20).

GST-free supplies under Division 38 reduce the net amount by excluding GST on listed categories while preserving input tax credits. Input-taxed supplies under Division 40 exclude GST on the supply but deny input tax credits on related acquisitions. Margin scheme (s 75-5) calculates GST as 1/11 of the margin (consideration for supply less acquisition cost or approved valuation under s 75-10(3) table items 1-4), subject to ineligibility rules in s 75-5(3) and special rules in s 75-11 for groups, joint ventures, inheritances, going concerns and associates. Reverse-charge mechanisms (ss 83-5, 84-10, 86-5) shift GST liability to registered recipients. Grouping and joint-venture rules (ss 48-40 to 48-50, 51-30 to 51-40) treat members as a single entity for GST, credits and adjustments while disregarding intra-group supplies. Connection rules (ss 85-5, 84-75, 96-5) determine when supplies are connected with the indirect tax zone. Adjustments under Divisions 19, 21, 78-80 and 129 arise on changes in consideration, creditable purpose or settlement.

GST-free supplies attract no GST yet preserve input tax credit entitlements (ss 9-30, 9-80). Input-taxed supplies attract no GST and deny related input tax credits (ss 9-30, 9-80). Offshore supplies under s 84-5 are taxable supplies (reverse-charged) where the recipient is registered and meets the purpose test in s 84-5(1A) or consumer tests in ss 84-75, 84-100, 84-105. Electronic distribution platform operators and redeliverers are treated as suppliers (ss 84-55, 84-81). Margin scheme GST equals 1/11 of the margin (s 75-10). Insurance decreasing adjustments equal 1/11 of settlement (adjusted for input tax credit extent) (s 78-15). Long-term accommodation value is 50 per cent (or prescribed percentage) of price after the first 27 days (ss 87-5, 87-10). GST groups and joint ventures treat intra-group supplies as non-taxable with representative or operator liability (ss 48-40, 51-30). Non-profit sub-entities and GST branches are treated as separate entities for net amount calculations (ss 63-15, 54-40).

Key concepts include creditable purpose (modified by Divisions 69, 70, 71 and 72), margin (sections 75-10 to 75-16), decreasing and increasing adjustments (sections 69-50, 78-10, 78-15, 78-18, 79-10, 79-50, 79-55, 80-30), premium selection test (section 79-5), average input tax credit fraction (sections 79-15 and 79-100), reverse charge (sections 83-5, 84-10, 86-5), inbound intangible consumer supply (section 84-65), offshore supply of low value goods (section 84-77), GST group membership requirements (section 48-10), joint venture operator liability (section 51-30), and export timing rules (section 38-185 table items 1 to 7). New residential premises are defined by first sale or lease, substantial renovations or replacement construction, subject to the five-year use rule and subdivision exceptions (s 40-75). Reduced credit acquisitions attract a prescribed percentage input tax credit (s 70-15). Deposits and vouchers are excluded from consideration until forfeited or redeemed (ss 99-5, 100-5).

Every entity carrying on an enterprise that meets the registration turnover threshold must register (s 23-5). Voluntary registration is available where an enterprise is or will be carried on (s 23-10). Registered entities, importers, suppliers making connected supplies and recipients of taxable supplies are directly affected. Non-residents, government entities, non-profit bodies, incapacitated entities and participants in groups, joint ventures or religious groups are subject to modified rules (Divisions 48, 51, 49, 57, 58, 83, 146, 149).

Registered or required-to-be-registered suppliers and recipients of food, health, education, child care, export, religious, charity, transport, precious-metal, residential, financial and going-concern supplies; GST groups, religious groups, joint ventures, branches and non-profit sub-entities; resident agents for non-residents; representatives of incapacitated entities; insurers and CTP operators; suppliers and recipients of offshore intangibles or low-value goods; entities making or receiving associate supplies, security deposits, vouchers, lay-bys or debt-satisfaction supplies; and companies undergoing amalgamation or incurring pre-establishment costs are affected.

