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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Tax Laws Amendment (2009 GST Administration Measures) Bill 2009
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Treasurer, the Hon Wayne Swan MP)
Table of contents
Glossary 5
General outline and financial impact 7
Chapter 1 Creating a consistent four-year period for claiming input tax
credits and fuel tax credits 11
Chapter 2 Australian External Territory refund collection system 29
Chapter 3 Agency provisions 39
Chapter 4 Gambling activities by entities outside Australia 45
Chapter 5 Recovering overpaid refunds 49
Chapter 6 GST and associates provisions 57
Index 65
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
|Abbreviation |Definition |
|ATO |Australian Taxation Office |
|Commissioner |Commissioner of Taxation |
|Fuel Tax Act |Fuel Tax Act 2006 |
|GIC |general interest charge |
|GST |goods and services tax |
|GST Act |A New Tax System (Goods and |
| |Services Tax) Act 1999 |
|GST Regulations |A New Tax System (Goods and |
| |Services Tax) Regulations |
| |1999 |
|LCT Act |A New Tax System (Luxury Car |
| |Tax) Act 1999 |
|TAA 1953 |Taxation Administration Act |
| |1953 |
|WET Act |A New Tax System (Wine |
| |Equalisation Tax) Act 1999 |
|WET Regulations |A New Tax System (Wine |
| |Equalisation Tax) Regulations|
| |2000 |
General outline and financial impact
Creating a consistent four-year period for claiming input tax credits and
fuel tax credits
Schedule 1 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999, the Fuel Tax Act 2006, the Income Tax
Assessment Act 1997 and the Taxation Administration Act 1953 to
require that input tax credits and fuel tax credits are claimed
within a four-year period.
Date of effect: This measure applies to goods and services tax
(GST) returns and assessments lodged or issued after 7.30 pm
(Australian Eastern Standard Time) on 12 May 2009 and revisions to
GST returns and revised assessments issued or made after this time.
It also applies to returns and assessments for the purposes of fuel
tax law and amendments to these returns and revised assessments
issued or made on or after 1 July 2010.
Proposal announced: This measure was announced in the then
Assistant Treasurer's Media Release No. 042 of 12 May 2009.
Financial impact: This measure will have an unquantifiable, but
expected to be small, impact on both GST and fuel tax credit
revenue from the 2009-10 years.
Compliance cost impact: Low. This measure will affect a small
proportion of businesses. There is no ongoing compliance cost
impact. The change brings the treatment of input tax credits and
fuel tax credits into line with the existing rules for other GST
and fuel tax credit liabilities and entitlements. There is a small
transitional impact, reflecting the need for affected taxpayers to
learn about and apply the amendment.
Australian External Territory refund collection system
Schedule 2 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 and the A New Tax System (Wine Equalisation
Tax) Act 1999 to allow residents of Australia's External
Territories (such as Norfolk, Cocos (Keeling) and Christmas
Islands) to claim refunds of goods and services tax (GST), or GST
and subsequently wine equalisation tax (WET) under the tourist
refund scheme if they can show proof that the goods have been
exported to their External Territory within the required time after
the goods were acquired.
Date of effect: The scheme will apply to goods purchased on or
after 1 July 2010.
Proposal announced: The Government announced in the 2009-10 Budget
that it would introduce a system under which residents of
Australia's External Territories (such as Norfolk, Cocos (Keeling)
and Christmas Islands) can claim refunds of GST and WET under the
tourist refund scheme if they can show proof of shipping of
exported goods to their External Territory.
This measure was announced in the then Assistant Treasurer's Media
Release No. 042 of 12 May 2009.
Financial impact: The measure will have an unquantifiable, but
expected small cost to revenue.
Compliance cost impact: Implementation of the refund collection
system is expected to result in minor transitional compliance and
administration costs.
Agency provisions
Schedule 3 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) to increase the range of entities
entitled to act as a principal for goods and services tax (GST)
accounting purposes.
The amendments allow entities that facilitate supplies or
acquisitions for another to utilise these simplified accounting
procedures, subject broadly to the principal and intermediary
agreeing that the intermediary will take responsibility for using
these accounting procedures in relation to certain transactions.
The amendments are intended to reduce the compliance costs of GST
accounting where paying agents, billing agents and other
transaction facilitators are used by a principal.
Date of effect: The amendments apply to supplies and acquisitions
by intermediaries made on or after 1 July 2010.
Proposal announced: This measure was announced in the then
Assistant Treasurer's Media Release No. 042 of 12 May 2009.
Financial impact: The cost of the measure is unquantifiable but
expected to be negligible.
Compliance cost impact: The measure is expected to result in a
small decrease in ongoing compliance costs.
Gambling activities by entities outside Australia
Schedule 4 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 to clarify how a gambling operator's margin
is calculated where the supplies made by the operator are GST-free.
The amendments exclude from total monetary prizes amounts that the
gambling operator is liable to pay out on supplies (bets) that are
GST-free. This will mean that the prize money that the gambling
operator is liable to pay to entities outside Australia will be
excluded from total monetary prizes (because supplies made to
entities outside Australia are GST-free).
Date of effect: The amendments apply to monetary prizes that the
operator is liable to pay during or after the first quarterly tax
period commencing on or after Royal Assent.
Proposal announced: This measure was announced in the then
Assistant Treasurer's Media Release No. 042 of 12 May 2009.
Financial impact: Unquantifiable.
Compliance cost impact: Low.
Recovering overpaid refunds
Schedule 5 to this Bill amends the:
. A New Tax System (Goods and Services Tax) Act 1999 so that
an overpaid refund under section 35-5 of that Act is
treated as an amount due and payable from the date of the
overpayment;
. A New Tax System (Luxury Car Tax) Act 1999 so that an
overpaid refund under section 17-5 of that Act is treated
as an amount due and payable from the date of the
overpayment; and
. Fuel Tax Act 2006 so that an overpaid refund under
section 61-5 of that Act is treated as an amount due and
payable from the date of the overpayment.
Date of effect: This measure applies from the start of the first
quarterly tax period after Royal Assent.
Proposal announced: This measure was announced in the then
Assistant Treasurer's Media Release No. 042 of 12 May 2009.
Financial impact: Unquantifiable.
Compliance cost impact: Low.
GST and associates provisions
Schedule 6 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) to ensure the goods and services
tax (GST) treatment of a supply to an associate without
consideration is as an input taxed supply, a GST-free supply, or a
financial supply where appropriate.
The proposed amendments also ensure that a supply to an associate
that would be a sale (or some other particular kind of supply) if
made for consideration will be taken to be such a supply despite
there being no consideration. Similarly, an acquisition from an
associate that would be by way of sale (or some other particular
means) if consideration was provided will be taken to be such an
acquisition despite there being no consideration.
Date of effect: These provisions take effect from the date of
Royal Assent.
Proposal announced: This measure was announced in the then
Assistant Treasurer's Media Release No. 042 of 12 May 2009.
Financial impact: Unquantifiable.
Compliance cost impact: Low.
Chapter 1
Creating a consistent four-year period for claiming input tax credits and
fuel tax credits
Outline of chapter
1. Schedule 1 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act), the Fuel Tax Act 2006 (Fuel Tax
Act) , the Income Tax Assessment Act 1997 (ITAA 1997) and the
Taxation Administration Act 1953 (TAA 1953) to require that input
tax credits and fuel tax credits are claimed within a four-year
period.
Context of amendments
2. This measure implements recommendation 20 of the Board of
Taxation's Review of the Legal Framework for the Administration of
the Goods and Services Tax.
3. Under the GST Act, input tax credits (including reduced input tax
credits) are attributable to the first tax period in which either
any consideration is provided by the recipient, or an invoice is
issued. If the taxpayer accounts on a cash basis, input tax
credits will only be attributable when and to the extent that the
recipient provides consideration.
4. Two exceptions exist to this basic rule. Firstly, input tax
credits cannot be attributed to a tax period unless a relevant tax
invoice is held by the taxpayer in that tax period. Such input tax
credits will instead be attributable to the first tax period in
which the taxpayer holds a tax invoice (see subsection 29-10(3) of
the GST Act). Secondly, if the GST return for a tax period does
not take into account an otherwise attributable input tax credit,
the input tax credit is not attributable to that tax period. Such
credits are attributable to the first period in which a return is
provided taking the credit into account (see subsection 29-10(4) of
the GST Act).
5. Similar provisions exist for fuel tax credits (see section 65-5 of
the Fuel Tax Act).
6. The TAA 1953 establishes a four-year limitation period for indirect
tax liabilities and entitlements, including input tax credits
(subject to special rules in situations involving fraud and evasion
or where notice of the liability or entitlement has been provided).
The four-year period for claiming input tax credits and fuel tax
credits starts from the end of the tax period to which the relevant
credit is attributable (see section 105-55 of Schedule 1 to the TAA
1953).
7. As outlined above, the four-year period is imposed by reference to
the tax period or fuel tax return period to which the credit was
attributable. However, the attribution rules permit taxpayers to
defer the attribution of credits until a later tax period. As a
consequence there is no effective limitation period for claiming
input tax credits and fuel tax credits.
8. Flexibility in attributing input tax credits and fuel tax credits
benefits taxpayers and the Commissioner of Taxation (Commissioner)
by minimising the need for revisions to prior returns. Removing
this flexibility would increase compliance costs. However, it is
also important to balance certainty and consistency generally for
GST and fuel tax credits by limiting the time for revising
liabilities and entitlements. Flexibility in attributing credits
should not result in input tax and fuel tax credit entitlements
existing indefinitely, including where the entity's liabilities for
the same period are no longer due and payable because of the four-
year limitation period.
Summary of new law
9. Schedule 1 amends the GST Act, Fuel Tax Act and TAA 1953 to provide
that a taxpayer will cease to be entitled to an input tax credit
(including a reduced input tax credit) or fuel tax credit if the
credit has not been claimed within four years. The four-year
period starts from the date to which it would be attributable under
the basic attribution rules in subsections 29-10(1) and (2) of the
GST Act for input tax credits and subsections 65-5(1) to (3) of the
Fuel Tax Act for fuel tax credits.
10. However, entitlements will not cease where:
. the Commissioner has issued a notice under section 105-50
or 105-55 of Schedule 1 to the TAA 1953 concerning refunds
or additional liability and a credit arises from the
circumstances of the taxpayer's refund or liability;
. the Commissioner is satisfied that the taxpayer was
engaged in GST or fuel tax credit related fraud or evasion
and a credit arises from those circumstances; or
. the taxpayer has issued a notice under section 105-55 of
Schedule 1 to the TAA 1953,
unless the taxpayer has not borne tax on the acquisition to which
the credit relates.
11. The amendments also address the situation where taxpayers are
contractually required to make extra payments (by what is often
termed a 'gross-up clause') after the expiry of four years due to
the supplier being liable for GST. Such taxpayers may have had no
opportunity to claim these input tax credits (or partial input tax
credits where the acquisition has previously been treated as partly
creditable).
12. Making a payment as a result of a gross-up clause may now result in
an adjustment for GST. Such adjustments will reduce a taxpayer's
net amount to the same extent as the relevant input tax credit (or
part of an input tax credit) would have, if it had been available.
However, no adjustment will be available where the taxpayer has not
borne tax on the acquisition to which the adjustment relates.
