The Australian Tax Office (ATO) website has information on what to do when you find you have a GST error correction to make – and how to put it right in a way that is easier than revising a prior statement, as well as avoiding penalties (you see!… the ATO is really NOT your business enemy!)
If you make a mistake (that fits the definition of a GST error) when reporting GST on an activity statement, you can correct that error on a later activity statement if you meet certain conditions.
The benefit of correcting a GST error on a later activity statement is that you will not be liable for any penalties or general interest charge (GIC) for that error.
Generally, it is easier to correct a GST error on a later activity statement than to revise an earlier activity statement. Revising an earlier activity statement that contains an error can incur penalties or GIC.
Here are a series of links about correcting GST errors –
- Definition of a GST error – A GST error is a mistake you made in working out your GST net amount on your activity statement that would, if it was the only mistake that you made, result in you reporting or paying too much GST (credit error) or reporting or paying too little GST (debit error).
- Correcting GST errors
- Completing your activity statement to correct GST errors – To correct a GST error, you include the correction amount at boxes 1A or 1B. If the net result of the error(s) is that you have paid too little GST include the amount at 1A, alternately if the net result is that you have overpaid GST include the amount at 1B. You may also reflect the correction at boxes G1, G2, G3, G10 or G11 as appropriate.
- GST errors that cannot be corrected on a later activity statement
- Revising an earlier activity statement – eg when you aren’t allowed to correct in later statement
- GST definitions
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