A New Tax System (Goods and Services Tax): Recipient Created Tax Invoice Determination 2023

The instrument builds on the GST Act concept of a recipient created tax invoice, but it defines who, and on what conditions, may issue such a document in place of a supplier-issued tax invoice. Core concepts and their operational import under this instrument are:

• Recipient created tax invoice (RCTI): The instrument presumes the statutory concept of RCTI as defined in the GST Act; it does not redefine the term but refers to the statutory requirements that an RCTI document must satisfy (s 4 note; s 7(1)(a)). The instrument also treats recipient created adjustment notes under the parallel GST Act provisions (s 7(1)(a)(ii)).

• Eligible recipients: The instrument distinguishes between (a) government related entities and large business entities, and (b) business entities more generally where the recipient determines the supply value. A government related entity or large business entity may issue an RCTI for a taxable supply if both parties are GST-registered and the recipient satisfies s 7 (s 6(1)). A business entity that is the recipient of a taxable supply may also issue an RCTI if it is GST-registered, determines the value of the taxable supply, and satisfies s 7 (s 6(2)). The concept of large business entity is defined with cross-references to turnover and GST group membership conditions (s 4).

• Written agreement: A written agreement between supplier and recipient is compulsory. The instrument allows either a standalone written agreement meeting section 8, or an agreement embedded in the RCTI meeting section 9 (s 7(1)(d)). The embedded-agreement route contains an express 21‑day supplier objection window (s 7(1)(e); s 9(1)(e)).

• Time limits and records: Recipients must issue the RCTI within 28 days of the supply or, where the recipient determines value after supply, within 28 days of value determination (s 7(1)(b)). The recipient must retain the original RCTI or a copy for five years (s 7(1)(c)).

• Registration and notification obligations: Both parties must be registered for GST when entering into an agreement (s 8(1)(c)) or when the RCTI is issued (s 9(1)(d)); both parties must agree to notify the other if they cease to be registered (s 8(1)(d)(iii)-(iv); s 9(1)(d)). Standalone agreements must specify supplies covered and be current when an RCTI is issued (s 8(1)(a)-(b)).

• Conditional operation and cessation: The instrument disallows issuing RCTIs after either party fails to comply with the instrument’s requirements (s 7(1)(f)). Recipients must also “reasonably comply with its obligations under taxation laws” (s 7(1)(g)), a broadly phrased standard that the instrument imposes without elaborating the tests.

• Repeal of earlier instruments: Schedule 1 repeals a comprehensive list of prior RCTI determinations and class determinations pertaining to specific industries, entities and activities. The repeal items are expressed as “Repeal the instrument” for each named instrument in Schedule 1.

Operationally, the instrument conflates procedural controls (time limits, retention) with contractual requirements (written agreement content and notification obligations) and with eligibility rules based on registration and size (large business entity test). The instrument explicitly makes issuance of an RCTI conditional on both documentary compliance and on the continued compliance of either party with the instrument’s requirements.

The instrument directly affects three groups of legal and economic actors: recipients of taxable supplies who may issue RCTIs, suppliers of goods or services to those recipients, and advisers or intermediaries (accountants, tax agents, software vendors) who implement invoicing and recordkeeping systems.

Recipients

• Government related entities and large business entities: These recipients are authorised to issue RCTIs provided they and their suppliers are registered for GST and the recipient satisfies the requirements in s 7 (s 6(1)). The definition of large business entity in s 4 links eligibility to the large business entity turnover condition and GST group membership or prospective membership. That definition can capture entities that are members of GST groups where another member meets the turnover threshold, or joint venture operators where a participant meets the threshold. Consequently, entities within a GST group may gain recipient status by group membership, not only by standalone turnover (s 4 large business entity paragraphs (a)-(e)).

• Business entities determining value: A business entity that is the recipient of a taxable supply may issue an RCTI only where the recipient determines the value of the taxable supply and both parties are GST-registered (s 6(2)). This affects purchasers who have contractual or operational responsibility to quantify supplier charges.