Registered entities making or acquiring GST-free, input-taxed or offshore supplies; non-residents supplying through resident agents (Div 57); representatives of incapacitated entities (Div 58); amalgamating companies (Div 90); insurers and CTP operators (Divs 78-80); suppliers and recipients of low-value goods and inbound intangibles (Subdivs 84-B-C); GST group members, joint venture participants, GST branches and non-profit sub-entities; charities, schools and religious institutions; recipients of reimbursements (Div 111) and parties to tax sharing or funding agreements (Div 110) are affected. The rules affect registered entities making or receiving supplies of real property, insurance, CTP, financial supplies, second-hand goods, exports, offshore intangibles and low-value goods, associates, non-residents, incapacitated entities, GST groups, religious groups, joint ventures, branches and resident agents. Suppliers and recipients of long-term accommodation, valuable metals, telecommunication supplies and reimbursements to employees or volunteers are also affected. Unregistered insured entities under Division 78 and non-registered creditors under Division 105 have limited obligations.

Registered entities forming GST groups or joint ventures (ss 48-5, 51-5), non-profit bodies electing sub-entity treatment (s 63-5), representatives of incapacitated entities (s 58-5), resident agents for non-residents (s 57-5), insurers and CTP scheme operators (Divisions 78-80), suppliers and recipients of second-hand goods (s 66-5), margin-scheme real-property transactions (s 75-5), and operators of electronic distribution platforms or redeliverers handling inbound intangibles or low-value goods (ss 84-55, 84-81) are affected.

Registered entities must lodge GST returns for each tax period (s 31-5) and pay assessed net amounts by the prescribed dates (ss 33-3, 33-5). Suppliers must pay GST on taxable supplies made (s 9-40). Importers must pay GST on taxable importations (s 13-15). Entities are entitled to input tax credits for creditable acquisitions and importations (ss 11-20, 15-15) and to refunds of negative net amounts (s 35-5). The Commissioner must register qualifying applicants and notify dates of effect, registration numbers and tax periods (s 25-5). Backdating of registration or cancellation is limited to four years absent fraud or evasion (ss 25-10, 25-60). Entities may elect monthly tax periods or vary end days within limits (ss 27-10, 27-35).

Suppliers must correctly classify supplies under ss 38-2, 38-3, 40-5, 40-35, 40-65 and 75-5 and issue tax invoices unless relieved (ss 75-30, 83-35, 84-50, 84-87). Recipients obtain input tax credits on creditable acquisitions (ss 48-45, 51-35, 57-10, 60-5) subject to four-year limits (s 93-5) and apportionment (ss 70-20, 84-13). Representative members bear group GST liabilities and hold group credits/adjustments (ss 48-40, 48-45, 48-50). Insurers obtain decreasing adjustments on settlements (ss 78-10, 78-15, 79-50) and increasing adjustments on excesses (ss 78-18, 79-55). Suppliers of long-term accommodation may elect reduced value (s 87-5) or opt out (s 87-25). Non-residents and offshore suppliers may agree to reverse charging (s 83-5) or be relieved of registration (ss 83-25, 83-30). Entities must notify membership changes within 21 days (ss 48-7, 51-7, 58-30) and maintain records for second-hand goods global accounting (s 66-55) and approved valuations (s 75-35).

Suppliers must issue tax invoices or adjustment notes except for inbound intangible consumer supplies and supplier-taxed low-value goods (ss 84-50, 84-87). Suppliers of offshore low-value goods must give approved-form GST notices and include registration and ABN details in import declarations (ss 84-89, 84-93). Insurers must calculate decreasing adjustments on settlements and increasing adjustments on excess payments (ss 78-10, 78-18). GST group representative members and joint venture operators must lodge returns and pay net amounts for the group or venture (ss 48-60, 51-55). Non-profit sub-entities must cancel registration within 21 days of losing qualifying status (s 63-30). Entities must notify cessation of agency, branch or representative status within prescribed periods (ss 57-30, 54-70, 58-30). Recipients of reverse-charged supplies are entitled to input tax credits calculated under the modified formula in s 84-13.

Registered recipients must pay GST on reverse-charged supplies under sections 83-5, 84-10 and 86-5. Suppliers must issue notices of GST amounts for offshore low-value goods supplies (section 84-89) and include tax information in customs documents (section 84-93). Insurers and CTP operators must calculate adjustments using settlement amounts or average input tax credit fractions (sections 78-15, 79-50). GST groups and joint ventures must notify formation, membership changes and representative or operator details (sections 48-5, 48-70, 51-5, 51-70). Entities must keep records of second-hand goods acquisitions (section 66-17) and approved valuations for margin scheme supplies (section 75-35). Recipients of exports may be treated as exporters under section 38-185(3) and (4) if documentary evidence requirements are met. Representatives of incapacitated entities must account for GST within the scope of their authority (section 58-10).

