Goods and Services Tax: Particular Attribution Rules for Lay-By Sales Determination 2017

Administered by Department of the Treasury

Legislation au F2017L00429 In force Legislative Instrument

Legislation content

Explanatory Statement

Goods and Services Tax: Particular Attribution Rules for Lay-By Sales Determination 2017
 

General outline of this determination

  1. This determination is made under subsection 29-25(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
  2. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such statement.
  3. This determination sets out particular attribution rules for GST payable on a taxable supply made under a lay-by sale agreement and for an input tax credit arising from a creditable acquisition made under a lay-by sale agreement.
  4. This determination is a legislative instrument for the purposes of the Legislation Act 2003.

Date of effect

5.      This determination will commence retrospectively on 1 April 2017. This is to allow for reasonable and appropriate consultation to be completed.

6.      Subsection 12(2) of the Legislation Act 2003 allows a retrospective application date for a legislative instrument. This determination aims to reduce compliance costs.  A commencement date after 1 April 2017 would create unexpected compliance obligations for the intervening period. To provide certainty to taxpayers who have relied upon the previous determination and continue to rely on this determination and protect the rights of all affected taxpayers the retrospective application date is reasonable and appropriate. The retrospective application date will not adversely affect the rights of any person and will not impose a liability on any person for any act or omission before this instrument’s registration date.
 

What is the determination about?

7.      Sections 29-5 and 29-10 of the GST Act set out the rules for attributing GST and input tax credits on your supplies and acquisitions.

8.      Under section 29-25 of the GST Act the Commissioner may determine particular attribution rules in certain circumstances. One circumstance, set out in paragraph 29‑25(2)(b) of the GST Act is where there is a supply or acquisition for which payment is made or an invoice is issued, but use, enjoyment or passing of title will, or may, occur at some time in the future.

9.      The determination provides rules for attribution of GST and input tax credits when you make taxable supplies or creditable acquisitions under a lay-by sale agreement.  

What is the effect of this determination?

10.  The GST payable by you on a taxable supply of goods that you make under a lay-by sale agreement is attributable to the tax period in which the final instalment of consideration is received. This applies only if you do not account on a cash basis.

11.  The input tax credit to which you are entitled for a creditable acquisition of goods that you make under a lay-by sale agreement is attributable to the tax period in which you provide the final instalment of consideration. This applies only if you do not account on a cash basis.

12.  This determination is substantially the same as the previous determination that it replaces. An entity that satisfied the requirements of the previous determination will satisfy the requirements of this determination.

13.  Compliance cost impact:  Minor – there will be no or minimal impact for both implementation and ongoing compliance costs. The determination is minor or machinery in nature.

Background

14.  This determination replaces A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Lay-By Sales) Determination (No 1) 2000 – F2006B11600 registered on 20 November 2006 (previous determination). The previous determination is repealed from 1 April 2017.

Consultation

15.  Subsection 17(1) of the Legislation Act 2003 requires, before the making of a determination, that the rule-maker is satisfied that appropriate and reasonably practicable consultation has been undertaken.

16.  Broad consultation has been undertaken. The draft determination and draft explanatory statement were published on the ATO Legal database at ato.gov.au seeking feedback and comments for a period of two weeks. Notice of the draft determination was also published to ato.gov.au and subscription alerts issued. Tax professionals and tax associations regularly review both the Legal database and ato.gov.au and further promulgate advice of new drafts issued in their internal news bulletins. The major legal publishers also publish news of the drafts in their key tax alerting services - such as the Weekly Tax Bulletin (published by Thomson Reuters Australia) and Tax Tracker and Tax Week (published by CCH Australia).  Additionally, draft determinations and draft explanatory statements have been published on the ATO Consultation Hub.  Links to these drafts were published in newsletters such as the Taxation News (Chartered Accountants Australia and New Zealand) weekly bulletin. No comments have been received to date.