Comparison of key features of new law and current law
|New law |Current law |
|Limits on claims |Limits on claims |
|Taxpayers will cease to |No effective limitation |
|be entitled to input tax |period applies to |
|credits and fuel tax |taxpayers' claims for |
|credits that they have |input tax credits or fuel|
|not taken into account in|tax credits. |
|a return for a tax period| |
|or fuel tax return period| |
|within four years from | |
|the date the credit would| |
|have been attributable | |
|under the basic | |
|attribution rules. | |
|Notice to extend limits |Notice to extend limits |
|on claims |on claims |
|Taxpayers remain entitled|Taxpayers and the |
|to input tax credits and |Commissioner may issue |
|fuel tax credits after |notices allowing more |
|the four-year period has |time to claim indirect |
|expired if they or the |tax amounts, including |
|Commissioner have |input tax and fuel tax |
|provided notice. |credits. |
|Taxpayers' entitlements |This is generally of |
|will also be preserved |limited relevance to |
|where the Commissioner |input tax credits and |
|has provided notice |fuel tax credits as no |
|extending the claim for |effective limitation |
|an amount and the input |period applies. |
|tax credit or fuel tax | |
|credit arises directly | |
|from the same | |
|circumstances. | |
|However, these | |
|entitlements will not be | |
|preserved where the GST | |
|related to an input tax | |
|credit has ceased to be | |
|payable and the taxpayer | |
|did not have a tax | |
|invoice within the four | |
|years. | |
|Limits on claims related |Limits on claims related |
|to fraud or evasion |to fraud or evasion |
|Taxpayers can claim input|The Commissioner must |
|tax credits and fuel tax |take into account input |
|credits after the |tax credits and fuel tax |
|four-year period has |credits attributable to a|
|expired if the credits |period in which the |
|directly relate to an |Commissioner is satisfied|
|amount of tax not paid or|payment or non-payment of|
|a claim for a refund that|an amount results from |
|the Commissioner is |fraud or evasion. |
|satisfied resulted from |However, such credits |
|fraud or evasion. |cannot be taken into |
|However, these |account to the extent |
|entitlements will not be |they reduce a net amount |
|preserved where the GST |to less than zero. |
|related to an input tax |This is generally of |
|credit has ceased to be |limited relevance to |
|payable and the taxpayer |input tax credits and |
|did not have a tax |fuel tax credits as no |
|invoice within the four |effective limitation |
|years. |period applies. |
|Adjustments for 'gross-up|Adjustments for 'gross-up|
|clauses' |clauses' |
|An adjustment for GST |An adjustment for GST may|
|will occur where a |not arise where |
|taxpayer is contractually|additional payment is |
|obliged to provide an |contractually required as|
|additional payment |a result of the |
|because their supplier is|supplier's GST liability.|
|liable for GST or | |
|additional GST and the |This is generally of |
|four-year period has |limited relevance to |
|expired. |input tax credits and |
|The adjustment will |fuel tax credits as no |
|reduce the taxpayer's net|effective limitation |
|amount by the amount of |period applies. |
|the input tax credit to | |
|which they would | |
|otherwise have been | |
|entitled. | |
|However, these | |
|entitlements will not be | |
|preserved where the GST | |
|related to an input tax | |
|credit ceased to be | |
|payable. | |
Detailed explanation of new law
Time limit on entitlements to credits
13. Following the amendments, input tax credits (including reduced
input tax credits) and fuel tax credits must generally be taken
into account in the calculation of a net amount or net fuel amount
by the end of four years. This four-year period commences from the
day on which the taxpayer was required to give the Commissioner a
return for the tax period to which the credit would be attributable
under the basic attribution rules in subsections 29-10(1) and (2)
of the GST Act and subsections 65-5(1) to (3) of the Fuel Tax Act.
Where an input tax credit or fuel tax credit is not taken into
account in the calculation of a net amount within this time, the
taxpayer generally ceases to be entitled to the credit. [Schedule
1, item 7, sections 93-1 and 93-5 of the GST Act, item 17, section
47-5 of the Fuel Tax Act]
14. Taxpayers must generally provide a return within 28 days (if they
lodge on a quarterly basis) or 21 days (if they lodge on a monthly
basis) of the end of the relevant tax period.
15. Following the amendments, these taxpayers will generally cease to
be entitled to input tax credits if they have not taken them into
account in calculating their net amount in a GST return lodged
within four years of the date the return was required. For such
taxpayers accounting on a non-cash basis this will be the first
period in which the taxpayer provided any consideration or an
invoice was issued for the acquisition (see subsection 29-10(1)).
For taxpayers accounting on a cash basis, this will be the tax
period in which the taxpayer provided the relevant portion of the
consideration (see subsection 29-10(2)).
16. Equivalent rules apply to entities that account for fuel tax
credits under Division 65 of the Fuel Tax Act.
17. These changes will not affect the entitlement of taxpayers to input
tax credits or fuel tax credits where these credits have been taken
into account in earlier returns or assessments but the relevant
liability or entitlement has not been paid (whether by the
Commissioner or by taxpayers).
18. The changes apply only to input tax credits for fully and partially
creditable acquisitions (including reduced input tax credits) and
fuel tax credits. Other entitlements and liabilities such as input
tax credits for creditable importations, adjustments and taxable
supplies are subject to separate attribution rules that do not
allow deferral. As such, they are currently subject to effective
limitation periods that provide certainty within an appropriate
period.
Exceptions to the time limit for credits
19. The amendments provide for three exceptions to the general rule
that entitlements cease if a credit has not been taken into account
within four years. [Schedule 1, item 7, subsection 93-10(1) of the
GST Act, item 17, subsection 47-10(1) of the Fuel Tax Act]
Notices removing the time limit for liabilities
20. The first exception applies where the Commissioner notifies a
taxpayer of an amount for which the taxpayer is liable.
21. The four-year limitation period will not apply to a liability if
the Commissioner provides notice within the four-year period to the
taxpayer requiring payment of the amount (section 105-50 of
Schedule 1 to the TAA 1953).
22. Allowing the Commissioner to pursue liabilities where taxpayers
have ceased to be entitled to the related input tax credits or fuel
tax credits could cause inequities. The exception addresses this
concern by preserving a taxpayer's credit entitlements where they
arise as a consequence of the same circumstances that have resulted
in the amount for which the Commissioner has issued the notice.
[Schedule 1, item 7, subsection 93-10(2) of the GST Act, item 17,
subsection 47-5(2) of the Fuel Tax Act]
23. For an input tax credit or fuel tax credit to meet this test it is
not sufficient that the credit arise from the same business
activity or the same tax period. Instead, it is necessary for the
credit to arise from the same circumstances -- that is, the same
events and for the same reason -- for which the additional payment
is sought by the Commissioner from the taxpayer (see paragraphs
1.36 to 1.43 for more details). This would include where an input
tax credit for an acquisition relating to a supply was treated as a
financial supply despite being a taxable supply and the
Commissioner has provided notice requiring payment of GST on the
supply.
24. Input tax credits and fuel tax credits may fall within this
exception even where they arise in different periods to the
liability for which the Commissioner provides notice. However,
where the notice is provided after entitlement to a credit has
already ceased, the entitlement to the credit will not be restored.
1.
Sophie operates a business that is registered for GST,
reporting monthly. In October 2006, she changed accountants
and due to a mix up failed to provide a GST return or remit
tax for that tax period. In May 2010, this omission was
identified during an Australian Taxation Office (ATO) audit
of Sophie's business. The Commissioner then provided Sophie
with a notice requiring payment for the October 2006 tax
period meeting the requirements of section 105-50 of
Schedule 1 to the TAA 1953.
Following further discussions with the ATO, Sophie
determines her net amount for the relevant tax period and
lodges a return for the October 2006 tax period in November
2010. Sophie holds a tax invoice to establish her
entitlement to input tax credits and is able to include the
input tax credits that were attributable to this tax period
in this net amount, despite entitlement typically ceasing
after four years. This reflects that these input tax
credits arise directly from the same circumstances as the
notice - the failure to lodge. As Sophie had made
significant acquisitions in this period, the relevant input
tax credits exceeded her GST liabilities, making her net
amount negative. Following lodgment, Sophie receives a
refund from the Commissioner.
2.
LLE P/L is a property investment company that is registered
for GST, reporting on a monthly basis. In January 2006, it
sold a motel complex, treating the sale as an input taxed
supply of residential premises. LLE P/L made a number of
acquisitions related to this sale, including legal services
attributable to the month of sale and valuation services in
August 2005. LLE P/L also made a creditable acquisition
related to a sale of commercial residential premises for
which it did not claim any input tax credits.
In September 2009, LLE P/L is audited by the ATO. The
auditors identify that the motel complex was a taxable
supply of commercial residential premises. The Commissioner
provides LLE P/L with a notice meeting the requirements of
section 105-50 of Schedule 1 to the TAA 1953 in relation to
the underpayment in January 2006 due to the treatment of the
sale as input taxed.
In November 2009, the Commissioner makes an assessment of
LLE P/L's net amount for the November 2006 tax period. In
working out the new net amount for this period, the input
tax credits related to the legal costs may be taken into
account. LLE P/L however, may not claim the credit for the
valuation, as while it did arise from the relevant
circumstances, more than four years had passed since the
credit was attributable when the notice was issued. LLE P/L
is also not entitled to the unrelated credit. This credit
does not arise directly out of the matter for which the
notice was issued.
Fraud and evasion
25. The second exception applies to credits linked to liabilities
avoided as a result of fraud or evasion.
26. Under paragraph 105-50(3)(b) of Schedule 1 to the TAA 1953, the
limitation period established by section 105-50 does not apply to
amounts where the Commissioner is satisfied that payment was
avoided or brought about by fraud or evasion.
27. The ability of the Commissioner to pursue such liabilities where
taxpayers would have ceased to be entitled to the related input tax
credits would be inequitable. This exception addresses this
concern by preserving entitlements to input tax credits and fuel
tax credits where they arise from the same fraudulent or evasive
behaviour. [Schedule 1, item 7, subsection 93-10(3) of the GST
Act, item 17, subsection 47-5(3) of the Fuel Tax Act]
28. The relationship required between such credits and the fraudulent
or evasive activity is the same as is outlined above for notices
issued by the Commissioner (see also paragraphs 1.36 to 1.43).
29. This exception applies to all credits arising directly from
circumstances where the Commissioner is entitled to seek payment
because he is satisfied that the payment was avoided because of
fraud or evasion. Unlike the exception that applies where the
Commissioner issues a notice to the taxpayer, this exception can
result in input tax credits and fuel tax credits being available
after the taxpayer had ceased to be entitled to the credit. This
reflects the unlimited period over which the Commissioner may
pursue liabilities arising from fraud or evasion.
1.
Fiona operates a plumbing business that has been registered
for GST since January 2003. In the course of her business,
Fiona will occasionally take special jobs out of hours.
Payment for these special jobs must be in cash and, despite
advice from her accountant, Fiona does not pay GST on these
sales or claim input tax credits for parts and other
supplies she obtains for these special jobs.
In November 2010, the ATO uncovers these unreported
transactions. The Commissioner forms the view that Fiona's
behaviour in not declaring or paying tax on the special jobs
constitutes evasion and assesses Fiona on the unpaid tax on
these sales dating back to January 2003, relying on
paragraph 105-50(3)(b) of Schedule 1 to the TAA 1953. As
the acquisition of the parts and other supplies arise from
the circumstances of the evasion, Fiona may still claim the
relevant input tax credits despite the elapsed time.
Notices removing the time limits for refunds and credits
30. The third and final exception applies where taxpayers notify the
Commissioner of their entitlement to a credit.
31. Under subsection 105-55(1) of Schedule 1 to the TAA 1953, taxpayers
may notify the Commissioner of their entitlement to a refund, other
payment or credit to which that section applies. Providing such a
notification allows the taxpayer more time to claim the relevant
amount.
32. This exception ensures that the taxpayer will remain entitled to
the credit after four years where the required notice of the credit
has been provided, despite the general time limit introduced by
these amendments. [Schedule 1, item 7, paragraph 93-10(4) of the
GST Act, item 14, paragraph 47-5(4) of the Fuel Tax Act]
33. However, the notice only preserves a pre-existing entitlement to a
credit. Where a taxpayer has already ceased to be entitled to an
input tax credit or fuel tax credit, the issue of a notice will not
restore this entitlement. [Schedule 1, item 7, subparagraph 93-
10(4) of the GST Act, item 17, paragraph 47-5(4) of the Fuel Tax
Act]
34. Taxpayers will not be able to preserve their entitlement by issuing
notices where section 105-55 does not apply, such as input tax
credits that are not attributable as no tax invoice is held.
However, if the taxpayer makes a request to the Commissioner to
treat another document as a tax invoice within the four-year period
and the Commissioner later agrees to the request, the request
becomes a valid notice for the purposes of section 105-55 of
Schedule 1 to the TAA 1953. This will ensure that the entitlement
to the credit will not cease. This may be the case even where the
Commissioner's agreement to the request occurs after the end of the
four-year period. [Schedule 1, item 16, subsection 105-55(2A)]
35. Where an entitlement to an input tax credit or fuel tax credit is
preserved as a result of this exception, the credit may be
attributed and claimed in a tax period under the rules in the GST
Act or Fuel Tax Act. Typically, taxpayers may include the input
tax credit or fuel tax credit in the net amount or net fuel amount
for either the current tax period or fuel tax return period or the
period to which it was attributable under the rules in the relevant
Act.
1.
Matthew operates a toy store and is registered for GST,
reporting on a quarterly basis. In June 2006 he purchased
and paid for a stock of dolls and action figures. This was
a creditable acquisition. However, Matthew did not receive
a tax invoice.
In May 2010 Matthew realised he had not obtained the
relevant input tax credit. He applied to the Commissioner
to treat the invoice he held as a tax invoice. In July
2010, the Commissioner agrees to this request. At this
point, Matthew's request becomes a valid notification as a
result of new subsection 105-55(2A) of Schedule 1 to the
TAA 1953. Had Matthew not made this request or not made it
within the four-year period he would not have been entitled
to this credit. However, as he is treated as having
notified the Commissioner at the time he made the request,
Matthew is still entitled to the credit, which clearly
arises from the same circumstances as the notification
(subject to the other requirements of the legislation), and
can include it in the net amount for the original period or
the current period (due to the notice).
