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128 Riccarton Road
Christchurch
New Zealand
Ph: (03) 341 2013
Fax (03) 341 2016
0800 650 585 (outside Christchurch)
    

Goods and Services Tax – Up it Goes

On 1 October 2010 GST will increase to 15% which will produce both
challenges and opportunities for businesses. Gone is the simple tax
fraction of 1/9th.  As of 1 October to calculate the GST component
of the GST inclusive price, you’ll need to multiply by 3 then divide by
23 or alternatively simply divide by 7.66666.

There are many transitional issues that may affect your calculation
of GST payable as a result of the rate increase.  Here are the big
ones:

        in place prior to 20 May 2010 (budget 
        night), payments received prior to 1 
        October 2010 can be accounted for at 
        the old rate of 12.5%, but must be 
        accounted for in the 30th September
        GST return.  All remaining layby sales,
        where the goods are uplifted after 30 
        September, will attract the 15% GST
        rate.
1.
















2.   		 Every business that is
registered on the payments
(cash) basis will need to
make a GST rate increase
change adjustment based
on the difference between
creditors and debtors in the
30 September GST return.
For this reason, it’s very
important that you keep
accurate records of what’s
owing to your business from
customers (debtors) and
what your business owes to
suppliers (creditors) as at
that date.

If your GST return period
straddles 1 October, for
example you file a two
monthly return for the period
September – October, you’ll


  3.  






  

  
  4.




  

  5.  
 		 need to complete a GST
transitional return (GST 104A).

Whether land sales attract
GST at 12.5% or 15% will
depend on whether the time
of supply has been triggered
prior to 1 October 2010.  If
you have a land transaction
that may span 1 October,
you'll need specific advice
from us.

Whether payments received
under construction contracts
will attract GST at 12.5% or
15% once again will depend
on the time of supply. Please
contact us.

If you sell goods on layby, as
long as a binding contract was


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Our location - 128 Riccarton Road, PO Box 8535 Riccarton, Christchurch.