How Do I Adjust The GST On My BAS?

You may need to make adjustments that increase or decrease the net amount of GST you're liable to pay for a reporting period.

You may have an adjustment if one of the following occurs:

• An event that has the effect of changing the price of a sale or a purchase -
• For example, you provide a discount to a customer or receive a rebate from a seller
• A taxable sale you made, or a purchase you're entitled to a GST credit for, is cancelled (for example, where goods are returned)
• You write off a bad debt or you recover a previously written-off bad debt
• Your actual use of a purchase or importation for business purposes differs from your
• intended use.

 

There are also other circumstances where you may be required to make an adjustment, such as when you:

• Cease registration
• Sell something you used for making financial supplies.

 

How do I make an Adjustment to the BAS?

An [Adjustments] button is included in the Report Options. Click on the button to record the GST inclusive totals of any Adjustments. There are three rows -for increasing, decreasing and private use adjustments. The row you use will allocate the adjustments to the appropriate box on the GST Report.

Increasing adjustments are those that either increase your GST payable or decrease your entitlement to input tax credits. For example, if the amount for a sale has increased and you have included the lower amount at G1 on your Business Activity Statement (current or previous).

Increased adjustment amounts will appear in G7 on the GST Report

Decreasing adjustments either decrease your GST payable or increase your entitlement to input tax credits. Examples are cancellation of a sale, discounts given for early payment, bad debts that have previously been included at G1 etc.

Decreased adjustment amounts will appear in G18on the GST Report.

The decreased adjustment amounts will then affect the G20 figure on the GST, which appears as 1Bon the BAS report.

The Tax Office has instructed that if your increasing adjustments exceed your

decreasing adjustments then you include the net amount as an increasing

adjustment. On the other hand, if your decreasing adjustments exceed your increasing adjustments then you include the net amount as a decreasing adjustment. You do not use both boxes.

Private Use adjustments relate to purchases where you are not entitled to input tax credits because they are either used for private or domestic purposes; or are not tax deductible for income tax purposes.

For example, if your logbook indicates that your motor vehicle has 30% private use, then you would include 30% of your motor vehicle expenses (including GST) in box G15.

Please note that your adjustments must be GST Inclusive.

For more information on adjustments, refer to the Tax Office Business Activity Statement Instructions, which also provide several worksheets that you can use in your calculations.

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