On 10 February 2010, Tax Laws Amendment (2010 GST Administration Measures No. 1) Bill 2010 was introduced into the House of Representatives. The following is an extract from the Explanatory Memorandum:
SCHEDULE 1 to the Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure that the appropriate amount of goods and services tax is collected and the appropriate amount of input tax credits claimed in situations where there are payments between parties in a supply chain, which indirectly alter the price paid or received by the parties for the things supplied, but for which an adjustment does not presently arise because the parties are not directly involved in a supply from one to the other. This measure has effect on and from 1 July 2010.
SCHEDULE 2 to the Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to clarify that until the expiry of the relevant limitation period, input tax credits may always be claimed in the current tax period. This measure has effect on and from 1 July 2010.
Both measures were announced in the then Assistant Treasurer’s Media Release No 042 of 12 May 2009.
In media release No 2010/023, 10 February 2010, the Assistant Treasurer, Senator Nick Sherry, commented on the changes made by the Bill. The Minister said:
"The Bill implements two further recommendations made by the Board of Taxation in its review of GST administration, namely:
- clarifying that input tax credits can be taken into account in later tax periods; and
- allowing GST adjustments for third party payments.
Submissions to the Board raised concerns the current law on input credits was ambiguous in particular circumstances. Today's Bill will remove any doubt that the law applies as intended by confirming that the rule allowing attribution in the current period applies to all input tax credits...
The amendment in relation to third party payments will ensure manufacturers' rebates, which in effect change the price of a transaction, result in adjustments for the payer and the third party, reflecting the economic outcome of the transaction."