Suppliers

• Suppliers to RCTI-issuing recipients may be asked to yield invoice-issuing rights. Under both standalone and embedded agreements, suppliers must acknowledge they are registered for GST when entering the agreement and must agree not to issue tax invoices for the supplies covered by the agreement (s 8(1)(c); s 8(1)(d)(ii); s 9(1)(c)). For embedded agreements, silence by the supplier for 21 days after receiving an RCTI equates to acceptance (s 9(1)(e); s 7(1)(e)).

Intermediaries and systems providers

• Accountants, tax agents, enterprise resource planning and invoicing software providers will need to implement and support the 28-day issuance window, the five-year retention requirement, the content conforming to the GST Act’s RCTI paragraphs, and the mechanics for either standalone written agreements or embedded agreements with the 21-day objection window (s 7(1)(a)-(c); s 8; s 9).

Other consequences

• Entities previously covered by specific class or sector determinations listed in Schedule 1 will be affected because those determinations are expressly repealed. That will change the statutory instrument landscape for many industry-specific arrangements; affected parties must check whether they remain eligible to issue RCTIs under this general determination and whether pre-existing contracts need amendment to comply with the new standard requirements in sections 7-9 (Schedule 1).

Who pays and who decides

• The recipient pays the compliance costs associated with implementing the written agreement, issuing RCTIs in the required format and timeframe, retaining records for five years, and ensuring “reasonable compliance” with taxation laws (s 7(1)(c), (d), (g)). Suppliers bear the administrative cost of monitoring for embedded RCTI agreements, notifying the recipient within 21 days if they do not accept an embedded agreement, and refraining from issuing tax invoices where they have agreed not to do so (s 9(1)(e); s 8(1)(d)(ii)). The Deputy Commissioner, by making the determination under s 29‑70(3) of the GST Act (s 3), decides the conditions and the legal framework for RCTIs; enforcement and penalties are matters for the GST Act, not the instrument itself.

The instrument sets specific duties for recipients and imposes constraints on suppliers. It creates rights in the sense of enabling recipients to issue RCTIs where the criteria are met. The principal duties and rights are as follows, with specific textual anchors.

Duties of the recipient

• Issue RCTIs only if both parties are GST-registered and the recipient meets the requirements in s 7 (s 6(1)(a); s 6(2)(a)). This is a condition precedent to issuing an RCTI.

• Ensure RCTI document content complies with the GST Act requirements for RCTIs or recipient created adjustment notes (s 7(1)(a)). The instrument refers to paragraphs 29-70(1)(b), (c) and (d) of the GST Act for RCTI content, and paragraphs 29-75(1)(b), (c) and (d) for recipient-created adjustment notes.

• Issue the RCTI to the supplier within 28 days of either the taxable supply being made or the recipient’s determination of the supply value if that occurs after supply (s 7(1)(b)). This creates a strict operational time window.

• Retain the original RCTI or a copy for five years (s 7(1)(c)). This is a document retention duty.

• Have a written agreement either as a standalone agreement meeting section 8, or embedded in the RCTI meeting section 9 (s 7(1)(d)). The recipient must ensure the agreement is current when an RCTI is issued (s 8(1)(b)).

• For embedded agreements, refrain from issuing an RCTI if the supplier notifies within 21 days that it does not accept the proposed embedded agreement (s 7(1)(e); s 9(1)(e)). In practice recipients must monitor the 21-day period for supplier objections.

• Cease issuing RCTIs from the date either party has failed to comply with any of the requirements of this instrument (s 7(1)(f)). This is an operational stop-loss duty tied to compliance failures.

• “Reasonably comply with its obligations under taxation laws” (s 7(1)(g)). The instrument leaves the content of this obligation to the applicable taxation laws but imposes a general standard.

Duties of the supplier

• A supplier entering a standalone written agreement must acknowledge it is registered for GST at the point of entry (s 8(1)(c)).

