I’m not sure whether it’s the really bad weather or a general lack of excitement but the imminent GST rise on 1 October so far doesn’t seem to have got people rushing to the malls for bargains.

Perhaps the wave will come through this weekend, along with daylight saving. Putting our clocks forward an hour for some reason seems like a sign summer is just about here. Heck, I’d settle for spring!

Yesterday I took a walk around Queen Street and some of the stores promoting pre-GST increase sales seemed to be a little busier than they typically are on a Monday lunch time. I suppose the increase means around an extra $22 of tax for every $1,000 you spend so there’s money to be saved.

The new transitional rules passed by Parliament recently give some breathing space to businesses trying to process September transactions.

One of the rules is really interesting because for the first time I can recall it actually specifically authorises back dating of a tax document. In certain circumstances provided a business issues an invoice to a customer before 11 October and payment is due within 60 days the trader can back date the invoice to 30 September and apply the 12.5% rate rather than 15%.

I actually thought this was quite a remarkable rule. Supposedly it’s to allow businesses to process their September transactions as many won’t close their accounts for the month until a week or two into October. Fair enough, but I’ve seen the IRD take very strong issue with any suggestion of backdating of documents and here enshrined in legislation is specific permission to do so.

One of the conditions the trader has to satisfy to take advantage of this is that they issue the invoice “consistently with (their) practice of issuing invoices for such supplies”. It’s not clear whether this is talking about “how” they usually issue invoices or “when”. On one hand it could mean the trader can’t take advantage of this rule unless it is their practice to back date invoices. On the other, it could mean if they usually send out September invoices in the first two weeks of October they can apply the rule even if they usually date those invoices in October. In other words, is it a permission to back date invoices or can you only use the rule if you usually back date invoices?

No doubt some will test the boundaries of a rule like this. The policy behind it though seems pretty clear. Where goods or services are consumed in September the GST rate should be 12.5% even if the trader issues the invoice after 30 September.


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