Representative members must notify group membership changes and may elect consolidated returns (ss 48-70, 51-52). Incapacitated-entity representatives must notify cessation within 21 days, lodge directed returns and apply received funds to GST liabilities (ss 58-30, 58-50, 58-65). Non-profit sub-entities must apply for cancellation on ceasing requirements (s 63-30). Suppliers of low-value goods must include registration details on customs documents where GST is collected (s 84-93). Recipients of reverse-charged offshore supplies must account for GST (s 84-10). Insurers obtain decreasing adjustments on settlement (s 78-10). Entities may elect annual apportionment for certain offshore-related credits (s 84-13(1A)).

The notes contain no specific penalty or prosecution provisions. Administration and recovery occur under the Taxation Administration Act 1953. Failure to notify cessation of group/branch/representative status within prescribed periods (ss 48-7(4), 51-7, 57-30, 58-30) or to lodge directed returns (s 58-50) attracts administrative penalties. Incorrect margin-scheme valuations or failure to apply ineligibility rules (s 75-5(3)) may produce underpaid GST recoverable with general interest charge. Unregistered creditors making debt-satisfaction supplies (s 105-5) must lodge returns and pay GST (ss 105-10 to 105-20). Good-faith acts by representatives attract immunity (s 58-70).

Failure to lodge returns or pay assessed net amounts within time limits (ss 78-90, 54-65) attracts general interest charge and penalties under the Taxation Administration Act 1953. Failure to notify cessation or revocation of choices within 21 days (ss 63-30, 48-7(3), 51-7(3)) may result in continued liability. No specific GST penalties are stated for incorrect treatment of margin scheme, insurance adjustments or offshore supplies beyond the general rules. No specific penalties are prescribed in these Divisions beyond the general requirement to lodge returns and pay assessed net amounts within prescribed periods (sections 78-85, 78-90, 105-15, 105-20). Failure to notify cessation of agency or branch activities attracts standard notification obligations (sections 57-30, 54-70). The Commissioner may cancel branch or agent registration where requirements cease (sections 54-75, 57-25).

Failure by a representative to notify unreported GST before declaring a dividend attracts the penalty under s 286-75 of Schedule 1 to the Taxation Administration Act 1953 (s 58-60). Directions to lodge returns for incapacitated entities are reviewable GST decisions (s 58-50). Commissioner cancellation of non-compliant sub-entity registration is reviewable (s 63-35).

The Act cross-references the Customs Act 1901 for customs value, duty and currency conversion on importations (s 13-20(2A)). Wine tax and luxury car tax are added to or subtracted from net amounts (s 17-5(2)). The Dictionary at s 195-1 defines asterisked terms. Non-operative material (explanatory sections headed “What this Division is about”, notes and examples) may be used only for limited interpretive purposes (ss 4-5, 4-10, 182-10). Special rules interact with Divisions 48-171 for groups, agents, insurance, offshore supplies and other modifications.

Division 81 overrides ss 9-15 and 9-17 for taxes, fees and charges (s 81-20). Division 82 overrides prescribed taxes/fees for development-right supplies (s 82-10(3)). Division 45 provides that Chapter 4 overrides Chapter 2 on inconsistency. Customs Tariff Act 1995 Schedule 4 items determine non-taxable importations (s 42-5). ITAA 1997 provisions on non-deductible expenses and FBT elections are mirrored for GST purposes (ss 69-5, 69-25 to 69-55). Legislation Act 2003 s 12(2) does not apply to certain Division 81 regulations (s 81-25).

Division 38 interacts with Medicare, NDIS, aged care and Disability Services and Inclusion Act 2023 funding provisions. Division 78 interacts with State/Territory stamp duty and statutory compensation schemes (s 78-100). Division 84 interacts with Customs Tariff and import declaration requirements. Divisions 48, 51, 57, 58, 63 and 110 interact with ITAA 1997 consolidation, MEC group and tax sharing rules (ss 721-25, 721-30) and TAA 1953 Sch 1 indirect tax sharing agreements. Division 69 interacts with ITAA 1997 Div 8 non-deductible expenses. Division 111 interacts with PAYG withholding and FBT rules. Division 87 interacts with commercial residential premises definitions used in other GST provisions.

