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In a media release issued on 6 February 2009, the Assistant Treasurer, Chris Bowen, announced that the Government will amend the GST law, with effect from 1 July 2000, to ensure that representatives of incapacitated entities are liable for GST on post-appointment transactions. The Government will shortly release and consult on draft legislation to implement this tax measure.

The Federal Court found in FCT v PM Developments Pty Ltd [2008] FCA 1886 that the GST liability for a transaction occurring during the period of the representative's appointment is the liability of the company in liquidation rather than the liability of the representative.

"The Court's finding is contrary to the underlying policy intention and the way the law has been administered since the introduction of GST. In the interests of providing certainty for all representatives of incapacitated entities, the Government is announcing today its intention to amend the GST law to restore the status quo," Mr Bowen said.

For a copy of the Minister's media release, No 2009/005, 6 February 2009, go here.

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