Published on 01 Aug 06
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
It is not uncommon for a vendor in a contract for the sale of valuable items to require a purchaser to provide a deposit following execution of the contract. Where the transaction proceeds to completion, Division 99 of the A New Tax System (Goods and Services Tax) Act 1999 applies such that the deposit becomes part of the purchase price. However, where the contract is rescinded due to the purchaser’s default and the vendor retains the deposit, the application of the GST Act to the forfeited deposit is unclear.
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