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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 134.5

Decreasing adjustments for payments made to third parties

             (1)  You have a decreasing adjustment if:

                     (a)  you make a payment to an entity (the payee ) that acquires a thing that you supplied to another entity (whether or not that other entity supplies the thing to the payee); and

                     (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

                     (c)  the payment is in one or more of the following forms:

                              (i)  a payment of * money or * digital currency;

                             (ii)  an offset of an amount of money or digital currency that the payee owes to you;

                            (iii)  a crediting of an amount of money or digital currency to an account that the payee holds; and

                     (d)  the payment is made in connection with, in response to or for the inducement of the payee's acquisition of the thing; and

                     (e)  the payment is not * consideration for a supply to you.

          (1A)  However, subsection (1) does not apply if:

                     (a)  the supply of the thing to the payee is a * GST-free supply, or is not * connected with the indirect tax zone; or

                     (b)  the Commissioner is required to make a payment to the payee, under Division 168 (about the tourist refund scheme), related to the payee's acquisition of the thing;

and you know, or have reasonable grounds to suspect, that the supply of the thing to the payee is a GST-free supply or is not connected with the indirect tax zone, or that the Commissioner is so required.

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

                     (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

                     (b)  the amount of GST that would have been payable, or would (but for a reason to which subsection (3) applies) have been payable, for that supply:

                              (i)  if the * consideration for the supply had been reduced by the amount of your payment to the payee; and

                             (ii)  taking into account any other adjustments that arose, or would have arisen, relating to the supply, as they would have been affected (if applicable) by such a reduction in the consideration.

             (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.



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