Division 69 cross-refers to ITAA 1997 Division 8 and FBTAA 1986 section 149A(2)(b). Division 72 and section 38-185 interact with the Customs Act 1901 for export entry requirements. Divisions 78 to 80 modify treatment under the general adjustment rules in Divisions 19 and 21. Division 84 interacts with the definition of connected supplies in section 9-25. GST groups and joint ventures override individual entity liability under sections 48-40 and 51-30. Division 111 interacts with PAYG withholding rules in Schedule 1 to the Taxation Administration Act 1953. Division 93 interacts with assessment and review periods under the general GST administration provisions.

Division 69 denies input tax credits to the extent an acquisition is non-deductible under listed ITAA 1997 provisions or FBTAA 1986 s 149A(2)(b) (s 69-5). Division 72 values associate supplies at GST-exclusive market value and applies to GST branches and government entities (ss 72-10, 72-90). Pre-establishment credits are subject to later Division 129 adjustments (s 60-35). Margin-scheme ineligibility arises from prior GST-group, joint-venture or going-concern supplies (s 75-5). Offshore rules interact with taxable importation provisions and Division 57 agent rules (ss 84-83, 84-85). Religious-group treatment overrides ordinary adjustment rules (ss 49-40, 49-45).

The notes do not record any amendments or their rationales. No source notes identify specific amending Acts or commencement dates. No recent changes are recorded in the source notes.

The notes do not record any cases, challenges or controversies. No source notes identify cases, challenges or controversies. No court challenges or controversies are recorded in the source notes.

Asterisked terms refer to the Dictionary; once asterisked in a subsection they are not repeated (ss 3-1, 3-5). Non-operative material is not binding (s 4-5). Cash-basis accounting excludes certain bad-debt and attribution adjustments (ss 21-5(2), 21-15(2), 29-5, 29-10). Partial taxable supplies or importations require proportional valuation (ss 9-80, 13-25). Rounding follows nearest-cent rules with supplier or recipient choice of method (s 9-90). Backdating of registration deems earlier supplies taxable and acquisitions creditable (s 25-15). GST-free status prevails over input-taxed status unless the input-taxing rule requires election (s 9-30(3)). Special-rule checklists must be consulted before applying basic rules.

Margin-scheme ineligibility persists through prior GST-group, joint-venture, going-concern or associate acquisitions (s 75-5(3)(c)-(g) and s 75-5(4)). Input tax credits for second-hand goods are capped at 1/11 of consideration or subsequent GST (s 66-10) and require global accounting for divided re-supplies (ss 66-45 to 66-50). Offshore low-value goods supplies remain connected even if the supplier reasonably believes the recipient is not a consumer only after taking reasonable steps (s 84-100). Security deposits and vouchers are excluded from consideration until forfeiture, redemption or write-back (ss 99-5, 100-5, 100-15). Pre-establishment credits require registration within six months and full reimbursement (s 60-5). Partly connected supplies must be split (s 96-5) with incidental supplies (≤ $50,000) treated as principal (s 96-5(4)).

A supply may be treated as two separate supplies when it includes both low-value and other goods (s 84-79(2)). Margin scheme is unavailable if any part of the interest was acquired through an ineligible supply (s 75-5(2)). No tax invoice is required for margin scheme supplies (s 75-30) or inbound intangible consumer supplies (s 84-50), yet records must still be kept. GST on associate supplies without consideration is attributable to the period the thing starts to be done (s 84-25). Pre-establishment credits are lost if the company is not registered within six months or the acquirer is not reimbursed (s 60-15). Elections under Div 69 for meal entertainment must align with subsequent FBT elections or trigger adjustment events (s 69-50).

Margin-scheme ineligibility persists if the supplier acquired the interest through an ineligible supply, including GST-group or associate transactions (s 75-5). Second-hand goods global accounting under Subdivision 66-B requires expected division of goods and specific record-keeping to avoid future taxable treatment (ss 66-40, 66-55). Electronic platform operators are treated as suppliers of inbound intangibles unless the supplier is registered and disclosed (s 84-55). A supplier-taxed offshore low-value goods supply ceases to be taxable only after reimbursement and customs-document compliance (s 84-85). Pre-establishment credits require registration of the company within six months and full reimbursement to the acquirer (s 60-15).

