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02 Aug 12 Technical Discussion Paper: GST treatment of recovered dishonoured payment costs - TDP 2012/1

On 1 August 2012, the ATO issued draft Technical Discussion Paper TDP 2012/1 entitled "GST treatment of recovered dishonoured payment costs". Comments on the paper are sought by 29 August 2012.

This paper considers the GST treatment of costs being recouped by a supplier when payment by a customer for a supply is dishonoured, resulting in the supplier incurring dishonoured fees from their financial provider which fees and associated costs are then recovered from their customer.

Goods and Services Tax Advice Tax Practitioner Partnership GSTA TPP 065 provides the current ATO view on the GST treatment of on-charged dishonour fees. Publicly available information suggests different GST treatment approaches are being employed to account for such payments for the purposes of the GST law. This paper invites comment on the correct GST treatment for on-charged dishonour fees.

The ATO states that the paper is not a publication that has been approved to allow taxpayers to rely on it for any purpose and is not intended to provide them with advice or guidance, nor does it set out the ATO's general administrative practice. Therefore, this paper does not provide protection from primary tax, penalties or interest for any taxpayer that purports to rely on any views expressed in it.


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