18 May 06 GST for security deposits and part-payments
The ATO has published a factsheet entitled "GST for security deposits and part-payments". It notes that the ATO has recently issued GST Ruling GSTR 2006/2 (GST: deposits held as security for the performance of an obligation) which is stated to apply from 1 July 2000. However, industry has asked the ATO for more time so they can review their processes so as to comply with the ruling.
In order to assist industry, the ATO advises that it will allow until 30 June 2006 for industry to complete their review and adjust their processes accordingly. Taxpayers must adjust their systems and correctly attribute GST from 1 July 2006. If they have “on-hand part payments” that they received before 1 July 2006 that they have incorrectly treated as security deposits, they can attribute GST in one of two ways:
- attribute GST payable in the tax period that would apply under their current practices, or
- attribute GST payable in respect of all “on-hand payments” in the June 2006 tax period.