Business activity statements (BAS) may require adjustments from time to time if their net GST liability changes or is incorrect.
An adjustment needs to be made in the event that your GST payable or credit attributed in a previous tax period becomes incorrect.
The following are the situations which may require you to make an adjustment:
• the price of a sale or purchase is changed,
• the cancellation of a taxable sale you made, or a purchase for which you can claim a GST credit,
• bad debt write-off or recovery,
• making or receiving a third-party payment, and
• the GST-exclusive value of your purchase is more than $1,000, and the actual use of your purchase (to make input-taxed sales or for private purposes) differs from your intended use.
The ATO requires you to make and issue adjustment notes to a purchaser in the case that you make a taxable sale and the price of the sale changes, the purchaser asks you for an adjustment note, or you become aware of a change and have already issued a tax invoice for the original sale. Adjustment notes must be issued no more than 28 days after such circumstances.
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