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Accruals calm GST lay-by fears

SMALL businesses that use an accrual accounting basis for GST will be far better placed in regards to lay-bys following a

ruling by Tax Commissioner Michael Carmody.

Effectively, the ruling defers accounting for GST payable under a lay-by until the tax period in which the final lay-by

instalment is received.

Small Business Dev-elopment Corporation managing director George Etrelezis said this was a bonus for retailers.

“Until this ruling, retailers had expected to be liable for the total GST on the sale at the time of the first lay-by instalment,” Mr Etrelezis said.

“The cash flow benefit of this change is important to many retailers who transact sales under the lay-by system.”

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