1. Amendments to filed GST returns
If a taxpayer with a turnover of up to $250,000 p.a. finds he made an error and underpaid GST in previous GST return. If the error will result in $200 or less of tax to pay, it can be corrected in the next available GST return. For taxpayer with turnover of over $250,000 p.a., the error can be up to $500. The omission of an input tax claim can usually be rectified by including the claim in the next GST return.
IRD may issue an assessment, or an amended assessment, of the amount of GST payable. IRD can do this if they are not satisfied with a filed return, or a person fails to file GST return. The assessment can be based on the information supplied in return and on any other information in IRD’s possession.
2. GST on associated person
The GSTA contains specific rules to ensure the supplies between associated persons are at arm’s length (s 2A). These rules require associated persons to deal with each other at market value and not manipulate the price between them to obtain a GST advantage(s 10(3)). Likewise, the time of supply for associated persons is determined when the goods are supplied by a registered person from an associate (normally it is determined at the time when the payment is made or an invoice is issued). The amount of any input tax credit that may only be claimed is limited to the amount of GST paid by the associated person.