For clarity and certainty vendors and purchasers may wish to include a special condition in the contract regulating GST withholding issues as between themselves. Consultant lawyer to LPLC Derry Davine, has drafted the following.
1. GST withholding
1.1. In this special condition, section references are to Schedule 1 of the Taxation Administration
Act 1953 (Cwth) as amended by Treasury Laws Amendment (2018 Measures No.1) Act 2018
(Cwth) and asterisked terms have the same meanings as when used in that schedule.
1.2. If section 14-255(1) applies to the supply of the property, the vendor must give the
purchaser the written notice required by that section at least seven days before settlement.
1.3. If section 14-250 requires the recipient of supply to withhold an amount (‘withholding sum’)
from the consideration payable to the vendor and pay it to the Commissioner, the
a. complete and lodge such online notification forms as the Commissioner may require to
enable payment of the withholding sum and
b. at settlement, comply with section 16-30(3) by giving the vendor a bank cheque
payable to the Commissioner for the withholding sum or
c. on the settlement date or within such further period (if any) as may be allowed by the
Commissioner, pay the withholding sum to the Commissioner.
except where the purchaser has complied with sub-paragraph b. or settlement has
occurred using an electronic lodgement network operator, the purchaser must provide the
vendor with evidence of payment of the withholding sum as soon as practicable after
1.4. If the purchaser gives to the vendor at settlement a bank cheque payable to the
Commissioner for the withholding sum, the vendor must, on the settlement date or within
such further period (if any) as may be allowed by the Commissioner, pay the bank cheque
to the Commissioner.
1.5. An amount withheld and paid as required by section 14-250 or applied as described in
section 16-30(3) is treated as having been paid to the vendor.
1.6. Except as expressly set out in this special condition, the rights and obligations of the parties
under this contract including, without restriction, any obligation of the vendor to apply the
margin scheme, are unchanged.
1.7. In this special condition, ‘settlement’ means the time when the first *consideration for the
*supply (other than consideration provided as a deposit) is first provided.