 

 

Legislative references:

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

Acts Interpretation Act 1901

Legislation Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

 


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: Particular Attribution Rules for Lay-By Sales Determination 2017

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 legislative instrument provides further rules on how to attribute the GST payable and input tax credits on a taxable supply or creditable acquisition made under a lay‑by sale agreement.

 

Human rights implications

This legislative instrument does not engage any of the applicable human rights or freedoms. It allows for the attribution of GST payable and input tax credits for taxable supplies and creditable acquisitions made via lay-by sale agreements.

 

Conclusion

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

Overview

The Goods and Services Tax: Particular Attribution Rules for Lay-By Sales Determination 2017 was introduced to address the need for specific rules regarding the attribution of GST and input tax credits for lay-by sales under the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Enacted by the Australian Government, the determination aims to provide clarity and reduce compliance costs for entities involved in lay-by sales, where payment is made or an invoice is issued, but the use, enjoyment, or passing of title occurs at a future date. This legislative instrument, made under subsection 29-25(1) of the GST Act, ensures that GST payable on a taxable supply under a lay-by sale agreement is attributable to the tax period in which the final instalment of consideration is received, while the input tax credit for a creditable acquisition is attributable to the tax period in which the final instalment of consideration is provided. The determination, which is minor in nature, seeks to maintain consistency with previous rules and ensure no unexpected compliance obligations arise for taxpayers.

Scope and Application

The Goods and Services Tax: Particular Attribution Rules for Lay-By Sales Determination 2017 is a legislative instrument made under the authority of the A New Tax System (Goods and Services Tax) Act 1999. It applies to entities making taxable supplies or creditable acquisitions under lay-by sale agreements, which are agreements where the customer makes periodic payments for goods with final delivery pending the complete payment. The determination outlines specific rules for attributing GST liability and input tax credits in relation to these lay-by transactions. It applies nationally across Australia, and its rules are effective from 1 April 2017. The determination is designed to clarify and simplify the attribution of GST and input tax credits in the context of lay-by sales, ensuring that entities do not face unexpected compliance obligations or liabilities for transactions occurring before the determination's effective date. There are no stated exclusions or exemptions within the determination itself, though any further elaboration or modification could potentially be introduced through subordinate instruments.

Key Provisions

The Goods and Services Tax: Particular Attribution Rules for Lay-By Sales Determination 2017 (the Determination) provides specific rules regarding the attribution of GST payable and input tax credits in relation to lay-by sales. These rules are crucial for businesses and consumers engaged in lay-by arrangements where payment is made or an invoice is issued, but the goods are not yet in the possession of the buyer (sections 29-5, 29-10, 29-25). Specifically, section 10 of the Determination states that the GST payable on a taxable supply under a lay-by agreement is attributable to the tax period in which the final instalment of consideration is received, provided the business does not account on a cash basis. Similarly, section 11 indicates that the input tax credit for a creditable acquisition under a lay-by agreement is attributable to the tax period in which the final instalment of consideration is provided, again provided the business does not account on a cash basis. Businesses and entities involved in lay-by sales must comply with these attribution rules to ensure accurate reporting and compliance with GST obligations. They must attribute the GST payable or input tax credits to the correct tax period as outlined in the Determination. This involves careful record-keeping and accounting practices to ensure that the timing of payments and acquisitions aligns with the rules set out in sections 10 and 11. Failure to comply with the provisions of this Determination may lead to various consequences. Although the Determination does not explicitly detail specific penalties or offences, non-compliance with GST rules generally can result in civil or criminal penalties under the GST Act. For example, section 157 of the GST Act may impose penalties for incorrect statements or omissions, and section 161 may impose penalties for failing to lodge a GST return. Additionally, persistent or deliberate non-compliance may result in criminal charges under section 162 of the GST Act, which can lead to fines and imprisonment. The exact penalties depend on the nature and extent of the non-compliance, but businesses should ensure they adhere to the rules to avoid these potential consequences.

Legal classification tags

Area of Law
Taxation Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Commencement Provisions
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.