Meaning of input tax credits 'arising from circumstances'
36. Where any of the three exceptions outlined above (see paragraphs
1.19 to 1.35) apply, taxpayers can generally disregard the four-
year limit on claiming credits. For one of those exceptions to
apply, the credit must have arisen from the same circumstances that
gave rise to a liability or entitlement that is not subject to the
limitation period.
37. This concept differs from the current rules which apply to input
tax credits and fuel tax credits under sections 105-50 and 105-55
of Schedule 1 to the TAA 1953. In these two provisions, input tax
credits may only be taken into account beyond the limitation period
if they form part of a liability or entitlement for which the
Commissioner has issued a notice or an entitlement in relation to
which the taxpayer has issued a notice.
38. For the above exceptions on the four-year limit on input tax
credits, such a concept would not, however, result in the correct
outcome being achieved. If an acquisition relates to a supply
which the taxpayer incorrectly treats as input taxed, then whether
or not the taxpayer made the acquisition in the same period should
not restrict a taxpayer's entitlement to recover the credit.[1]
Similarly, if an acquisition has no connection with the issue that
gave rise to a notice, but merely occurs in the same period that
the net amount is revised, then it should not receive special
treatment.
39. For this reason, the appropriate focus for the exceptions is not
the amount but the underlying circumstances that gave rise to the
change in the amount. For example, the Commissioner may issue a
notice as tax has been underpaid in a period. The reason for this
underpayment is that the taxpayer wrongly treated a supply of new
residential premises as input taxed. If input tax credits were
available at the time of the issue of the notice, the taxpayer will
remain entitled to the credits even after the four years expires.
40. To arise from the same circumstances, credit must stem from both
the same events and same reason that gave rise to an amount in a
notice or an amount avoided by fraud or evasion. The measure does
not apply to a credit that arises from the same event but not for
the same reason (for example, if a taxpayer makes an acquisition,
half of which relates to a supply they treat as being input taxed,
but omits to claim the portion of credits for which they are
clearly entitled, the provisions may allow the portion not claimed
as a result of the input tax treatment out of time but will not
allow the claim of the portion the taxpayer forgot to claim).
41. Likewise, a credit that arises for the same reason but different
events will not fall within the exceptions (for example, if the
Commissioner issues a notice in relation to one sale as it was
wrongly treated as input taxed residential property, the taxpayer
will not be able to use this notice to claim credits arising from
five other similar sales where notices were not issued in time even
though the same error was made).
42. In some circumstances the 'arise from the same event' requirement
will achieve the same result as the present test for the limitation
period provisions. In particular, if a notice is issued in
relation to a period as there has been no return or payment
provided for that period, then all of the credits attributable to
the period may arise from the same circumstances as the notice.
43. Unlike the situation that exists under the limitation period rules
in sections 105-50 and 105-55 of Schedule 1 to the TAA 1953, the
exceptions relating to notices for liabilities and fraud or evasion
can apply to credits that have not been attributed to any tax
period. As a result, the attribution rules in section 29-10 of the
GST Act apply, typically allowing the credit to be attributed in
the current tax period.
Where the exceptions do not apply
44. The exceptions to the four-year limitation period on input tax
credits are subject to a qualification. Entitlement to an input
tax credit will not be preserved beyond the four-year period
despite the exceptions applying (see paragraphs 1.19 to 1.35) if:
. the Commissioner is no longer able to obtain payment of
the GST from the supplier of the taxable supply which
relates to the recipient's input tax credits sought to be
claimed; and
. a tax invoice was not issued for the supply within four
years.
[Schedule 1, item 7, section 93-15]
45. The qualification is required as the exceptions potentially allow
the taxpayer to claim input tax credits on acquisitions where the
limitation period has expired for the Commissioner to seek payment
from suppliers of any GST on the related taxable supply.
46. Input tax credits are intended to relieve registered businesses of
GST borne on their creditable acquisitions. Where there has never
been any GST borne on an acquisition, it is not appropriate that
the acquirer should be able to claim an input tax credit. At the
same time, however, it is the responsibility of the supplier, not
the recipient, to pay GST on taxable supplies they make.
47. The qualification addresses both these concerns. Taxpayers will
generally not be able to claim input tax credits where tax has not
been paid and has ceased to be payable by the supplier. However,
where they have evidence that they have borne tax in the form of a
tax invoice issued within the four-year period, then their
entitlement will be preserved.
48. A similar measure is not required for fuel tax credits because it
does not contain a taxing and crediting mechanism as applies for
GST.
Adjustments for payments resulting from gross-up clauses
49. This measure also amends the GST Act to create an adjustment rule.
Taxpayers must adjust their net amount where they are contractually
required to provide payment as a result of a supplier being liable
to pay GST after the taxpayer has ceased to be entitled to the
relevant input tax credit. [Schedule 1, item 11, section 133-5]
50. It is the responsibility of suppliers to determine what, if any,
GST liabilities they may incur as a result of their commercial
activities. However, it is common for clauses to be included in
commercial agreements entitling the supplier to additional amounts
should supplies made under the contract prove to be subject to GST.
Such clauses, termed GST gross-up clauses, are standard practice
in many contracts. Depending on the drafting of the clause, they
may require an extra amount to be paid in the event the supply is
subject to GST or provide that the consideration under the contract
includes the stated amount plus any applicable GST.
51. As a result, where the Commissioner is entitled to pursue
liabilities beyond four years, the supplier may be entitled to rely
upon such a gross-up clause to pass on the burden of the tax to the
recipient.
52. In this situation, where the nature of the gross-up clause means
that this payment does not result in an adjustment under Division
19 of the GST Act, the recipient is left bearing the burden of the
tax. Despite the Commissioner seeking payment outside of the
limitation period, the entitlement to an input tax credit on the
acquisition is not preserved.
53. The exceptions outlined above (see paragraphs 1.19 to 1.35) will
not allow recipients affected by a gross-up clause to claim an
input tax credit. The exceptions apply where taxpayers are
notified of a liability or are engaged in fraud or evasion. Where
a gross-up clause applies, a notice has not been issued to the
taxpayer only to the taxpayer's supplier. Such a third party
notice does not prevent the cessation of entitlement for the
recipient of the supply.
54. Where no gross-up clause exists, the denial of input tax credits
will be appropriate. The recipient will have borne no GST and
require no relief. It is the supplier that bears the
responsibility and the cost for their own error.
55. However, it is not an appropriate outcome where a gross-up clause
exists allowing the cost of the GST to be passed on to the
recipient. These amendments address this situation by providing
that where a taxpayer must pay more as a result of a gross-up
clause and they have ceased to be entitled to the input tax credit
for the acquisition, the taxpayer will have a decreasing
adjustment, reducing their GST liability. [Schedule 1, item 11,
subsection 133-5(1)]
56. In some circumstances gross-up clauses in contracts may be drafted
in such a way as to allow the supplier to seek an extra payment if
the supply is potentially taxable even where the supplier can no
longer be required to pay tax on the supply (such as where the
limitation period for the Commissioner to seek payment of the
liability has passed). In this case the matter is purely a
contractual one between the supplier and recipient and no
adjustment will be available as a result of these amendments.
[Schedule 1, item 11, paragraph 133-5(1)(c)]
57. There will also be no adjustment under the provisions where the
underpayment occurred for some reason unrelated to tax. [Schedule
1, item 11, paragraph 133-5(1)(a)]
58. The amount of the decreasing adjustment will be equal to the
difference between the amount of the input tax credit claimed and
the amount which the taxpayer would have been entitled to claim
(had the taxpayer held a relevant tax invoice). For example, where
no input tax credit has been claimed in a fully creditable
transaction then the adjustment will be equal to the full amount of
the credit. [Schedule 1, item 11, subsection 133-5(2)].
59. To avoid doubt, additional consideration is defined so as to
include the payment of part of the consideration that parties may
have treated as not being payable. [Schedule 1, item 11,
subsection 133-5(3) and item 12]
1.
Michael operates a business selling ski gear and winter
sports accessories that is registered for GST. In May 2005,
he entered an agreement with Eli, who was closing his ski
gear business (also registered for GST), to purchase Eli's
remaining stock. The sale was treated as the supply of a
GST free going concern. The contract of sale contained a
GST gross-up clause.
Eli was audited in November 2008. The auditor identified
that the sale did not qualify as a going concern and the
Commissioner assessed Eli in relation to the GST owing on
the sale of the ski gear. In January 2009 Eli was issued
with a notice requiring payment that met the requirements of
section 105-50 of Schedule 1 to the TAA 1953. Eli sought to
have the decision of the auditor reviewed, but in June 2009
was told the decision had been confirmed. Eli then paid the
outstanding GST and recovered the additional amount from
Michael under the gross-up clause.
Michael was entitled to an input tax credit in relation to
this sale, but this credit was attributable to May 2005 and
so his entitlement has ceased. Michael will however have a
decreasing adjustment to his GST liability or entitlement.
He acquired the stock on the basis it was GST free, has
provided additional consideration due to the supply being
found to be taxable, tax on the supply has been paid and
Michael is no longer entitled to the input tax credit.
The amount of this decreasing adjustment will be the
difference between the input tax credit Michael claimed, in
this case zero, and the input tax credit to which Michael
was entitled.
60. Under some circumstances a payment under a gross-up clause might
constitute a change in consideration for the acquisition. In these
circumstances, the payment could potentially result in an
adjustment under both Division 19 and Division 133.
61. To avoid this potential complexity, the amendments provide that
where a payment would result in a taxpayer having a decreasing
adjustment under both these provisions and Division 19, no
adjustment will result under Division 19. Other taxpayers (such as
the supplier) may still have an increasing adjustment under
Division 19 as a result of the same payment. [Schedule 1, item 11,
section 133-10]
Application and transitional provisions
Application provisions
62. The amendments impose a four-year limit on the claiming of credits
(subject to the exceptions outlined above) in GST returns and
assessments for GST lodged or issued from the time of announcement
(7.30 pm Australian Eastern Standard Time on 12 May 2009) and
revisions to such returns and revised assessments issued or made
after this time. [Schedule 1, item 19]
63. The amendments also apply to returns and assessments for the
purpose of fuel tax law lodged or issued from 1 July 2010 and
revisions to such returns and revised assessments issued or made
after this time. [Schedule 1, item 20]
64. As the amendments apply to returns and assessments lodged after
Budget night, it will affect taxpayers based on when they lodge a
return not the tax period to which the return relates. Taxpayers
will also be subject to the four-year restriction when claiming
input tax credits in tax periods that ended before 12 May 2009 but
for which they had not previously lodged returns or been assessed
or by seeking to amend earlier returns or assessments after 12 May
2009.
1.
Rui operates a book binding business that is registered for
GST, reporting on a monthly basis. In January of 2004 and
again in September of 2008, Rui purchased additional book
binding machines. Both of these purchases were creditable
acquisitions and Rui received a tax invoice and provided
payment in the same month.
In June 2009, Rui realises that she has yet to claim an
input tax credit for either purchase. As more than four
years have elapsed since the end of the January 2004 tax
period, Rui is no longer entitled to that input tax credit.
She remains entitled to the input tax credit related to the
September 2008 purchase.
2.
Sophie operates a restaurant that is registered for GST,
reporting on a quarterly basis. In 2004 and 2005, she
refurbished her restaurant, acquiring new tables, purchasing
(and receiving a tax invoice) some in the December 2004
quarter and the remainder in the June 2005 quarter. Sophie
did not claim any input tax credits for these acquisitions.
In May 2009, Sophie identified these unclaimed input tax
credits and sought to claim them in her return for the April
2009 quarter, which she lodged on 20 May 2009. As this
return has been lodged after 12 May 2009, the restriction
applies. As a result, Sophie has ceased to be entitled to
the credits for the tables acquired in the December 2004
quarter, as this input tax credit has not been taken into
account in the calculation of a net amount in the required
time. Sophie may, however, still claim the input tax
credits for the tables acquired in the June 2005 quarter.
3.
Anthony operates a tree surgery business, accounting for GST
monthly on a cash basis. In 2005, he purchases new tree
felling equipment, providing payment in two instalments, one
in April 2005 (when he receives the tax invoice for the
whole transaction) and one in June 2005. He takes delivery
of the equipment in July 2005. Anthony does not seek to
claim the input tax credits for acquisitions at that time.
