Commonwealth Consolidated Acts

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Writing off bad debts (taxable supplies)

             (1)  The amount of a * decreasing adjustment that you have under section 21-5, relating to a * taxable supply that is * taxable at less than 1 / 11 of the price, is worked out under this section and not under section 21-5.

             (2)  This is how to work out the amount:

Method statement

Step 1 .   Work out the amount of GST (if any) that was payable on the supply, taking into account any previous * adjustments for the supply. This amount is the previous GST amount .

Step 2 .   Add together:

               (a)     the amount or amounts written off as bad from the debt to which the decreasing adjustment relates; and

              (b)     the amount of the debt that has been * overdue for 12 months or more (other than amounts already written off).

Step 3 .   Subtract the step 2 amount from the * price of the supply.

Step 4 .   Work out the amount of GST (if any), taking into account any previous * adjustments for the supply (but not adjustments relating to bad debts or debts overdue), that would be payable on the supply if the * price of the supply were the step 3 amount. This amount of GST is the adjusted GST amount .

Step 5 .   Subtract the adjusted GST amount from the previous GST amount.

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