Margin-scheme agreements must be in writing on or before the supply (section 75-5(1A)); ineligible prior acquisitions prevent application (section 75-5(2)). No input tax credit arises on margin-scheme acquisitions (section 75-20). CTP hybrid payments are treated as policy settlements only if causally linked (section 79-25). Suppliers of offshore low-value goods lose the taxable-importation exception if they cannot demonstrate a reasonable belief (section 84-83). Four-year time limits on input tax credits apply strictly unless exceptions in section 93-10 are met. Intra-group supplies are generally disregarded except where section 84-5 applies (section 48-40(2)). Election cessation under section 69-45 triggers adjustments confined to the FBT return lodgment tax period (section 69-50(2)).

Determine whether an enterprise is carried on and whether turnover meets the registration threshold; apply within 21 days if required (ss 23-5, 25-1). Issue tax invoices and attribute GST and input tax credits to the correct tax period (ss 29-5, 29-10). Calculate net amounts, apply adjustments for events, bad debts or status changes, and lodge returns and pay by the due dates (ss 17-5, 19-40, 19-70, 31-5, 33-3). For partial supplies or importations, apportion value and purpose correctly (ss 9-80, 11-30, 13-25, 15-25). Consult the relevant Chapter 4 Division listed in the checklists at ss 9-39, 11-99, 13-99, 15-99, 17-99, 19-99, 21-99 and s 37-1 before applying the basic rules. Maintain records sufficient to substantiate creditable purpose, consideration and attribution.

Obtain written agreements for margin scheme (s 75-5(1)), going concerns (s 38-325) and reverse charging (s 83-5). Apply approved valuations meeting Commissioner determinations (s 75-35) and maintain records substituting for tax invoices (ss 66-17, 84-87). Notify group/branch/representative changes within 21 days and align tax periods where permitted (ss 48-70, 48-73, 54-10). Elect reduced-value long-term accommodation or tuckshop/fund-raising treatment before the relevant period and revoke only after 12 months where required (ss 40-130, 40-160, 87-25). Apportion creditable purpose for financial supplies and offshore acquisitions using prescribed formulas (ss 70-20, 84-13). Treat intra-group supplies as disregarded except for specified offshore supplies (ss 48-45, 49-30).

Maintain records of supplier details, description, date and consideration for second-hand goods (s 66-55) and import declarations for low-value goods (s 84-93). Obtain and retain ABNs, declarations or prescribed information to support reasonable beliefs that recipients are not Australian consumers or not consumers (ss 84-100, 84-105). Ensure written agreements designate electronic distribution platform operators or redeliverers as suppliers where multiple parties are involved (ss 84-55(2), 84-81(5)). Apply for GST branch or non-profit sub-entity registration only where independent accounting and separate identification exist (ss 54-5, 63-15). Notify the Commissioner of membership changes, cessations or revocations within the prescribed 21-day or 14-day periods. Attribute GST, credits and adjustments strictly to periods of actual membership or authority (ss 48-51, 58-10).

Maintain written margin-scheme agreements and approved valuations (sections 75-5, 75-35). Keep supplier details, descriptions and consideration records for second-hand goods (section 66-17). Obtain and retain documentary evidence of export for section 38-185(3) and (4) treatment. Ensure recipient registration status and purpose-test satisfaction before applying reverse-charge rules (sections 83-5, 84-5). Notify the Commissioner promptly of group, joint-venture or branch changes (sections 48-70, 51-70, 54-70). Apply average input tax credit fractions consistently after election under section 79-15. Treat security deposits as non-consideration until forfeited (section 99-5) and issue required notices for offshore supplies (section 84-89).

Obtain written agreements and approved valuations before applying the margin scheme (s 75-5). Maintain records of name, address, description, date and consideration for second-hand goods acquisitions exceeding $50 (s 66-17). Notify the Commissioner of group membership changes and incapacitated-entity representation cessation in approved form within prescribed periods (ss 48-70, 58-30). Apply the prescribed percentage reduction to input tax credits on reduced credit acquisitions (s 70-15). Ensure customs documentation for low-value goods includes the supplier’s registration number and extent of taxable treatment (s 84-93). Elect annual apportionment where available for offshore-related credits (s 84-13(1A)).