Question

A business lodges its BAS, claiming a refund of $1,765. When the refund is received the actual amount refunded is $1,798. Why would this happen and how should this refund be processed and recorded? (Within Australian Taxation Environment) (80–100 words)(Please type up your answer)

Answer 1

The amount increases while getting the actual refund. It happens because of adding interest. The difference is the interest amount; (1798 – 1765 =) $33. A refund is claimed when the required return is submitted. The tax authority used to pay interest, since there is a gap between the dates of return and actual refund. This is based on the number of days making delay for actual payment with a consideration of an interest rate.

The refund should be done by transferring the whole amount, $1,798, to the taxpayer’s bank account and by a record of actual refund of $1,765 and interest of $33.