In his return for May 2009, Anthony seeks to claim the input
tax credits for the acquisition. As this claim is made in a
return after 12 May 2009, the restriction applies. As a
result, Anthony may not claim that part of the input tax
credits attributable to the April 2005 period under the
rules in subsection 29-10(2). He has ceased to be entitled
to this portion of the credit as he has not included it in
the calculation of his net amount in the required time. He
may, however, still claim the portion of the credit
attributable under the basic rules to June 2005 by taking
them into account in a GST return lodged on or before 21
July 2009.
Consequential amendments
65. There are also amendments to a number of headings, definitions and
several notes that need to be removed or changed because of
amendments to the GST Act, Fuel Tax Act, the ITAA 1997 and Schedule
1 to the TAA 1953. [Schedule 1, items 1 to 6, 8, 13 to 15 and 18]
66. Consequential amendments have been made to ensure that adjustments
resulting from the amendments to address gross-up clauses interact
appropriately with the rules for adjustments currently operating in
the GST Act. [Schedule 1, items 9 and 10].
67. This measure does not repeal paragraph 105-55(1)(c) of Schedule 1
to the TAA 1953. However, it has significant implications for the
operation of this section.
68. Paragraph 105-55(1)(c) allows for the inclusion of input tax
credits and fuel tax credits in the net amount for a tax period
where they are taken into account in determining an amount the
Commissioner may recover from a taxpayer outside the limitation
period as payment of some or all of the amount has been avoided as
a result of fraud or evasion.
69. These provisions will cease to have any effect for GST and fuel tax
credits following the commencement of this measure. As taxpayers'
entitlement will cease after the four-year period has passed, it
will not be possible for them to be taken into account in working
out any net amount. Where appropriate, the amendments preserve the
entitlement to input tax credits and fuel tax credits to the extent
they arise from the circumstances of the fraud or evasion.
70. However, the provision remains relevant for wine equalisation tax
and luxury car tax and so has been retained.
Chapter 2
Australian External Territory refund collection system
Outline of chapter
71. Schedule 2 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) and the A New Tax System (Wine
Equalisation Tax) Act 1999 (WET Act) to allow residents of
Australia's External Territories (such as Norfolk, Cocos (Keeling)
and Christmas Islands) to claim refunds of goods and services tax
(GST), or GST and wine equalisation tax (WET) under the tourist
refund scheme. Claims can be made if Australian External Territory
residents can show proof that the goods have been exported to their
External Territory within the required period after the goods were
acquired.
Context of amendments
72. Exports and other supplies for consumption outside Australia are
GST-free under certain circumstances. For GST purposes,
Australia's External Territories are considered to be outside
Australia. As such, supplies of goods exported to Australian
External Territories are generally GST-free. Similarly, sales of
wine to Australian External Territories are generally not subject
to WET.
73. A supply by a business to a visiting Australian External Territory
resident will generally be GST-free as an export, provided the
External Territory resident can provide evidence that the goods
have been exported.
74. In addition, the tourist refund scheme operates to entitle
individuals who take goods outside Australia (including to an
Australian External Territory) to a refund of the GST and WET that
was payable on the supply of the goods. The scheme is administered
for the Commissioner of Taxation (Commissioner) by the Australian
Customs and Border Protection Service. Goods must be of a kind
specified in the Regulations and exported as accompanied baggage to
qualify for a refund.
75. The Board of Taxation, in its Review of the Legal Framework for the
Administration of the Goods and Services Tax, recommended that a
system be introduced under which residents of Australia's External
Territories (such as Norfolk, Cocos (Keeling) and Christmas
Islands) can claim refunds under the tourist refund scheme on
unaccompanied baggage if they can show proof of shipping of
exported goods to their External Territory (recommendation no. 31).
76. The Government's response to the Board of Taxation's
recommendations was announced in Media Release No. 042 by the then
Assistant Treasurer on 12 May 2009 in the context of the 2009-10
Budget.
77. Amendments to the Regulations to give effect to the provisions in
this Bill are intended to be made to the A New Tax System (Goods
and Services Tax) Regulations 1999 (GST Regulations) and A New Tax
System (Wine Equalisation Tax) Regulations 2000 (WET Regulations).
Summary of new law
78. The amendments allow residents of Australia's External Territories
(such as Norfolk, Cocos (Keeling) and Christmas Islands) to claim
refunds under the tourist refund scheme on goods not taken as
accompanied baggage. Australian External Territory residents must
show proof that the goods have been exported to their External
Territory within the required period after the goods were acquired
to qualify for a refund of GST and/or WET. It is intended that
Regulations will be enacted requiring the goods to be exported
within 60 days.
79. Unless otherwise stated, it is intended that the current tourist
refund scheme rules must be met for an Australian External
Territory resident to qualify for a refund of GST or GST and
subsequently WET. This includes the need for Australian External
territory residents to present goods that are taken as 'accompanied
baggage' to an officer of the Australian Customs and Border
Protection Service on request at the tourist refund scheme
facility.
80. The amendments seek to prevent goods being sold to Australian
External Territory residents as GST-free exports where the
recipient has also claimed a refund of the GST, or GST and
subsequently WET under the tourist refund scheme. For goods to be
sold as GST-free exports, the recipient must declare to the
supplier that the goods were not subject to a refund claim for GST
and/or WET under the tourist refund scheme.
81. Similarly, the amendments seek to ensure that a supply of wine is
not free of WET where a claim for a refund of the tax paid is also
made under the tourist refund scheme.
82. In the event that an Australian External Territory resident makes a
tourist refund scheme claim on a GST-free supply, any wrongly paid
refund is payable to the Australian Government. A general interest
charge (GIC) is payable on the whole, or any part, of the
recoverable amount that remains unpaid. The GIC is calculated from
the later of the day the refund was made and the day the supply
became GST-free.
Comparison of key features of new law and current law
|New law |Current law |
|Refund collection system |Refund collection system |
|- GST Act |- GST Act |
|Division 168 is expanded |Division 168 provides for|
|to also allow |the refund of GST borne |
|unregistered residents |on goods by tourists who |
|(who are not required to |make a claim at a tourist|
|be registered) of |refund scheme facility |
|Australian External |prior to departure. The |
|Territories to claim |supply must have been a |
|refunds of GST on goods |taxable supply and goods |
|that are exported |must be exported as |
|otherwise than as |accompanied baggage in |
|accompanied baggage to |the manner specified in |
|their External Territory |the Regulations. |
|under the tourist refund | |
|scheme. The goods must | |
|have been a taxable | |
|supply and exported in | |
|the manner specified in | |
|the Regulations to | |
|qualify. | |
|An entity must satisfy | |
|one of the following to | |
|be classified as a | |
|resident of an Australian| |
|External Territory: | |
|the entity resides in an | |
|External Territory; | |
|the entity's domicile is | |
|in an External Territory;| |
|or | |
|the entity has actually | |
|been in an External | |
|Territory, continuously | |
|or intermittently, during| |
|more than half of the | |
|last 12 months. | |
|In addition, if a refund | |
|is paid under the new | |
|scheme for unaccompanied | |
|baggage, and the supply | |
|is or has become a | |
|GST-free supply, then the| |
|recipient is liable to | |
|repay that amount under | |
|new section 168-10. This| |
|amount is subject to a | |
|GIC. | |
|Recipients of GST-free |Recipients of GST-free |
|exports declaration |exports |
|In addition to the |Subsection 38-185(3) sets|
|existing requirements |out when a supplier of |
|under |goods is treated as |
|subsection 38-185(3), |having exported the goods|
|goods cannot be sold to |from Australia as a |
|Australian External |GST-free export. These |
|Territory residents as a |include: |
|GST-free export unless a |before export, the |
|declaration is held that |supplier supplies the |
|a refund claim has not |goods to an entity that |
|been made under the |is not registered or |
|tourist refund scheme for|required to be |
|the GST borne. |registered; |
|Similarly, wine cannot be|that entity exports the |
|sold without WET unless a|goods from Australia; |
|declaration is held that |the goods have been |
|a claim has not been made|entered for export under |
|for GST and therefore the|the Customs Act 1901; |
|WET borne by the |the goods have not been |
|Australian External |altered in any way, |
|Territory resident. |except as necessary to |
| |prepare them for export; |
| |and |
| |the supplier has |
| |sufficient documentary |
| |evidence to show that the|
| |goods were exported. |
| |Section 7-5 of the WET |
| |Act states that wine tax |
| |is not payable if it is a|
| |GST-free supply. |
|Refund collection system |Refund collection system |
|- WET Act |- WET Act |
|Division 25 is expanded |Division 25 provides for |
|to allow unregistered |the refund of WET borne |
|residents (who are not |on wine to tourists who |
|required to be |make a claim at a tourist|
|registered) of Australian|refund scheme facility |
|External Territories to |prior to departure. The |
|claim refunds of wine tax|supply must have borne |
|borne on wine that is not|wine tax and the wine |
|exported as accompanied |must be exported as |
|baggage to their External|accompanied baggage in |
|Territory. To qualify, |the manner specified in |
|the Australian External |the Regulations. |
|Territory resident must | |
|also be able to claim a | |
|refund of GST under the | |
|tourist refund scheme, | |
|the goods must have borne| |
|wine tax and be exported | |
|in the manner specified | |
|in the Regulations. | |
|In addition, if a refund | |
|is paid under the new | |
|scheme for unaccompanied | |
|baggage, and the supply | |
|is or has become a | |
|GST-free supply, then the| |
|recipient is liable to | |
|repay that amount under | |
|new section 25-10. This | |
|amount is subject to a | |
|GIC. | |
Detailed explanation of new law
83. Under the GST Act, a supply to an entity that subsequently exports
the goods for consumption outside Australia will generally be GST-
free as an export.
84. For GST purposes, Australia's External Territories (such as
Norfolk, Cocos (Keeling) and Christmas Islands) are considered to
be outside Australia. As such, supplies of goods exported to
Australian External Territories are generally GST-free. Similarly,
sales of wine to Australian External Territories are generally not
subject to WET.
85. Alternatively, Australian External Territory residents can claim a
refund of GST on the taxable supply, or a refund of GST and
subsequently WET on any wine tax borne via the tourist refund
scheme for accompanied baggage.
86. The tourist refund scheme operates to entitle individuals who take
goods outside Australia (including to an Australian External
Territory) to a refund of the GST and WET that was payable on the
supply of the goods. The scheme is administered for the
Commissioner by the Australian Customs and Border Protection
Service. Exported goods must satisfy the following to qualify:
. the goods acquired must have been a taxable supply or have
borne wine tax;
. the goods purchased must total A$300 (GST inclusive) or
more;
. the goods are of a kind included in the GST Regulations or
the WET Regulations; and
. the individual leaves Australia and exports the goods from
Australia as accompanied baggage, in the circumstances set
out in the Regulations.
87. The amendments allow unregistered residents (who are not required
to be registered) of Australian External Territories to claim
refunds of GST, or GST and subsequently WET on goods that are
exported to their External Territory under the tourist refund
scheme. The amendments only apply to goods not exported as
accompanied baggage. For accompanied baggage, claims can still be
made under subsection 168-5(1). [Schedule 2, item 7, subsection
168-5(1A) of the GST Act, item 14, subsection 25-5(1A) of the WET
Act]
88. For an Australian External Territory resident to qualify for
a refund of GST, or GST and subsequently WET on unaccompanied
baggage, they must satisfy the conditions outlined in the
GST Regulations. If the goods are wine, the conditions in the
WET Regulations must also be satisfied for an Australian External
Territory resident to qualify for a refund of GST and subsequently
WET. The intended conditions for lodging a tourist refund scheme
claim and providing documentary evidence of export are outlined
below for completeness. However, these conditions are not
contained in the legislation but are intended to be included in the
Regulations to be issued.
89. Section 168-10 ensures that amounts are recoverable where supplies
are later found to be GST-free supplies and where claimants have
also been paid a refund under subsection 168-5(1A). Similarly,
section 25-10 ensures that amounts of WET are recoverable where the
corresponding purchase of wine becomes a GST-free supply and the
claimant has also been paid a refund under subsection 25-5(1A). In
these circumstances, claimants will be liable to repay the amount
claimed under the tourist refund scheme. This applies for GST and
for GST and subsequently WET. A GIC is payable on the whole, or
any part, of the recoverable amount that remains unpaid. The
general interest charge is calculated from the later of the day the
refund was made and the day the supply became GST-free. [Schedule
2, item 11, section 168-10 of the GST Act, item 18, section 25-10
of the WET Act]
Lodging Tourist Refund Scheme claim
90. The conditions for lodging a claim are intended to be contained in
the Regulations. Australian External Territory residents must
present themselves at a tourist refund facility within the required
period after the goods were acquired, to claim and prove an
entitlement to a refund of any tax payable. When making the
tourist refund scheme claim, Australian External Territory
residents must also show evidence of exportation, or evidence that
they have put in place arrangements so that the goods will be
exported from Australia to an Australian External Territory within
the required period after the goods were acquired. It is intended
that Regulations will be introduced that will require that the
goods must be exported within 60 days after they were acquired.
