Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013

Administered by Department of the Treasury

Legislation au F2013L01602 Not in force Legislative Instrument

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Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013  

 

Explanatory Statement

 

General Outline of Instrument

1. This instrument is made under section 29-75 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act).

2. The purpose of this instrument is to update the existing legislative instrument A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012 (F2012L00769).

3. The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

Date of effect

4. The instrument is taken to have commenced on 1 July 2010.

5. The instrument will apply retrospectively.

6. The instrument is amending the existing legislative instrument for clarification purposes.

7. If the amendments to the existing legislative instrument were not applied retrospectively, then it is possible that some taxpayers may be adversely impacted in that they will not be able to apply the provisions to their circumstances. As such, the instrument applies retrospectively to ensure that taxpayers will not be disadvantaged by the amendments to the existing legislative instrument.  The effect of the legislative instrument is to the advantage of affected parties.  Under section 12(2) of the Legislative Instruments Act 2003 this instrument does not adversely affect the rights or liabilities of any person other than the Commonwealth.

 

What this instrument is about?

8. The purpose of this instrument is to update the existing legislative instrument A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012.

9. This instrument amends the existing legislative instrument to ensure that the effect of paragraphs 5(1)(g), 5(2)(g) and subclause 5(4) is applied consistently.

 

What is the effect of this instrument?

10. The effect of this instrument is that the operation of the existing legislative instrument will be clarified.

11. Compliance cost impact: No change/low - minor or machinery in nature. A compliance cost assessment indicates a minor impact to both implementation and on-ongoing compliance costs.   

 

Background

12. Under subsection 29-75 of the GST Act, the Commissioner may determine in writing additional information requirements that must be satisfied for a document to be an adjustment note under subsection 29-75(1). 

13. Amendments have been made to paragraphs 5(1)(g) and 5(2)(g) to confirm that an adjustment note only needs to specify the change in the price of a supply where there has in fact been a change. It also clarifies that for partly taxable supplies the adjustment note can either identify the change to the price of the whole supply, or the change to that part of the price referable to the taxable component.   

14. The amendments to subclause 5(4) of the existing instrument clarify that a document issued by an entity to another entity is an adjustment note if the requirements in subclause 5(4) are met. Existing subclause 5(4) only applies to the entity in receipt of the document, and not the entity issuing the document. Pursuant to this amendment, if the requirements are met the document is an adjustment note for the purposes of both the supplier and the recipient.

15. The amendments to the existing instrument are required to ensure it applies consistently to entities.

 

Consultation

16. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law. Consultation in relation to the existing legislative instrument was held prior to its registration. However, no other consultation was undertaken in relation to the development of this instrument as it is considered minor or machinery in nature, and does not substantially change the law.

 

 

 

James O’Halloran

Deputy Commissioner of Taxation

 

Dated: 20 August 2013

____________________________________________________________________

 

Legislative references:

 

A New Tax System (Goods and Services Tax) Act 1999

Legislative Instruments Act 2003


Statement of Compatibility with Human Rights

 

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

 

This instrument updates the existing legislative instrument A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012 to clarify its operation. The amendments to the existing instrument clarify that a document issued by an entity to another entity is an adjustment note if the requirements in clause 5(4) are met.  Further amendments have been made to confirm that for partly taxable supplies, the difference in the price of a supply needs to be clearly ascertainable from the document.

The instrument applies retrospectively to ensure that taxpayers will not be disadvantaged by the amendments to the existing legislative instrument.  The effect of the instrument is to the advantage of affected parties.

 

Human rights implications

 

On an assessment of the compatibility of this Legislative Instrument with the seven core international human rights treaties to which Australia is a party, it has been determined that this instrument does not engage any of the applicable rights or freedoms because the instrument is minor or machinery in nature.

 

Conclusion

 

This legislative instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

James O’Halloran

Deputy Commissioner of Taxation

 

 

Overview

The Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013 was enacted under section 29-75 of the A New Tax System (Goods and Services Tax) Act 1999, and its purpose is to amend the existing A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012 for clarity and consistency in application. This legislative instrument, determined by the Commissioner of Taxation, updates the requirements for documents to be considered adjustment notes under the GST Act. The primary objective of this amendment is to ensure that the information requirements are applied uniformly across all entities, thus preventing any potential disadvantages to taxpayers due to the retrospective application of these amendments. The instrument was deemed minor or machinery in nature, and no further consultation was considered necessary as it does not substantially alter the law. The amendments aim to clarify the requirements for adjustment notes, particularly in relation to the specification of price changes in partly taxable supplies and the applicability of the requirements to both issuing and receiving entities.

Scope and Application

The Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013 is a legislative instrument made under section 29-75 of the A New Tax System (Goods and Services Tax) Act 1999, updating the 2012 Determination to clarify certain requirements regarding adjustment notes for goods and services tax. It applies to entities involved in the supply of goods and services, particularly those issuing adjustment notes to reflect changes in the price of a supply. The instrument has a Commonwealth reach, as it is made under federal legislation. It is designed to ensure consistency in how adjustment notes are applied and understood, particularly concerning partly taxable supplies and the identification of price changes. The instrument applies retrospectively to ensure that taxpayers are not disadvantaged by the amendments, thereby providing a benefit to those affected by clarifying the requirements for adjustment notes. The instrument does not include specific exclusions or exemptions beyond the clarification of the existing requirements, and it extends the application of the 2012 Determination to both issuing and receiving entities, aligning the obligations and rights under clause 5(4).

Key Provisions

The Goods and Services Tax: Adjustment Note Information Requirements Amendment Determination 2013 amends the existing legislative instrument, the A New Tax System (Goods and Services Tax) Adjustment Note Information Requirements Determination 2012, to clarify its operation. Section 5(1) and 5(2) of the amended determination specify that an adjustment note must detail the change in price of a supply only if there has been an actual change. For partly taxable supplies, the adjustment note can specify either the change in price of the entire supply or the change in price referable to the taxable component (section 5(1)(g) and 5(2)(g)). Section 5(4) of the amended determination clarifies that a document issued by one entity to another is considered an adjustment note if it meets the requirements outlined, affecting both the issuer and the recipient (section 5(4)). The obligations imposed by the Amendment Determination require entities to ensure that any adjustment notes they issue meet the updated requirements. This includes verifying that any price changes are accurately reflected and that the notes are clear and specific enough to differentiate between taxable and non-taxable components where applicable. Entities must also ensure that the adjustment notes they issue meet the criteria specified in section 5(4) to be considered valid from both the issuer's and the recipient's perspectives. There are no explicit offences, penalties, or consequences outlined in the Amendment Determination itself. However, the underlying legislation, the A New Tax System (Goods and Services Tax) Act 1999, provides for various penalties for non-compliance with GST requirements. For example, section 28-10 of the GST Act imposes a penalty of 25% of the GST shortfall for failing to provide correct and complete information on tax invoices and other documents. The maximum penalty for serious or repeated non-compliance can be significant, including substantial fines and potential criminal charges in cases of fraudulent behaviour. Entities must therefore ensure strict compliance with the requirements to avoid these penalties.

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