CA ANZ recently provided feedback to Inland Revenue on PUB00352: Changing GST treatment after reducing the previously agreed consideration.

This draft Question We’ve Been Asked considers how the GST treatment of a supply can be adjusted if a supplier accounted for output tax incorrectly and subsequently reduces the previously agreed consideration for a supply.

We have disagreed with the position taken in the draft.  In our view, a credit note may be issued where there has been a change in GST treatment (for example, GST is incorrectly charged on a zero rated supply).  The amount of the adjustment should be the amount of GST that was charged incorrectly.