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A NEW TAX SYSTEM (GOODS AND SERVICES TAX TRANSITION) ACT 1999 - SECT 15G

Bad debts

  (1)   This section has effect if:

  (a)   you are the recipient of a taxable supply for which the GST is payable by you because of this Division; and

  (b)   the whole or part of the consideration for the supply has not been received by the supplier; and

  (c)   the supplier writes off as bad the whole or a part of the debt, or the whole or a part of the debt has been overdue for 12 months or more.

  (2)   Section   21 - 5 of the GST Act does not apply to the taxable supply.

  (3)   Instead, you have a decreasing adjustment equal to 10% of the amount written off, or 10% of the amount that has been overdue for 12 months or more, as the case requires. However, you cannot have an adjustment under this section if you account on a cash basis.

  (4)   You have an increasing adjustment if:

  (a)   you were the recipient of a taxable supply in relation to which you had a decreasing adjustment under subsection   ( 3); and

  (b)   you subsequently pay to the supplier the whole or a part of the amount written off, or the whole or a part of the amount that has been overdue for 12 months or more, as the case requires.

The amount of the increasing adjustment is 10% of the amount paid.


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