91. The intention of extending the tourist refund scheme is to provide
a direct mechanism for Australian External Territory residents to
obtain refunds of GST and WET on goods that are unable to be
exported as accompanied baggage to an Australian External
Territory.
92. Unless otherwise stated, it is intended that the current tourist
refund scheme rules must continue to be met for an Australian
External Territory resident to qualify for a refund of GST or WET
for accompanied baggage. This includes the need for Australian
External territory residents to present goods that are taken as
'accompanied baggage' to an officer of the Australian Customs and
Border Protection Service on request at the tourist refund scheme
facility.
Providing documentary evidence of export
93. The conditions regarding documentary evidence are intended to be
contained in the Regulations. It is intended that when Australian
External Territory residents lodge a refund claim at a tourist
refund facility, they must provide documentary evidence to the
Australian Customs and Border Protection Service that:
. the goods have been exported; or
. evidence that they have put in place arrangements so that
the goods will be exported from Australia to an Australian
External Territory within 60 days after the day on which
the goods were acquired.
94. It is intended that the documentary evidence include:
. proof of Australian External Territory residence;
. a tax invoice that includes GST or GST and consequently
WET; and
. proof that the goods have been exported, or arrangements
have been put in place for the goods to be exported,
within 60 days after the day on which the goods were
acquired.
95. If documentary evidence of actual export within 60 days after the
day on which the goods were acquired, is not provided at the time
of making the tourist refund scheme claim, it is intended that such
evidence must be provided to the Australian Customs and Border
Protection Service within 90 days after the day on which the goods
were acquired.
96. The GST and/or WET refund will be paid once all documentation has
been received and processed by the Australian Customs and Border
Protection Service on the Commissioner's behalf.
1.
Julian, a resident of Norfolk Island (who is not registered
or required to be registered for GST), purchases a washing
machine for $400 on 3 September 2010. The supply to Julian
was a taxable supply. Julian makes arrangements for the
washing machine to be separately exported on 22 October
2010. Julian arrives at the airport on 15 October 2010 to
board his flight home. Prior to departure, Julian makes a
claim at the tourist refund scheme facility for a refund of
the GST paid on the washing machine. To make a claim Julian
provides the officer of Australian Customs and Border
Protection Service with:
. proof of Norfolk Island residence;
. a tax invoice showing the amount of GST paid;
. a bill of lading showing arrangements have been put in place
for the washing machine to be exported to Norfolk Island
within 60 days after the day on which the goods were
acquired; and
. other necessary documentation specified in the GST
Regulations.
As documentation of actual exportation was not provided at
this time, the refund claim is put on hold. After returning
home to Norfolk Island, Julian sends documentation to the
Australian Customs and Border Protection Service that the
washing machine was exported from Australia within 60 days
of its purchase. The Australian Customs and Border
Protection Service receive this documentation
on 29 October 2010 and complete Julian's refund claim.
Declaration by Australian External Territory recipients of GST-free
exports
97. Subsection 38-185(3) of the GST Act allows a supplier of goods to
export goods from Australia as a GST-free export. The Bill
clarifies that goods can only be sold as a GST-free export to an
Australian External Territory resident if the recipient declares to
the supplier that the goods were not the subject of a refund claim
for GST and/or WET under the tourist refund scheme. [Schedule 2,
item 1, paragraph 38-185(3)(f)]
98. The declaration must be presented to the supplier at the time
'sufficient documentary evidence of exportation' is provided. The
purpose of the declaration is to ensure that taxpayers do not
obtain GST-free supplies from suppliers and also make claims under
the tourist refund scheme.
99. This principle also seeks to ensure that a supply of wine is not
free of WET where a claim for a refund of the tax paid is also made
under the tourist refund scheme.
100. Schedule 6 to the Bill treats supplies to an associate made without
consideration as GST-free if exported from Australia (see
Chapter 6). Schedule 2 to the Bill replicates paragraph 38-
185(3)(f) for associates, requiring an associate to make a
declaration to the supplier that a claim has not been made under
the tourist refund scheme. [Schedule 6, item 2, subsection 38-
185(4), Schedule 2, item 3, paragraph 38-185(4)(f)]
1.
Kathryn, a resident of Cocos (Keeling) Islands, purchases a
television from an Australian retail outlet. The television
cost $3,000 including GST. The supply to Kathryn was a
taxable supply as the Australian retailer was not satisfied
the GST-free provisions of subsection 38-185(3) were met.
Namely, Kathryn did not provide sufficient documentary
evidence to show that the goods were exported.
Upon returning home, Kathryn fills out a declaration stating
a tourist refund scheme claim was not made for a refund of
the GST. Kathryn sends the completed declaration, along
with sufficient documentary evidence to show the goods were
exported, to the Australian retailer. After receiving the
declaration and evidence of export, the Australian retailer
provides a refund of GST to Kathryn and treats the supply as
a GST-free supply.
2.
Jimmy, a resident of Cocos (Keeling) Islands, purchases a
fridge from an Australian retail outlet. The fridge cost
$1,500 including GST. The supply to Jimmy was a taxable
supply as the Australian retailer was not satisfied the GST-
free provisions of subsection 38-185(3) were met. Namely,
Jimmy did not provide sufficient documentary evidence to
show that the goods were exported. However, upon leaving
Australia, Jimmy satisfies the amended rules of the tourist
refund scheme and receives a refund of the GST borne.
After returning home, Jimmy sends sufficient documentary
evidence to the Australian retailer to show the goods were
exported. Jimmy is not entitled to a refund of GST from the
supplier in this instance, as a refund of the GST borne was
supplied via the tourist refund scheme. In addition, Jimmy
did not provide the Australian retailer with a completed
declaration.
Application and transitional provisions
101. The amendments commence on 1 July 2010 and apply to goods purchased
on or after 1 July 2010. [Schedule 2, subitem 23(1)]
102. The amendments for associates in the new paragraph 38-185(4)(f)
apply in relation to goods acquired, and wine purchased, on or
after the day the Bill receives Royal Assent if this occurs after
1 July 2010. This ensures the declaration requirement that applies
to External Territory associates of suppliers making GST-free
exports does not come into operation before the associated
legislation in new paragraphs 38-185(4)(a) to (e) is enacted upon
Royal Assent. [Schedule 2, subitem 23(2), Schedule 6, item 2,
subsection 38-185(4)]
Chapter 3
Agency provisions
Outline of chapter
103. Schedule 3 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) to increase the range of entities
entitled to act as a principal for goods and services tax (GST)
accounting purposes.
104. All references in this chapter are to the GST Act unless otherwise
specified.
Context of amendments
105. The amendments allow those acting for a principal who are not
agents in the common law sense to access the simplified accounting
procedures in Subdivision 153-B of the GST Act.
106. Under the general GST accounting rules, supplies and acquisitions
made or facilitated through an agent are made by the principal.
The principal must account for the GST on such transactions between
the agent and the customer as part of the principal's own supplies
and acquisitions. The principal and agent must also separately
account for the GST and input tax credits on any commissions paid
to the agent for their services by the principal.
107. However, Subdivision 153-B allows registered entities to agree in
writing to treat the agent as a separate supplier and/or acquirer.
The effect of this is that the principal and agent are treated as
acting in a principal to principal relationship in relation to the
supplies and acquisitions identified in the agreement. This
simplifies the way principals and agents account for GST.
108. The Subdivision only applies to an entity that would qualify under
the common law as an agent. This means that the agent must be
authorised to act on behalf of the principal so as to create or
affect legal relations between the principal and third parties.
Representatives of the principal who are not agents under the
common law (for example, paying agents, billing agents and
commission agents) are not covered by the Subdivision.
109. For example, the Subdivision cannot be used by entities
('intermediaries') who make or receive payments on behalf of
another entity (the 'principal') for supplies or acquisitions to or
from third parties, but do not make those supplies or acquisitions
on that other entity's behalf. Nor can certain other service
providers who perform functions for the principal but fall short of
the legal definition of an agent, use Subdivision 153-B.
110. The Board of Taxation in its Review of the Legal Framework for the
Administration of the Goods and Services Tax recommended that the
domestic agency provisions (broadly Subdivision 153-B) be broadened
to include representatives that operate in a similar way to common
law agents but do not amount to common law agents, and to consider
simplifying the underlying principles.
111. The then Assistant Treasurer, in his Media Release No. 042 of
12 May 2009, accepted the recommendation. Allowing a wider range
of intermediaries to use Subdivision 153-B is part of a package of
measures designed to reduce the cost to businesses of complying
with the GST.
Summary of new law
112. The amendments will allow entities who facilitate supplies or
acquisitions for another to utilise the simplified accounting
procedures in Subdivision 153-B, subject broadly to the principal
and intermediary agreeing that the intermediary use these
accounting procedures in relation to certain transactions.
113. Under these simplified accounting procedures, taxable supplies and
acquisitions made by the principal to or from a third party will be
taken, for GST purposes, to be taxable supplies or creditable
acquisitions made by the intermediary to or from the third party.
Amongst other things, this means that intermediaries entering into
such arrangements will issue tax invoices for, and be liable for
GST payable on taxable supplies they are taken to make to a third
party. They also will be entitled to input tax credits for
creditable acquisitions they are taken to make from a third party.
These will be recorded on the intermediary's own Business Activity
Statement. Under the simplified accounting procedures, principals
will also be taken to either make or receive a supply to or from
the intermediary.
114. The amendments will reduce the compliance costs of GST accounting
where paying agents, billing agents and other transaction
facilitators are used by an entity.
Comparison of key features of new law and current law
|New law |Current law |
|Intermediaries that are |Only intermediaries that |
|not common law agents |are common law agents are|
|will be able to enter |able to enter into |
|into agreements with |agreements with |
|principals concerning the|principals concerning the|
|supplies and acquisitions|supplies and acquisitions|
|that they facilitate and |that they make for |
|have certain of those |principals and have |
|supplies and acquisitions|certain of those supplies|
|treated for GST purposes |and acquisitions treated |
|as taxable supplies and |for GST purposes as |
|creditable acquisitions |taxable supplies and |
|made by the intermediary |creditable acquisitions |
|to or from the principal.|made by the agent to or |
| |from the principal. |
Detailed explanation of new law
115. The amendments allow entities that facilitate the supplies or
acquisitions of an enterprise carried on by another entity through
acting as an intermediary to use Subdivision 153-B, irrespective of
whether the intermediary can legally bind the principal by their
acts. Billing and paying agents, among others, would be able to
access these accounting procedures. In short, the amendments
permit those that would be considered 'transaction facilitators'
but fall short of the requirements to be regarded as common law
agents to use the same accounting procedures in Subdivision 153-B.
116. To use Subdivision 153-B, the principal and the intermediary have
to enter into an agreement in writing that the intermediary will
facilitate supplies to third parties, acquisitions from third
parties or both on behalf of the principal. The agreement also
needs to specify the other matters required in section 153-50, such
as the kinds of supplies and acquisitions to which the agreement
will apply and the requirement for the intermediary to issue tax
invoices to third parties instead of the principal. The
intermediary and principal will have to be registered for GST
purposes. [Schedule 3, items 6 to 10, section 153-50]
117. If such an agreement is made, the principal and intermediary will
be taken, for GST purposes, as acting as separate suppliers and
acquirers in relation to the supplies and acquisitions covered by
the agreement. If the principal makes an acquisition that is
covered by the agreement from a third party and the intermediary
pays an amount on behalf of the principal to the third party
supplier, the intermediary will be taken as having made a
creditable acquisition. Additionally, the intermediary will be
taken to make a taxable supply of the same thing to the principal.
Any commission payable by the principal to the intermediary for the
intermediary's services is taken to be included in the value of the
taxable supply made by the intermediary to the principal. GST is
payable on one eleventh of this (increased) value. This
acquisition by the principal from the intermediary will be a
creditable acquisition by the principal if the acquisition of the
goods or services by the principal directly from the third party
would have been a creditable acquisition. [Schedule 3, items 18 to
24, section 153-60]
1.
Patrick is a paying agent for Melissa (but not a common law
agent). Patrick and Melissa have entered into an
arrangement for the purposes of Subdivision 153-B. As part
of carrying on her enterprise, Melissa orders $110 worth of
goods (including GST) from Jonathan, which he agrees to
supply. Patrick pays Jonathan $110 and takes delivery of
the goods from him which he forwards to Melissa. Patrick is
entitled to a $22 commission (including GST) from Melissa
for his services. Patrick has made a creditable acquisition
of goods for $110 from Jonathan and makes a taxable supply
of the same thing for $132 (including GST) to Melissa.