• A supplier must agree not to issue tax invoices for the supplies specified in the agreement (s 8(1)(d)(ii); s 9(1)(c)). This is a constraint on the supplier’s usual right to issue tax invoices unless the supplier is outside the agreement or ceases to be registered.

• A supplier must notify the recipient if it ceases to be registered for GST (s 8(1)(d)(iii); s 9(1)(d)). For embedded agreements, the supplier must notify the recipient within 21 days of receiving an RCTI if it does not accept the proposed written agreement (s 9(1)(e)).

Rights created or implied

• Right of a recipient to issue RCTIs for taxable supplies covered by a compliant agreement, subject to meeting the instrument’s conditions (s 6 and s 7). This right is conditional on registration, agreement form and compliance with procedural requirements.

• For business entities that must determine value (s 6(2)(b)), the instrument gives the recipient the unilateral role of determining the taxable supply value for RCTI purposes where that is an agreed contractual arrangement. The instrument does not prescribe valuation methodology but conditions the issuance window on when the recipient determines the value (s 7(1)(b)(ii)).

Constraints and interactional duties

• The instrument restricts the supplier’s ability to issue tax invoices for covered supplies (s 8(1)(d)(ii); s 9(1)(c)). Suppliers must be aware that acceptance by silence of an embedded agreement within 21 days converts the RCTI into an agreement (s 9(1)(f); s 7(1)(e)).

• The recipient’s duty to retain records for five years (s 7(1)(c)) intersects with the broader taxation law recordkeeping obligations to which the recipient must “reasonably comply” (s 7(1)(g)).

Practical duty implications

• The written agreement must be specific about the supplies covered (s 8(1)(a)), which imposes a drafting requirement and limits scope creep.

• The large business entity definition in s 4 means entities linked by GST group membership or joint venture operator roles may be subject to recipient duties even where turnover is attributable to other members of the GST group (s 4 paragraphs (b)-(e)).

The instrument itself does not create a specific penalty regime or specify monetary sanctions. It sets conditions and procedural consequences for RCTI issuance but leaves regulatory enforcement and penalties to the GST Act and general taxation law enforcement frameworks referenced in the instrument.

What the instrument states about enforcement

• Condition-based operational cessation: Section 7(1)(f) provides that a recipient must not issue an RCTI on or after the date when either the recipient or the supplier has failed to comply with any of the requirements of this instrument. That provision creates a direct operational consequence,ceasing issuance of RCTIs,rather than specifying a monetary penalty.

• Reasonable compliance obligation: Section 7(1)(g) requires the recipient to “reasonably comply with its obligations under taxation laws”. This is a catch-all expectation that links the instrument’s operation to the broader taxation law compliance regime, which includes statutory penalties, interest charges, and administrative processes under the GST Act and related taxation laws. The instrument itself does not elaborate those sanctions.

• Authority and cross-reference: The instrument is made under subsection 29-70(3) of the GST Act (s 3) and explicitly requires document compliance with paragraphs 29-70(1)(b), (c) and (d) of the GST Act or corresponding recipient-created adjustment note provisions (s 7(1)(a)). Enforcement of those GST Act provisions and any non-compliance consequences falls within the GST Act’s regulatory architecture rather than this instrument.

Practical enforcement implications for practitioners

• Administrative enforcement: The Commissioner of Taxation exercises enforcement powers under the GST Act. While this determination imposes conditions for when RCTIs may be issued, compliance monitoring and any determinations about penalties or reassessments would be made under the GST Act’s general compliance and penalty provisions. The instrument itself will be used as a standard for administrative checks that the Commissioner conducts.

• Contractual and commercial consequences: If a recipient is required by s 7(1)(f) to stop issuing RCTIs because of a failure to comply with the instrument, the commercial arrangement between supplier and recipient may be disrupted. Suppliers may resume issuing tax invoices, and parties may need to negotiate how supply invoices, GST reporting and potential reconciliations are handled. Those commercial consequences are not penalties under the instrument but are practical enforcement by non-issuance.

