Extra GST linked to invoice, payment

Press, 12 June 1989, Page 2

Extra GST linked to invoice, payment

By PATTRICK SMELLIE in Wellington Successfully dodging the extra 2.5 per cent of GST due from July 1 will depend on the date on which goods and services are either paid for or invoiced. The date of supply or delivery will not be relevant, unlike the transitional provisions when GST was introduced in 1986.

According to the Tax Education Office: "With regard to the July rate change, the relevant question is — when were the goods or services invoiced or paid for? “In most cases, goods or services either invoiced or paid for on or before June 30 will have GST charged at 10 per cent.

“The 10 per cent rate will apply even if the goods are actually supplied or the services are actually performed after that date,” the office said.

“An important exception to the normal rule is lay-by sales. These will be subject to the 12.5 per cent rate unless payment is paid before July 1.” The office advised people having costly services supplied or acquiring substantial items over the July 1 period to check their circumstances before June 30 to be sure where they stood. Under the system, goods and services supplied and performed in June but not paid for or invoiced until July would be subject to 12.5 per cent GST. But if the goods or services were invoiced in June, but not paid for until July, they would still only attract 10 per cent GST.

A hire-purchase agreement signed before July 1 would be subject to 10 per cent GST.