Patrick is entitled to a $10 input tax credit for the
acquisition he is taken to make from Jonathan and is liable
to pay $12 GST on the supply he is taken to make to Melissa.
Melissa is also entitled to an input tax credit of $12 as
the acquisition would have been a creditable acquisition had
it been acquired directly from Jonathan.
118. If a principal makes a taxable supply to a third party that is
covered by a Subdivision 153-B arrangement, and the intermediary
bills an amount to the third party customer on behalf of the
principal, then the provision of the goods or services to the
customer is taken to be a taxable supply by the intermediary to the
customer. Additionally, the principal is taken to make a taxable
supply to the intermediary of the same thing. Any commission
payable by the principal to the intermediary for the intermediary's
services is accounted for in the value of the taxable supply made
by the principal to the intermediary. GST is payable by the
principal on one eleventh of this (reduced) value. The
intermediary will be entitled to an input tax credit of an
equivalent amount. [Schedule 3, items 11 to 17, section 153-55]
119. Under the amendments the Commissioner of Taxation (Commissioner)
has the same power to issue determinations that separate party
accounting applies to certain arrangements between principals and
intermediaries as he does with respect to principals and common law
agents. Principals and intermediaries will have the same capacity
to opt out of these determinations as principals and agents.
[Schedule 3, items 25 to 28, section 153-65]
120. The amendments are not intended to affect the existing operation of
Subdivision 153-B with respect to common law agents.
Application and transitional provisions
121. The amendments will apply to supplies and acquisitions made by
intermediaries on or after 1 July 2010. A pre-existing
written agreement may be used as long as it meets the conditions in
section 153-50.
Consequential amendments
122. This Bill also makes certain consequential amendments to the GST
Act. Broadly, the amendments will allow an intermediary to treat
the value of any taxable supply that they are taken to make under
Subdivision 153-B, as being an amount equal to the 'value' of the
commission or similar payment that the principal is liable to pay
to them for their services relating to that supply. If an
intermediary chooses to work out their GST turnover in this manner,
their GST turnover would be equal to the amount that would have
been their GST turnover, had they not entered into a Subdivision
153-B arrangement. [Schedule 3, item 29, section 188-24]
123. There is a further consequential amendment to the Taxation
Administration Act 1953 (TAA 1953), which requires a record of the
arrangement between the intermediary and principal to be kept by
the principal. The amendment clarifies that a record of the
arrangement does not have to be kept by the intermediary.
[Schedule 3, item 30, subsection 382-5(5) of the TAA 1953]
Chapter 4
Gambling activities by entities outside Australia
Outline of chapter
124. Schedule 4 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) to clarify how the gambling
operator's margin is calculated where the supplies made by the
operator are GST-free.
125. All references in this chapter are to the GST Act unless otherwise
specified.
Context of amendments
126. The goods and services tax (GST) applies to gambling supplies on a
global rather than an individual basis. This reflects the
difficulty of applying GST to every gambling transaction and
allowing input tax credits for the prize money to be paid out on
each bet. Instead GST is applied to the gambling operator's
margin. This is intended to be broadly comparable to applying GST
to individual bets and allowing input tax credits to the operator
for prizes to be paid out.
127. The GST payable is based on a global formula, in which the net
amount of GST payable is related to the global GST amount. The
global GST amount is one-eleventh of the 'total amount wagered'
less the 'total monetary prizes' that the gambling operator is
liable to pay ('the gambling operator's margin'). The terms 'total
amount wagered' and 'total monetary prizes' are defined terms in
the GST Act. Broadly, 'the total amount wagered' is the total
value of bets placed with the gambling operator in a tax period,
excluding those bets that are GST-free.
128. There is uncertainty in calculating the margin where the bets
accepted are GST-free and prize money is to be paid out on those
bets. The total amount wagered is related to the GST on the
individual bets. For example, bets enjoyed by entities outside
Australia are not subject to GST and are excluded from the total
amount wagered. Consequently, total monetary prizes should exclude
the prize money to be paid out by the gambling operator on bets
made by entities outside Australia.
129. This is the basis on which the Commissioner of Taxation administers
the law. However, on a literal reading of the relevant section of
the GST Act, gambling operators may conclude that the prize money
liable to be paid to entities outside Australia is not excluded
from total monetary prizes.
130. The Board of Taxation in its Review of the Legal Framework for the
Administration of the Goods and Services Tax recommended that the
current GST treatment of gambling transactions by 'non-residents'
be confirmed. The Government accepted this recommendation in its
response to the report (then Assistant Treasurer's Media Release
No. 042 of 12 May 2009). The amendments provide a general
clarification of the GST treatment of prize money that gambling
operators are liable to pay out on GST-free supplies.
Summary of new law
131. Schedule 4 excludes from total monetary prizes amounts that the
gambling operator is liable to pay out on supplies (bets) that are
GST-free. This will mean that the prize money that the gambling
operator is liable to pay to entities outside Australia will be
excluded from total monetary prizes (because supplies made to
entities outside Australia are GST-free).
132. The change will apply to monetary prizes that arise on or after the
commencement of the first quarterly tax period after Royal Assent.
Comparison of key features of new law and current law
|New law |Current law |
|'Total monetary prizes' |'Total monetary prizes' |
|explicitly exclude prize |only explicitly exclude |
|money payable in relation|prize money payable in |
|to GST-free supplies. |relation to supplies that|
| |are GST-free if they |
| |arise out of gambling |
| |events conducted by |
| |gift-deductible entities |
| |or are otherwise GST-free|
| |under section 38-270 of |
| |the GST Act. |
Detailed explanation of new law
133. GST is applied to the gambling operator's margin, which reflects
the difference between bets accepted by the gambling operator and
the monetary prizes it is liable to pay out on the bets. Where the
individual bets are excluded from the gambling operator's global
GST amount, it is appropriate to exclude prize money liable to be
paid to entities outside Australia. This will ensure that, over
time, GST is applied to an amount that reflects the value added by
the gambling operator for consumption in Australia.
134. Under the current law, the GST payable on gambling is based on a
global formula, under which the net amount of GST payable is the
sum of the global GST amount and other GST less input tax credits
(that relate to amounts other than prize money). The global GST
amount (the gambling operator's margin) is one-eleventh of the
total amount wagered less the total monetary prizes. The total
amount wagered reflects the consideration for the gambling supplies
made by the gambling operator in a particular tax period. The
total monetary prizes are:
. the prize money that the gambling operator is liable to
pay in that tax period on the outcome of gambling events
(the gambling event or the gambling supplies do not have
to take place during that tax period); and
. any refunds of losses, whole or in part, that the gambling
operator is required to make in that tax period (the
refunds do not have to relate to gambling supplies in that
tax period).
135. Wagers by entities outside Australia are GST-free by virtue of item
2 or 3 of subsection 38-190(1) of the GST Act. Hence, they are not
taxable supplies. Since the total amount wagered includes only
gambling supplies, which are taxable supplies, the total amount
wagered will exclude bets made by entities outside Australia.
However, on a literal interpretation, total monetary prizes include
prize money liable to be paid out on all bets, including bets by
entities outside Australia. Total monetary prizes include any
amount of money the gambling operator is liable to pay out on the
outcome of gambling events and these amounts are not restricted to
gambling supplies. This would mean the gambling operator's margin
does not reflect the value added over time for consumption in
Australia.
136. Under the amendments, amounts are not included in total monetary
prizes where the amounts are prize money liable to be paid out on
GST-free wagers. Currently, the GST law only excludes from the
global GST amount prize money liable to be paid out in relation to
wagers that are GST-free under subsection 38-270 (that is, broadly,
prize money payable on gambling competitions run by gift-deductible
entities). This amendment will mainly affect prize money payable
to entities outside Australia on their wagers. However, the
monetary prizes liable to be paid out in relation to other GST-free
wagers would be excluded from the global GST amount also, even
where the wagers were not placed with gift-deductible entities.
The treatment of gambling competitions run by gift-deductible and
similar entities is not affected by the amendments. [Schedule 4,
item 1, subsection 126-10(3)]
137. For prize money to be excluded from total monetary prizes, the
prize money must relate to supplies that reflect the issue of a
ticket, however described, or acceptance of a bet in a gambling
event (as in the current law). The amendments do not alter the
nexus required between supplies and the liability to pay prize
money under the current law.
1.
David is a gambling operator who only accepts wagers from
entities outside Australia. In the global GST amount, the
total amounts wagered and the total monetary prizes are zero
and David has no GST liability on his margin (although he
may have a GST liability or refund as a result of supplies
and acquisitions he makes that do not relate to the outcome
of gambling events).
Application and transitional provisions
138. The amendments apply to monetary prizes for which liability arises
during or after the first quarterly tax period that commences on or
after Royal Assent. The gambling operator itself need not have a
tax period commence at this time or pay GST quarterly. [Schedule
4, item 2]
139. The supplies or gambling events to which the monetary prizes relate
do not have to arise in the tax period during which the liability
for the prize money arises. This means that the gambling operator
will not have to match up its monetary prizes with the particular
supplies on which the liability to pay arises in order to determine
the start date of the measure (or for general GST accounting).
140. These amendments do not affect the treatment of gambling supplies.
Chapter 5
Recovering overpaid refunds
Outline of chapter
141. Schedule 5 to this Bill amends the:
. A New Tax System (Goods and Services Tax) Act 1999
(GST Act) so that an overpaid refund under section 35-5 of
that Act is treated as an amount due and payable from the
date of the overpayment;
. A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) so
that an overpaid refund under section 17-5 of that Act is
treated as an amount due and payable from the date of the
overpayment; and the
. Fuel Tax Act 2006 (Fuel Tax Act) so that an overpaid
refund under section 61-5 of that Act is treated as an
amount due and payable from the date of the overpayment.
Context of amendments
142. The provisions in the goods and services tax (GST), luxury car tax
(LCT) and fuel tax legislation that deal with refunds and payments
do not specify that overpaid refunds are due and payable from the
date of overpayment. This means that underpayments of liabilities
are treated differently to overpaid refunds, leading to a
difference in the way the general interest charge (GIC) applies.
This outcome is contrary to the policy intent.
143. The purpose of these amendments is to overcome this unintended
result and ensure consistent treatment between those taxpayers who
incorrectly determine their GST or other indirect tax liabilities,
and taxpayers who incorrectly determine the amount of their refund.
144. The Board of Taxation, in its review of the legal framework for the
administration of the GST, recommended that the law be amended to
allow overpaid refunds to be treated as an amount of tax that
becomes payable when either refunded to the taxpayer or applied
against a tax debt (recommendation no. 44).
145. The Government's response to the Board of Taxation review measures
was announced in the then Assistant Treasurer's Media Release No.
042 of 12 May 2009 in the context of the 2009-10 Budget. In
particular, the Government accepted the majority of the Board's
recommendations, including in relation to overpaid refunds.
Summary of new law
146. This Bill amends the GST Act to recover overpaid amounts paid where
a GST return for a tax period has a net amount less than zero.
[Schedule 5, item 2, subsection 35-5(2)]
147. The amendment provides that if an amount refunded under section 35-
5 of the GST Act for a tax period is later reduced to a lesser
amount by an assessment that is made or amended by the Commissioner
of Taxation (Commissioner) or by a taxpayer revising their business
activity statement (BAS), the amount by which the overpaid refund
has been reduced is treated as if it were GST that became due and
payable from the time it was paid to the taxpayer or applied
against a tax debt. [Schedule 5, item 2, subsection 35-5(2)]
148. The Bill amends the LCT Act to recover an overpaid refund of LCT
credits. [Schedule 5, item 4, section 17-15]
149. The amendment provides that an overpayment of a LCT credit to a non-
registered entity is treated as if it were LCT that became due and
payable from the date it was paid or applied to the entity.