• Recordkeeping and evidentiary consequences: The five-year record retention duty (s 7(1)(c)) creates an evidentiary and sanction risk if records are missing when the Commissioner seeks verification. While the instrument does not specify a particular sanction for failure to retain, loss or absence of required documentation will materially affect an entity’s ability to substantiate GST treatment in an audit under the GST Act.

Limits of the instrument on penalties

• No monetary or criminal penalties are created by this instrument. Any monetary penalties, interest or other sanctions that arise from contraventions of GST requirements will be sourced from the GST Act and related taxation laws. The instrument’s role is to specify conditions and procedures for RCTIs; it does not itself prescribe fines, administrative penalties, or criminal sanctions.

Adviser note

• Practitioners should look to the GST Act and taxation administration law for the specific enforcement and penalty consequences that could flow from failure to meet the instrument’s requirements, since those statutes contain the enforcement mechanisms and sanctions referenced indirectly by this determination.

This determination operates as a delegated instrument under the GST Act and interacts with multiple statutory concepts and obligations governed by that Act and by general taxation law. The instrument does not stand alone; its operation depends on and references the GST Act’s definitions, procedural provisions and broader taxation obligations.

Cross-reference to the GST Act

• Authorising provision: The instrument is made under subsection 29‑70(3) of the GST Act (s 3). Its content therefore must be read in the context of the GST Act’s provisions governing RCTIs, tax invoices, and recipient-created adjustment notes.

• Content requirements: Section 7(1)(a) requires that the RCTI document “complies with the requirements of: (i) paragraphs 29‑70(1)(b), (c) and (d) of the GST Act; or (ii) paragraphs 29‑75(1)(b), (c) and (d) of the GST Act, for recipient created adjustment notes.” Those referenced paragraphs of the GST Act prescribe specific information the invoice or adjustment note must contain. The determination therefore operates as a procedural authorisation layered on top of statutory content obligations.

Definitions and thresholds

• Large business entity: The instrument uses the GST Act’s concept of GST turnover and the tax period turnover threshold in defining “large business entity” (s 4). The instrument’s eligibility rules therefore interact with the GST Act’s turnover rules and the mechanics for calculating GST turnover, including any exceptions in the GST Act paragraphs noted in the definition (s 4 defines large business entity and large business entity turnover condition with express references to parts of the GST Act).

• GST registration: The instrument repeatedly conditions RCTI issuance on both parties being registered for GST at the relevant times (s 6(1)(a); s 6(2)(a); s 8(1)(c); s 9(1)(d)). That requires application of the GST Act’s registration and cancellation rules, and their timing consequences.

Recordkeeping and taxation administration law

• Retention period: The instrument requires retention of the original RCTI or a copy for five years (s 7(1)(c)). That obligation intersects with the recordkeeping provisions in the taxation administration law and the income tax and GST acts with respect to document retention and audit access.

Contract law and commercial obligations

• Written agreement requirements: Sections 8 and 9 impose minimum contractual elements for written agreements or embedded agreements. These requirements will influence contract drafting, particularly insofar as they require specification of supplies covered (s 8(1)(a)), currentness when issuing an RCTI (s 8(1)(b)), and specific notification obligations (s 8(1)(d)(iii)-(iv); s 9(1)(d)). The instrument therefore interacts with state and territory contract law through the application of written agreements in commercial arrangements, but the instrument’s own requirements are limited to GST and invoicing matters.

Interaction with previously existing determinations

• Repeal of prior instruments: Schedule 1 repeals a comprehensive list of earlier recipient created tax invoice determinations and classes that had been made over several years. Entities previously operating under those specific determinations must now look to this general instrument for authorisation and requirements. That repeal interacts with transitional or savings provisions if any are present in the instruments that have been repealed; however, this instrument does not itself include transitional provisions beyond the commencement statement (s 2). Practitioners should therefore check whether any transitional arrangements were included in the repealed instruments or whether commercial contracts referenced those older instruments.

