GST - Non-reviewable contracts

In order not to disadvantage businesses that had entered into contracts before the GST was implemented, the GST laws contain some transitional rules for contracts that could not be reviewed and extended to accommodate the GST. Where a contract was entered into before 8 July 1999 (2 December 1998 if the recipient is not entitled to full input tax credits), goods and services are regarded as GST free until such time as an opportunity arises to review the contract.

However, the GST free transitional allowances cease on 30 June 2005, even if no review opportunity has arisen. Under recent changes to the GST law, a process is now available for suppliers affected by these contracts to negotiate with customers in order to include the impact of GST. If you have any remaining contracts affected by these transitional rules, please contact us to discuss the action you should take before 30 June 2005.

Published : 7 June 2005