[Schedule 5, item 4, section 17-15]
150. The Bill amends the Fuel Tax Act to recover an overpaid refund of
fuel tax credits. [Schedule 5, item 6, subsection 61-5(3)]
151. The amendment provides that if an amount refunded under section 61-
5 of the Fuel Tax Act for a tax period or fuel tax return period is
subsequently reduced to a lesser amount by the Commissioner making
an assessment or amending an assessment or by a taxpayer revising
their fuel tax return, the amount by which the overpaid refund has
been reduced is treated as if it were a net fuel amount that became
due and payable from the time it was paid to the taxpayer or
applied against a tax debt. [Schedule 5, item 6, subsection 61-
5(3)]
Comparison of key features of new law and current law
|New law |Current law |
|Overpaid refund of net |Overpaid refund of net |
|amount |amount |
|Where an amount refunded |The Commissioner applies |
|under section 35-5 of the|the Taxation |
|GST Act has been |Administration Act 1953 |
|overpaid, the amount by |(TAA 1953) to treat |
|which the overpaid refund|overpaid refunds of a net|
|exceeds entitlements is |amount as administrative |
|treated as if it were GST|overpayments with the GIC|
|that became due and |calculated on the |
|payable from the time it |resulting running balance|
|was paid to the taxpayer |account deficit debt when|
|or applied against a tax |the administrative |
|debt. |overpayment is allocated |
|Overpayments under |to the running balance |
|section 35-5 of the GST |account. |
|Act are subject to the | |
|GIC from the date of | |
|overpayment. | |
|Overpaid refund of LCT |Overpaid refund of LCT |
|credits |credits |
|An overpayment of a LCT |The Commissioner applies |
|credit to a |the TAA 1953 to treat |
|non-registered entity is |overpaid refunds of LCT |
|treated as if it were LCT|credits as administrative|
|that became due and |overpayments with the GIC|
|payable from the date it |calculated on the |
|was paid or applied to |resulting running balance|
|the entity. |account deficit debt when|
|Overpayments under |the administrative |
|section 17-5 of the LCT |overpayment is allocated |
|Act are subject to the |to the running balance |
|GIC from the date of |account. |
|overpayment. | |
|Overpaid refund of fuel |Overpaid refund of fuel |
|tax credits |tax credits |
|If an amount refunded |The Commissioner applies |
|under section 61-5 of the|the TAA 1953 to treat |
|Fuel Tax Act for a tax |overpaid refunds of fuel |
|period or fuel tax return|tax credits as |
|period has been overpaid,|administrative |
|the amount by which the |overpayments with the GIC|
|overpaid refund exceeds |calculated on the |
|entitlements is treated |resulting running balance|
|as if it were a net fuel |account deficit debt when|
|amount that became due |the administrative |
|and payable from the time|overpayment is allocated |
|it was paid to the |to the running balance |
|taxpayer or applied |account. |
|against a tax debt. | |
|Overpayments under | |
|section 61-5 of the Fuel | |
|Tax Act are subject to | |
|the GIC from the date of | |
|overpayment. | |
Detailed explanation of new law
152. Under the indirect tax law, taxpayers are obliged to correctly
determine their net amount for each tax period. The purpose of
these amendments is to ensure consistent treatment between those
taxpayers who incorrectly determine their GST or other indirect tax
liabilities, and taxpayers who incorrectly determine the amount of
their refund.
153. Taxpayers who understate their liability to pay tax incur the GIC
on the underpaid amounts from when they should have made payment of
the correct amount (that is, the due date for payment for the
relevant tax period). Under the amendments, taxpayers who are
overpaid refunds will be liable for GIC from the date that they
receive the benefit of the overpayment. This is seen as an
appropriate and equitable outcome.
154. However, the Commissioner has discretion to remit GIC in part or in
full in appropriate circumstances. This will include circumstances
where it is fair and reasonable to do so, based on the particular
facts of each individual case.
Overpaid refund of net amount
155. The net amount for a tax period is worked out under section 17-5 of
the GST Act as, broadly, the sum of the amount of GST payable less
any input tax credit entitlements. The net amount includes any
amount of wine tax or wine tax credits applicable under the A New
Tax System (Wine Equalisation Tax) Act 1999 (WET Act) for the
period and any amount of LCT payable under the LCT Act for the
period.
156. Under section 33 of the GST Act, if a net amount for a tax period
is greater than zero, taxpayers have to pay the net amount to the
Commissioner on or before a certain date. Any amount that remains
unpaid after the due date is subject to the GIC under section 105-
80 of Schedule 1 to the TAA 1953.
157. Under section 35 of the GST Act, if a net amount for a tax period
is less than zero, the Commissioner must pay you a refund.
158. Where a taxpayer revises their BAS or the Commissioner assesses
that a refund paid under section 35-5 of the GST Act has been
overpaid, the amount by which the overpaid refund has been reduced
is not currently a 'liability' that is due and payable from a
certain date under the GST Act. Nor is the overpaid refund an
amount that is subject to the imposition of the GIC under section
105-80 of Schedule 1 to the TAA 1953.
159. The Commissioner applies the TAA 1953 to treat refunds overpaid
under section 35-5 as administrative overpayments with GIC
calculated on the resulting running balance account deficit debt
when the administrative overpayment is allocated to the running
balance account (section 8AAZF). An administrative overpayment is
an amount that the Commissioner has paid to a person by mistake,
being an amount to which the person is not entitled (subsection
8AAZN(3)).
160. The amendments will ensure that if an amount refunded under section
35-5 of the GST Act for a tax period is subsequently reduced to a
lesser amount by the Commissioner making an assessment or amending
an assessment or by a taxpayer revising their BAS, the amount by
which the overpaid refund has been reduced is treated as if it were
GST that became due and payable from the time it was paid to the
taxpayer or applied against a tax debt. [Schedule 5, item 2,
subsection 35-5(2)]
1.
Sarah lodges a BAS for the September 2008 quarter. The net
amount for the tax period is -$700. As the net amount is
less than zero the Commissioner pays her a refund of $700
under section 35-5 of the GST Act.
Subsequently, the Commissioner makes a reassessment of
Sarah's net amount for the tax period. The reassessed net
amount is -$500.
The Commissioner's reassessment results in an excess amount
paid under subsection 35-5(1) of $200. The $200:
. will be treated as if it were GST that became due and
payable from the time the original refund was paid or
applied;
. is the relevant amount for which the Commissioner can
demand payment under section 255-5 of Schedule 1 to the
TAA 1953; and
. is subject to the GIC under paragraph 105-80(2)(b) of
Schedule 1 to the TAA 1953.
Overpaid refund of luxury car tax credits
161. The LCT Act and the WET Act provide for the payment of credits in
certain circumstances to non-registered entities. These credits do
not form part of a net amount and are claimed on an approved form.
Section 17-25 of the WET Act imposes a liability on non-registered
entities where wine tax credits have been overpaid by making the
overpaid credit an amount of wine tax due and payable from the date
of overpayment. There is no corresponding provision in the LCT Act
that makes an overpayment of an amount of LCT credit due and
payable from the date of the overpayment to a non-registered
entity.
162. The Commissioner applies the TAA 1953 to treat overpaid refunds of
LCT credits as administrative overpayments with the GIC calculated
on the resulting running balance account deficit debt when the
administrative overpayment is allocated to the running balance
account.
163. The amendments will ensure that an overpayment of a LCT credit to a
non-registered entity will be treated as if it were LCT that became
due and payable from the date it was paid or applied to the entity.
[Schedule 5, item 4, section 17-15]
1.
Section 17-5 of the LCT Act provides for the payment of
credits in certain circumstances to non-registered
recipients of a LCT supply.
Simon is not registered for the GST. He has a credit
entitlement under section 17-5 of the LCT Act and no one
else has made a valid claim for a credit in relation to the
credit entitlement. However, the Commissioner has overpaid
Simon $300 of LCT credit. The $300 overpaid:
. is treated as if it were LCT that became due and payable
from the date of overpayment;
. is the relevant amount for which the Commissioner can demand
payment under section 255-5 of Schedule 1 to the TAA 1953;
and
. is subject to the GIC under paragraph 105-80(2)(b) of
Schedule 1 to the TAA 1953.
Overpaid refund of fuel tax credits
164. Where a taxpayer revises their fuel tax return or the Commissioner
assesses that a refund of fuel tax credits under section 61-5 of
the Fuel Tax Act has been overpaid, the amount by which the
overpaid refund has been reduced is not currently a 'liability' for
the purposes of the Fuel Tax Act. Therefore, the imposition of the
GIC does not arise under the indirect tax provisions of the TAA
1953.
165. The Commissioner applies the TAA 1953 to treat overpaid refunds of
fuel tax credits as administrative overpayments with the GIC
calculated on the resulting running balance account deficit debt
when the administrative overpayment is allocated to the running
balance account.
166. The amendments ensure that, if an amount refunded under section 61-
5 of the Fuel Tax Act for a tax period or a fuel tax return period
is subsequently reduced to a lesser amount by the Commissioner
making an assessment or amending an assessment or by a taxpayer
revising their fuel tax return, the amount by which the overpaid
refund has been reduced is treated as if it were a net fuel amount
that became due and payable from the time it was paid to the
taxpayer or applied against a tax debt. [Schedule 5, item 6,
subsection 61-5(3)]
1.
Luke lodges a fuel tax return for the March 2008 quarter.
The net fuel amount for the fuel tax return period is -$700.
As the net fuel amount is less than zero the Commissioner
pays him a refund of $700 under section 61-5 of the Fuel Tax
Act.
Subsequently, the Commissioner makes a reassessment of
Luke's net fuel amount for the tax period. The reassessed
net fuel amount is
-$500.
The Commissioner's reassessment results in an excess amount
paid under subsection 61-5(3) of $200. The $200:
. will be treated as if it were a net fuel amount that became
due and payable from the time the original refund was paid
or applied;
. is the relevant amount for which the Commissioner can demand
payment under section 255-5 of Schedule 1 to the TAA 1953;
and
. is subject to the GIC under paragraph 105-80(2)(a) of
Schedule 1 to the TAA 1953.
Application and transitional provisions
167. The amendment applies to overpayments made by the Commissioner from
the start of the first quarterly tax period after Royal Assent.
[Schedule 5, items 3, 5 and 7]
Consequential amendments
168. As a consequence of an additional subsection in Division 35 of the
GST Act, an amendment has been made to subsection 250-10(2) of
Schedule 1 to the TAA 1953 to include the new provision in that
Schedule as a tax-related liability.
169. As a consequence of an additional provision in Division 61 of the
Fuel Tax Act, an amendment has been made to the table in
subsection 250-10(2) of Schedule 1 to the TAA 1953 to include the
new provision in that Schedule as a tax-related liability.
170. Amendments to the LCT Act to include a provision similar to section
17-25 of the WET Act requires a consequential amendment to the
table in subsection 250-10(2) of Schedule 1 to the TAA 1953. The
table is amended to include a reference to section 17-15 of the LCT
Act. The table is also amended to include a reference to section
17-25 of the WET Act.
Chapter 6
GST and associates provisions
Outline of chapter
171. Schedule 6 to this Bill amends the A New Tax System (Goods and
Services Tax) Act 1999 (GST Act) to ensure the goods and services
tax (GST) treatment of a supply to an associate without
consideration is as an input taxed supply, a GST-free supply, or a
financial supply where appropriate.
172. The amendments also ensure that a supply to an associate that would
be a sale (or some other particular kind of supply) if made for
consideration will be taken to be a supply of such a kind, despite
there being no consideration. Similarly, an acquisition from an
associate that would be by way of sale (or some other particular
means) if consideration was provided will be taken to be an
acquisition by that means despite there being no consideration.
173. These provisions take effect from the date of Royal Assent.
Context of amendments
174. One of the conditions for a supply being a taxable supply is that
it is made for consideration. However, associates can make
supplies for no consideration. Specific rules in the GST law
provide that if a supply is made to an associate for no
consideration and the associate is not entitled to a full input tax
credit, the supply may still be a taxable supply with GST payable
calculated by reference to the GST inclusive market value of the
thing that is transferred.
175. The GST law further provides that a supply is not a taxable supply
to the extent that it is GST-free or input taxed. However, there
are a number of provisions dealing with GST-free and input taxed
supplies that require that the supply is 'for consideration' or
refer to a 'sale'.
176. As a result, an otherwise input taxed or GST-free supply to an
associate (if made for consideration) may be treated as a taxable
supply if it is for no consideration.
177. The Board of Taxation, in its review of the legal framework for the
administration of the GST, recommended that the GST law be amended
to remedy the interaction of the associate provisions and other
provisions such as those relating to input taxed and GST-free
supplies (recommendation no. 46).
178. The Government's response to the Board of Taxation review measures
was announced in the then Assistant Treasurer's Media Release No.
042. of 12 May 2009 in the context of the 2009-10 Budget. In
particular, the Government accepted the majority of the Board's
recommendations, including in relation to the associate provisions.
Summary of new law
179. Schedule 6 to the Bill inserts new sections 72-20 and 72-25 in the
GST Act in relation to supplies and acquisitions between associates
without consideration.
180. Section 72-25 provides that in the case of supplies between
associates, the fact that there may be no consideration does not
prevent such supplies from being input taxed, GST-free supplies, or
financial supplies.
181. Subsection 72-20(1) provides that where a supply between associates
would be a sale or some other kind of supply apart from a lack of
consideration, it will be taken to be a supply of that kind.
Subsection 72-20(2) provides that if an acquisition from an
associate would be by sale or some other means apart from a lack of
consideration, the acquisition is taken to be an acquisition by
that means.