Scope limits and overlap

• Scope: This instrument governs the circumstances under which recipients may issue RCTIs. It does not change the underlying taxable supply rules, GST liability, or input tax credit entitlements, which continue to be governed by the GST Act. The instrument therefore should be read as procedural and documentary guidance that complements the substantive GST rules.

Administrative interaction

• Commissioner’s compliance activity: Because the instrument is made by the Deputy Commissioner and references GST Act provisions, compliance, audits and any corrective actions will be handled under the administrative powers of the Commissioner as set out in taxation law. The instrument functions as the operative standard against which issuing practices will be evaluated during compliance activity.

This instrument is presented as a single, new determination that commenced on the day after registration (s 2(1)). It also performs substantive repeal work via Schedule 1. The instrument does not include a clause-by-clause amendment history or a schedule of earlier amendments to this instrument itself, beyond the list of instruments repealed.

Key elements of the amendment history present in the instrument

• Commencement: The instrument’s commencement provision states that the whole instrument commences on the day after registration (s 2(1)). The table format in s 2 records that commencement detail and notes that the table relates only to the provisions as originally made.

• Repeals of prior determinations: Schedule 1 lists a sequence of instruments,sectoral RCTI determinations and classes from 2015, 2016 and 2017,and repeals “the whole of the instrument” for each listed instrument. The repeals cover a wide range of industry-specific determinations, for example those for caravan park operators, horseracing clubs, quarry operators, wholesalers of photographic imaging equipment and related supplies, education fund providers, road transport operators, vehicle dealers, sell agent services, construction work, and many others (Schedule 1 items 1-50 and beyond as listed). Each repeal item follows the same formula: identification of the named instrument and “Repeal the instrument”.

• Consolidation effect: While the instrument does not include a narrative statement of purpose in this text, the Schedule 1 repeals indicate an intention to consolidate numerous previously separate instruments into a single overarching determination addressing RCTIs. The repeals remove the earlier, instrument-specific authorisations listed in Schedule 1, replacing them with this general rule set.

What the instrument does not show

• It does not set out any transitional provisions in this text for entities operating under the repealed instruments. The commencement provision is limited to the instrument itself and a note that the table refers only to the instrument as originally made (s 2(2)). Practitioners should therefore examine the repealed instruments separately to determine whether those instruments contained transitional measures or whether any contractual or statutory references to the older determinations require updating.

• The instrument does not show any prior amendments to itself; it is presented as the 2023 instrument replacing prior determinations. Any subsequent amendments to this 2023 instrument are not reflected here, as the instrument’s s 2 note indicates the commencement table is not amended for later changes.

Practical implications of the repeal/amendment sweep

• Entities that relied on earlier, sector-specific determinations must confirm whether the new, general determination accommodates their arrangements or whether they need to adjust written agreements, invoicing systems and recordkeeping to meet the standardised requirements in sections 7-9.

• Because the instrument centralises RCTI authorisation and procedural requirements, advisers should update compliance checklists, contract schedules, invoicing templates and electronic record systems to reflect the 28-day issuance window, five-year retention requirement and the embedded-agreement acceptance mechanics.

The instrument itself contains no litigation history, and it does not reference any judicial decisions. The text does not identify prior cases, disputes or administrative decisions relating to the topics covered. Consequently, there are no cases named in the instrument that can be reported.

Possible axes of litigation or dispute that the instrument’s terms may generate

• Meaning and application of “determines the value”: Section 6(2)(b) allows a business entity recipient to issue an RCTI where the recipient “determines the value of the taxable supply acquired from the supplier”. The instrument does not define how that determination is to be made. Absent statutory elaboration in this instrument, disputes could arise about when and how value is determined, whether contractual arrangements giving the recipient the valuation role are enforceable, and whether the valuation was performed in accordance with commercial or statutory standards. Any litigation on this point would necessarily engage the GST Act’s substantive rules about value and taxable supply.

