I am seeking some confirmation from our tax community about following understanding: when an entity lodges June 2020 quarter BAS, including $6,000 of net GST payable, $15,000 PAYG tax withholding and $1,000 PAYG instalment, and receives cash flow boost 1 of $15,000 to offset PAYG tax withholding payable and cash flow boost 2 of $12,500 to offset the remaining tax of $7,000 (net GST payable + PAYG instalment), the entity does not have franking credits arisen as $1,000 from PAYG installment in its franking account because the entity did not actually pay that $1,000. I checked Division 205 of ITAA 97 and it says “a credit of PAYG installment amount arises on the day on which the payment is made”. Is my understanding correct?
Hope I made myself clear and looking forward to any confirmation.
The concept of “pays a PAYG instalment” is dealt with in s.205-20 which includes there being firstly a liability to pay a PAYG instalment and then actual payment or a credit being applied against the liability.