182. Schedule 6 also amends section 38-185 of the GST Act in relation to
the export of goods that are GST-free if certain conditions are
met. In particular, new item 2A is inserted into the table in
subsection 38-185(1) to provide that a supply of goods without
consideration to an associate is GST-free if the supplier exports
the goods from Australia.
183. New subsection 38-185(4) sets out the conditions where a supplier
is treated as having exported the goods from Australia where they
are supplied to an associate who is not registered or required to
be registered who in turn exports the goods from Australia.
184. The amendments in Schedule 6 to the Bill commence on the date of
Royal Assent.
Comparison of key features of new law and current law
|New law |Current law |
|Input taxed and GST free |Input taxed and GST free |
|supplies |supplies |
|A supply to an associate |The interaction between |
|may be an input taxed, |the provisions dealing |
|GST-free, or a financial |with supplies between |
|supply despite the supply|associates and the |
|being without |provisions providing that|
|consideration. |certain supplies are |
| |input taxed or GST-free |
| |may result in anomalous |
| |GST treatment. |
| |In particular, the |
| |current provisions may |
| |apply to treat an |
| |otherwise input taxed or |
| |GST-free supply to an |
| |associate (if it had been|
| |made for consideration) |
| |as a taxable supply where|
| |it is made for no |
| |consideration. |
|Sales between associates |Sales between associates |
|A supply to an associate |A supply between |
|may be taken to be a sale|associates may not be a |
|or some other kind of |sale or a supply of some |
|supply despite being |other kind if the supply |
|without consideration. |is made for no |
|Similarly, if an |consideration. |
|acquisition from an |An acquisition between |
|associate would be by |associates that would be |
|sale or some other means,|an acquisition from an |
|the acquisition may be |associate by sale or some|
|taken to be an |other means may not be |
|acquisition by that means|taken to be an |
|despite being without |acquisition by that means|
|consideration. |if there is no |
| |consideration. |
|GST-free export of goods |GST-free export of goods |
|A supply is GST-free |Where a supply of goods |
|where there is a supply |between associates is |
|of goods between |without consideration and|
|associates without |the supplier exports the |
|consideration and the |goods, the operation of |
|supplier has exported the|the GST-free export rule |
|goods from Australia. |is uncertain (as the |
| |60-day time period for |
| |export never starts). |
Detailed explanation of new law
185. The interaction between the provisions dealing with supplies
between associates and the provisions providing that certain
supplies are input taxed or GST-free may result in anomalous
outcomes.
186. Section 9-5 of the GST Act sets out the requirements for a supply
to be a taxable supply, including that the supply is made for
consideration. Section 9-5 further provides that a supply is not a
taxable supply to the extent that it is GST-free or input taxed.
Section 9-30 provides that a supply is GST-free if it is GST-free
under Division 38 and is input taxed if it is input taxed under
Division 40 including financial supplies. There are a number of
provisions dealing with GST-free and input taxed supplies that
require that the supply is 'for consideration' or refer to a
'sale'.
187. Subsection 72-5(2) specifically provides that a supply to an
associate without consideration may be a taxable supply despite the
requirement in paragraph 9-5(a) that a taxable supply must be for
consideration. Division 72 creates a GST liability on a supply by
deeming a value of the supply equal to the GST exclusive market
value of the supply but does not deem any consideration for the
supply (see section 72-10). Therefore, an otherwise input taxed or
GST-free supply to an associate (if made for consideration) may be
treated as a taxable supply if it is without consideration.
188. There are two main areas where a supply, that would otherwise be an
input taxed supply if made for consideration, may be a taxable
supply where the supply is to an associate without consideration:
. a transfer of residential premises (that is, not new
residential premises or commercial residential premises)
to an associated entity that is either not registered or
has acquired the supply for a purpose that is not solely
creditable; and
. a financial supply made to an associated entity that is
either not registered or has acquired the supply for a
purpose that is not solely creditable.
189. A supply is input taxed under section 40-65 if it is a sale of
residential premises (other than new residential premises or
commercial residential premises). It is arguable that a supply
between associates without consideration is not a 'sale' (for
example, an in specie distribution of residential premises). Under
this view, such a supply is not a 'sale', cannot be an input taxed
supply under section 40-65 and may be treated as a taxable supply.
190. A similar outcome to the sale of residential premises arises in
relation to financial supplies. A financial supply is defined in
regulation 40-5.09 of the A New Tax System (Goods and Services Tax)
Regulations 1999 to be the provision, acquisition or disposal of a
financial interest for, inter alia, consideration. Therefore, a
transaction between associates involving a financial interest
cannot be an input taxed financial supply if it is without
consideration and may instead be subject to GST. This can arise,
for example, by way of an in specie distribution of a parcel of
shares from a trust (registered) to a beneficiary of the trust (not
registered or required to be registered).
191. The result in the case of residential premises and financial
supplies is inconsistent with the intention of the GST law. That
is, the fact that a supply to an associate is without consideration
should not result in an otherwise input taxed supply being treated
as a taxable supply.
192. The amendments ensure that Division 72 of the GST Act applies such
that, provided all other conditions are satisfied, a supply to or
from an associate may be an input taxed supply, a GST-free supply,
or a financial supply despite being without consideration.
[Schedule 6, item 3, section 72-25]
193. The reference to a financial supply in section 72-25 ensures that a
supply between associates that would have been an input taxed
financial supply had it been made for consideration, is both an
input taxed supply and a financial supply for the purposes of the
GST law. If section 72-25 did not contain this reference, it would
operate to ensure that such a supply was input taxed, but it would
not expressly specify that the supply was also a financial supply.
This may have given rise to some uncertainty in applying a number
of provisions in the GST law, such as section 189-15 (regarding the
financial acquisitions threshold), which require an entity to
establish whether an acquisition it makes relates to the making of
financial supplies.
194. In addition, the amendments ensure that a supply to an associate,
that would otherwise be a sale or some other kind of supply if it
was for consideration, is taken to be a sale or that other kind of
supply despite the lack of consideration. Similarly, if, apart
from a lack of consideration, an acquisition from an associate
would be by sale or some other means, the acquisition is taken to
be an acquisition by that means. [Schedule 6, item 3, subsections
72-20(1) and (2)]
195. However, these amendments may not be sufficient to ensure the
appropriate GST treatment in relation to the supply of goods
between associates without consideration where the supplier has
exported the goods from Australia.
196. Under Subdivision 38-E of the GST law, one of the conditions for a
supply to be GST-free is that the supplier exports goods from
Australia before, or within 60 days after, the day on which the
supplier receives any of the consideration for the supply (see
subitem 1(a) in the table in section 38-185). However, if before
any of the consideration for the supply is received, the supplier
gives an invoice for the supply, then the supplier must export the
goods within 60 days of the day the invoice was given (see subitem
1(b) in the table in section 38-185). Broadly, the 60 day
requirement in item 1 in the table in subsection 38-185(1) begins
from an event that could trigger attribution of any GST payable (in
the event the relevant supply is taxable) or any input tax credit
entitlement.
197. In circumstances where the supply is between associates without
consideration, neither of the conditions in item 1 in section 38-
185 can be satisfied. This is because the first condition requires
that the supplier actually receive consideration (see subitem
1(a)). Further, the second condition refers to an invoice issued
by the supplier before any consideration is received - that is, it
is referring to a day that occurs before the day on which the
supplier received consideration (see subitem 1(b)). In addition,
the term invoice is defined in section 195-1 of the GST Act to mean
a document notifying an obligation to make a payment. Thus, in
cases involving no consideration, the second condition in item 1
could not be satisfied in any event.
198. As a result, such a supply could be treated as a taxable supply if
all the other conditions in section 9-5 are met. This outcome is
inconsistent with the broad proposal that a supply between
associates should not be prevented from being an input taxed or GST-
free supply on the basis that it is without consideration.
199. In order to address this outcome, the amendments provide that a
supply of goods without consideration to an associate is GST-free
if the supplier exports the goods from Australia. [Schedule 6,
item 1, item 2A in the table after subsection 38-185(1)]
200. Under the current law, if a supply of goods is made between
associates without consideration and the supplier exports the
goods, any GST payable on the supply would be attributable in
accordance with the attribution rule in section 72-15. Under this
section, any GST payable on the supply would be attributable to the
tax period in which the supplier exports the goods. As a result, a
60-day period is not required as, at the time a supplier would be
required to attribute any GST, the supplier (and recipient) would
know whether the supply is taxable or GST-free, that is, they would
know whether the goods have been exported.
201. The amendments also set out the conditions where a supplier is
treated as having exported the goods from Australia despite the
goods actually being exported by the supplier's associate. These
conditions include that the goods are supplied to an associate who
is not registered or required to be registered who in turn exports
the goods from Australia. This ensures that a supply made from an
entity to an unregistered associate without consideration will
still be GST-free if the acquiring associate exports the goods
within 60 days after the goods were delivered or made available in
Australia to the associate whichever is the earliest. [Schedule 6,
item 2]
Application and transitional provisions
202. The amendments made by Schedule 6 commence on the date of Royal
Assent. [Schedule 6, item 4]
Index
Schedule 1: Time limit on entitlements to input tax credits and fuel tax
credits
|Bill reference |Paragraph |
| |number |
|Items 1 to 6, 8, 13 to 15 and 18 |1.66 |
|Item 7, sections 93-1 and 93-5 of the GST |1.13 |
|Act, item 17, section 47-5 of the Fuel Tax | |
|Act | |
|Item 7, subsection 93-10(1) of the GST Act, |1.19 |
|item 17, subsection 47-10(1) of the Fuel Tax| |
|Act | |
|Item 7, subsection 93-10(2) of the GST Act, |1.22 |
|item 17, subsection 47-5(2) of the Fuel Tax | |
|Act | |
|Item 7, subsection 93-10(3) of the GST Act, |1.27 |
|item 17, subsection 47-5(3) of the Fuel Tax | |
|Act | |
|Item 7, paragraph 93-10(4) of the GST Act, |1.32 |
|item 14, paragraph 47-5(4) of the Fuel Tax | |
|Act | |
|Item 7, subparagraph 93-10(4) of the GST |1.33 |
|Act, item 17, paragraph 47-5(4) of the Fuel | |
|Tax Act | |
|Item 7, section 93-15 |1.44 |
|Items 9 and 10 |1.67 |
|Item 11, section 133-5 |1.50 |
|Item 11, subsection 133-5(1) |1.56 |
|Item 11, paragraph 133-5(1)(a) |1.58 |
|Item 11, paragraph 133-5(1)(c) |1.57 |
|Item 11, subsection 133-5(2) |1.59 |
|Item 11, subsection 133-5(3) and item 12 |1.60 |
|Item 11, section 133-10 |1.62 |
|Item 16, subsection 105-55(2A) |1.34 |
|Item 19 |1.63 |
|Item 20 |1.64 |
Schedule 2: Refund collection system
|Bill reference |Paragraph |
| |number |
|Item 1, paragraph 38-185(3)(f) |2.27 |
|Item 7, subsection 168-5(1A) of the GST Act,|2.17 |
|item 14, subsection 25-5(1A) of the WET Act | |
|Item 11, section 168-10 of the GST Act, item|2.19 |
|18, section 25-10 of the WET Act | |
|Subitem 23(1) |2.31 |
|Subitem 23(2), Schedule 6, item 2, |2.32 |
|subsection 38-185(4) | |
Schedule 3: Agency provisions
|Bill reference |Paragraph |
| |number |
|Items 6 to 10, section 153-50 |3.14 |
|Items 11 to 17, section 153-55 |3.16 |
|Items 18 to 24, section 153-60 |3.15 |
|Items 25 to 28, section 153-65 |3.17 |
|Item 29, section 188-24 |3.20 |
|Item 30, subsection 382-5(5) of the TAA 1953|3.21 |
Schedule 4: Gambling supplies to entities outside Australia
|Bill reference |Paragraph |
| |number |
|Item 1, subsection 126-10(3) |4.13 |
Schedule 5: Recovering overpaid refunds
|Bill reference |Paragraph |
| |number |
|Item 2, subsection 35-5(2) |5.6, 5.7, 5.20|
|Items 3, 5 and 7 |5.27 |
|Item 4, section 17-15 |5.8, 5.9, 5.23|
|Item 6, subsection 61-5(3) |5.10, 5.11, |
| |5.26 |
Schedule 6: Interaction of associate provisions
|Bill reference |Paragraph |
| |number |
|Item 1, item 2A in the table after |6.29 |
|subsection 38-185(1) | |
|Item 2 |6.31 |
|Item 2, subsection 38-185(4), Schedule 2, |2.30 |
|item 3, paragraph 38-185(4)(f) | |
|Item 3, subsections 72-20(1) and (2) |6.24 |
|Item 3, section 72-25 |6.22 |
|Item 4 |6.32 |
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