• “Reasonably comply with its obligations under taxation laws”: Section 7(1)(g) imposes a general, open-textured obligation on the recipient to “reasonably comply” with taxation laws. Litigation might turn on what that standard requires in practice. Adjudication could involve statutory interpretation of the phrase in context with the GST Act and taxation administration law, and assessment of objective reasonableness in recordkeeping, reporting and calculation of GST liabilities.

• Effectiveness of embedded agreement acceptance by silence: The instrument treats acceptance of the RCTI as constituting acceptance of an embedded written agreement if the supplier does not notify the recipient within 21 days that it does not accept the proposed agreement (s 9(1)(e)-(f)). Legal disputes could arise about whether silence constitutes agreement in particular commercial circumstances, whether the supplier received notice or was given a reasonable opportunity to object, and whether such acceptance is binding where external contractual terms or statutory requirements conflict.

• Coverage after repeal of prior determinations: Because Schedule 1 repeals a wide array of prior, instrument-specific determinations, affected parties may litigate whether particular supplies or industry arrangements remain authorised under the general 2023 determination. Disputes could also arise over whether transitional rights or expectations established under earlier determinations survive repeal, especially where parties contracted on the basis of a named prior determination.

• Compliance consequences and administrative review: Enforcement actions taken by the Commissioner under the GST Act, including reassessments, penalties, or determinations that RCTIs were invalidly issued, could generate litigation or merits review applications. While the instrument itself does not set penalty amounts or processes, the procedural requirements it establishes will be relied on by the Commissioner when assessing compliance. Judicial or administrative review may therefore follow from GST Act enforcement activity that references this determination.

What the instrument’s silence means for litigants

• Because the instrument does not include explicit dispute-resolution rules, transitional provisions, or definitions refining key terms such as “determines the value” or “reasonably comply”, litigants will need to rely on the GST Act, contract law principles, and administrative law doctrines to resolve disputes. The instrument serves as a statutory standard of conduct for RCTIs, which will be invoked in audits, objections and, if contested, litigation under the GST Act and taxation administration frameworks.

Practical advise for practitioners (procedural, not prescriptive)

• Where a factual or legal question implicates the meaning of terms used in this instrument, ensure the relevant contractual documentation, evidence of notification and contemporaneous recordkeeping are preserved to support positions in any review or dispute. The five-year retention obligation (s 7(1)(c)) is relevant to evidentiary readiness.

The instrument contains several operational and legal features that can create traps for the unwary. The following are specific “gotchas” extracted from the instrument text that materially affect implementation, compliance risk and contractual design.

Embedded agreement acceptance by silence

• If a recipient embeds the written agreement into an RCTI, the instrument deems the supplier to have accepted the proposed written agreement unless the supplier notifies the recipient within 21 days that it does not accept it (s 9(1)(e); s 7(1)(e)). The consequence is that issuing the RCTI triggers an acceptance clock. Recipients issuing embedded-agreement RCTIs must ensure robust evidence of delivery and supplier receipt to support reliance on deemed acceptance. Suppliers must monitor communications and respond within 21 days to avoid automatic acceptance.

28-day issuance window tied to value determination

• The RCTI must be issued within 28 days after either the taxable supply is made or the value of the taxable supply is determined by the recipient if that value determination occurs after supply (s 7(1)(b)). For business entities under s 6(2) who must determine value, this creates a two-stage timing rule. If a recipient delays determining value, the 28-day clock starts on the later event. However, the instrument does not prescribe valuation method or evidence requirements, creating exposure to disputes about when the recipient “determined” value and whether the 28-day deadline was met.

Retention requirement and evidentiary risk

• The recipient must retain the original RCTI or a copy for five years (s 7(1)(c)). Failure to retain will materially undermine a recipient’s ability to substantiate RCTI issuance in a GST audit. The instrument does not specify electronic versus paper retention modalities; practitioners should note the statutory retention period is non-negotiable in the instrument.

