Schedule 3 — Adjustments for third party payments

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

1  Paragraph 134-5(1)(b)

Repeal the paragraph, substitute:

                     (b)  your supply of the thing to the other entity:

                              (i)  was a * taxable supply; or

                             (ii)  would have been a taxable supply but for a reason to which subsection (3) applies; and

2  Paragraph 134-5(2)(a)

Repeal the paragraph, substitute:

                     (a)  either:

                              (i)  if your supply to the other entity was a * taxable supply—the amount of GST payable on the supply; or

                             (ii)  if your supply to the other entity would have been a taxable supply but for a reason to which subsection (3) applies—the amount of GST that would have been payable on the supply had it been a taxable supply;

                            taking into account any other * adjustments that arose, or would have arisen, relating to the supply; and

3  Paragraph 134-5(2)(b)

After “payable”, insert “, or would (but for a reason to which subsection (3) applies) have been payable,”.

4  Subparagraph 134-5(2)(b)(ii)

After “adjustments”, insert “that arose, or would have arisen,”.

5  At the end of section 134-5

Add:

             (3)  This subsection applies to the following reasons why your supply of the thing to the other entity was not a * taxable supply:

                     (a)  you and the other entity are * members of the same * GST group;

                     (b)  you and the other entity are members of the same * GST religious group;

                     (c)  you are the * joint venture operator for a * GST joint venture, and the other entity is a * participant in the GST joint venture.

             (4)  However:

                     (a)  paragraph (3)(a) does not apply if you and the payee are * members of the same * GST group when the payment referred to in paragraph (1)(a) is made; and

                     (b)  paragraph (3)(b) does not apply if you and the payee are members of the same * GST religious group when that payment is made.

6  Paragraph 134-10(1)(b)

Repeal the paragraph, substitute:

                     (b)  your acquisition of the thing from the other entity:

                              (i)  was a * creditable acquisition; or

                             (ii)  would have been a creditable acquisition but for a reason to which subsection (3) applies; and

7  Paragraph 134-10(2)(a)

Repeal the paragraph, substitute:

                     (a)  either:

                              (i)  if your acquisition from the other entity was a * creditable acquisition—the amount of the input tax credit entitlement for the acquisition; or

                             (ii)  if your acquisition from the other entity would have been a creditable acquisition but for a reason to which subsection (3) applies—the amount that would have been the amount of the input tax credit entitlement for the acquisition had it been a creditable acquisition;

                            taking into account any other * adjustments that arose, or would have arisen, relating to the acquisition; and

8  Paragraph 134-10(2)(b)

After “entitled”, insert “, or would (but for a reason to which subsection (3) applies) have been entitled,”.

9  Subparagraph 134-10(2)(b)(ii)

After “adjustments”, insert “that arose, or would have arisen,”.

10  At the end of section 134-10

Add:

             (3)  This subsection applies to the following reasons why your acquisition of the thing from the other entity was not a * creditable acquisition:

                     (a)  you and the other entity are * members of the same * GST group;

                     (b)  you and the other entity are members of the same * GST religious group;

                     (c)  you are the * joint venture operator for a * GST joint venture, and the other entity is a * participant in the GST joint venture.

             (4)  However:

                     (a)  paragraph (3)(a) does not apply if you and the payer are * members of the same * GST group when the payment referred to in paragraph (1)(a) is made; and

                     (b)  paragraph (3)(b) does not apply if you and the payer are members of the same * GST religious group when that payment is made.

11  At the end of Division 134

Add: