Based in Tauranga and specialising in quality business advice and income tax return preparation at an affordable price
Malcolm Webster Limited - Chartered Accountants

GST Time of Supply

The GST rate increased from 12.5% to 15% on 1st October 2010.  Please note that when claiming a GST input tax credit in a later period, the rate of GST to use is the one that applies to the original transaction.

Example: Callum buys a trailer for his contracting business on 13 July 2010 for $1,800 GST- inclusive (at 12.5%) and pays for it that day on his personal credit card.  Imagine December 2010, and that Callum is looking over his old GST returns, and notices that he hasn’t claimed for the GST on the trailer.

Callum will need to make a credit adjustment in the next GST return to claim the original input tax credit of $200.00. He can only claim the GST at 12.5% as this was the rate when the time of supply occurred.

 

If you receive a tax invoice at 12.5% after you've closed off your GST return, you can still make a late claim for the expense.

Example: In December 2010, Callum also receives in the mail an invoice dated 18 Sept 2010 for $200-GST inclusive for some business artwork.  There is an attached apology from the supplier, who had mislaid some outgoing mail.  Callum pays the supplier the next day.  Callum returns his GST on a payments basis, but when he does his next return, he can only claim GST at the relevant rate, which is 12.5% on that payment, but at 15% on other current GST-inclusive transactions.