Duty to stop issuing RCTIs after non-compliance

• Section 7(1)(f) requires recipients to stop issuing RCTIs from the date when either the recipient or the supplier has failed to comply with any of the requirements of this instrument. This may unexpectedly disrupt supply chains where a supplier’s registration lapses or a supplier disputes an embedded agreement. Contracts should include contingency provisions addressing how invoicing will proceed if RCTI issuance must stop.

Large business entity definition complexities

• The definition of large business entity in s 4 reaches entities by reference to GST group membership and joint venture operator status (s 4 paragraphs (b)-(e)). An entity that would not meet the turnover threshold on its own may nevertheless be a “large business entity” because of membership or prospective membership of a GST group where another member meets the threshold. Parties should confirm GST group structures and joint venture operator roles and how those relationships affect RCTI eligibility.

Supplier’s forbearance from issuing tax invoices

• Standalone and embedded agreements require the supplier to agree not to issue tax invoices for supplies covered by the agreement (s 8(1)(d)(ii); s 9(1)(c)). Suppliers must ensure they are legally and practically able to refrain from issuing tax invoices for the arrangements in question, including in light of contractual commitments to third parties or internal billing systems that may automatically generate supplier invoices.

“Reasonably comply with taxation laws” is vague

• Section 7(1)(g) imposes a general obligation for recipients to “reasonably comply with its obligations under taxation laws”. The instrument does not define the scope of that duty. The standard could be invoked in audits or disputes to challenge RCTI practices even where the express procedural steps in the instrument have been observed. Entities should therefore ensure that RCTI practices sit within the broader taxation compliance framework, including valuation, reporting and input tax credit claims.

Repeal of sector-specific determinations

• Schedule 1 repeals many sector- or class-specific determinations. Organisations that previously relied on a named repealed instrument must not assume those arrangements survive verbatim. The new general determination may impose different documentary, timing and notification requirements; contracts and operational practices may therefore require updating.

Record of delivery and acceptance

• For embedded agreements, the instrument treats acceptance as occurring if the supplier does not notify objection within 21 days (s 9(1)(e)-(f)). To rely on this, recipients should ensure they have robust records showing the supplier received the RCTI and the embedded agreement, and that the 21-day timeframe was observed. Absence of clear delivery records creates risk.

No express transitional rules included

• The instrument contains no transitional provisions dealing with entities transitioning from the repealed instruments to this determination. Absent those transitional rules, parties must proactively review their status and take steps to ensure agreements and practices comply with this instrument’s requirements.

Compliance with the instrument requires a combination of legal, contractual and operational steps. The following is a practical, source-grounded checklist aligned to the instrument’s provisions (chiefly sections 6-9 and s 7(1)(a)-(g)).

1. Confirm GST registration status

• Ensure both recipient and supplier are registered for GST at the time an RCTI is to be issued, as registration is a necessary precondition under s 6(1)(a) and s 6(2)(a). Implement a verification step in procurement/onboarding processes to capture GST registration numbers and effective registration dates.

2. Establish recipient eligibility

• Determine whether the recipient is a government related entity, a large business entity, or another business entity that will be the party determining the value of the taxable supply. For recipients potentially qualifying as a large business entity, review turnover calculations and GST group membership because the definition in s 4 includes entities that are members of GST groups where other members meet the turnover threshold (s 4 paragraphs (a)-(e)).

3. Draft and put in place a compliant written agreement

• Decide whether to use a standalone written agreement (s 8) or to embed the agreement within each RCTI (s 9). A standalone agreement must:

  • Specify the taxable supplies it covers (s 8(1)(a)).

  • Be current when an RCTI is issued (s 8(1)(b)).

  • Contain acknowledgements from both parties that each is registered for GST when entering into the agreement (s 8(1)(c)).

  • Include the required conditions, namely that the recipient can issue RCTIs; the supplier will not issue tax invoices for the supplies; the supplier will notify the recipient if it ceases to be registered; and the recipient will notify the supplier if it ceases to be registered (s 8(1)(d)(i)-(iv)).

• If embedding the agreement into the RCTI, ensure the RCTI includes the declaratory statements required by s 9(1)(a)-(f), including the explicit 21‑day objection process (s 9(1)(e)-(f)). Keep a standard template for embedded agreements that captures all s 9 declarations.

4. Operationalise the 21-day objection period for embedded agreements

• If using embedded agreements, implement process controls to track delivery of the RCTI to the supplier and to monitor the 21‑day clock for supplier objections (s 7(1)(e); s 9(1)(e)). Maintain proof of delivery and a log of any notices from suppliers that they do not accept the proposed embedded agreement. If a supplier objects within 21 days, do not treat the RCTI as authorising the arrangement.

5. Comply with the 28-day issuance requirement

• Ensure invoicing systems are configured to issue the RCTI within 28 days of the taxable supply or within 28 days of the recipient determining the value if the recipient determines value after supply (s 7(1)(b)(i)-(ii)). Implement alerts or workflow rules so that value determinations are timestamped and associated RCTIs are generated within the 28-day period.

6. Retain records for five years

• Maintain originals or copies of RCTIs for at least five years (s 7(1)(c)). Ensure retention policies capture electronic copies and include procedures for secure storage, retrieval and production for audit purposes.

7. Ensure RCTI content meets GST Act requirements

• The RCTI must comply with the content requirements in paragraphs 29‑70(1)(b), (c) and (d) of the GST Act for RCTIs, or the corresponding paragraphs in the GST Act for recipient created adjustment notes (s 7(1)(a)). Ensure invoice templates include the statutory data fields required by the GST Act.

8. Institute notification procedures for registration changes

• Build procedures so that if either party ceases to be registered for GST they will promptly notify the other (s 8(1)(d)(iii)-(iv); s 9(1)(d)). Contracts should record this obligation and specify timelines for notification as required by the instrument.

9. Monitor compliance and stop RCTI issuance if required

• Establish compliance triggers: if either party fails to comply with the instrument’s requirements, the recipient must not issue RCTIs from that date (s 7(1)(f)). Ensure procedures and governance escalation paths are in place so that invoicing systems can be switched to supplier-issued tax invoices immediately upon detection of non-compliance.

10. Maintain broader taxation law compliance

• Because s 7(1)(g) requires recipients to “reasonably comply with its obligations under taxation laws”, integrate RCTI practices into overall GST and taxation compliance programs. That includes consistent treatment of input tax credits, correct reporting in activity statements, appropriate valuation methodologies in line with contractual terms and tax law, and readiness for audits under the GST Act.

11. Review contracts and existing practices in light of repeals

• Entities previously relying on instruments listed in Schedule 1 should review whether their arrangements require amendment to satisfy the general requirements in this instrument. Contracts that expressly reference a repealed instrument or that were designed to fit sector-specific rules should be updated to reflect the new general requirements.

12. Evidence of delivery and acceptance

• For embedded agreements, keep robust proof of delivery for RCTIs and any responses from suppliers. Where acceptance is based on supplier silence after 21 days (s 9(1)(f)), ensure a documented delivery trail to substantiate the deemed acceptance if needed in an audit.

13. Document valuation process where recipient determines value

• If the recipient is responsible for determining the value of supplies under s 6(2)(b), document the valuation methodology, approval process and timing of the determination to support the 28-day issuance timing and to defend value choices in any review.

14. Update systems, training and vendor contracts

• Ensure invoicing and accounting systems, internal controls, and vendor contracts are updated to reflect recipient issuing rights, supplier obligations not to issue tax invoices for covered supplies, and the operational timelines specified in the instrument. Provide training to procurement, accounts payable and receivable teams so they understand the 21-day and 28-day deadlines and the recordkeeping obligations.

By following the steps above, an entity positions itself to comply with the instrument’s formal requirements (s 6-9 and s 7(1)(a)-(g)), to manage evidentiary risk and to interface with taxation administration processes that will evaluate RCTI practices under the GST Act.