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15 Dec 11 NTLG GST Sub-committee meeting

Last Tuesday 6 December 2011, Suzanne Kneen FTIA (Blake Dawson) and Tax Counsel Deepti Paton ATIA attended a meeting of the NTLG GST Sub-committee. At this meeting, participants discussed a number of issues including:

  • The ATO’s response to an adverse decision in the Commissioner’s application for special leave to appeal to the High Court in the Multiflex case. The ATO has been over the last few months clearing the backlog of refunds withheld for integrity checks in order to minimise the number of taxpayers affected by the decision in Multiflex. On a go-forward basis, the ATO will comply with the decision and release refunds after they have been processed. However, the ATO will continue to run refunds through fraud models prior to issue and is developing rapid response teams to take action within 24 to 48 hours of submission of the GST Return where fraud is suspected. The ATO will also henceforth be initiating review and audit action to determine the legitimacy of registrations for GST purposes.  
  • Tax invoices. The ATO noted that they had received a lot of comments on the draft ruling regarding the circumstances when the Commissioner will exercise his discretion to accept a document as a tax invoice. The ATO noted that according to advice received, the previous treatment constituted an administrative discretion and therefore could only be exercised for a document when it came into existence i.e. therefore the ATO could not provide a ruling on whether the Commissioner would exercise his discretion.  The ATO is now of the view that the ‘broad-brush’ approach previously taken is inappropriate. As a result, the ATO's proposed approach (subject to further consultation) is to issue legislative determinations. Some members noted concern over whether legislative instruments could be regularly updated as necessary. Some members expressed a preference for a more general determination.
  • The Tax Institute expressed a preference for finalised guidelines on the preparation of indirect tax sharing agreements. The ATO agreed to arrange a conference call in early 2012 to resolve outstanding issues and finalise the guidelines as a priority.
  • The ATO will soon be issuing an ATO ID in relation to the GST-free going concern provisions and specifically on the supplies of things being used in an enterprise that are not necessary for the continued operation of that enterprise, and which do not form part of the ‘supply of a going concern. This is subject to further consultation.
  • The ATO reiterated that taxpayers cannot self-assess the application of the Commissioner’s discretion under section 105-65. However, it was noted that there are circumstances when section 105-65 does not apply. While the discretion must be sought in all cases where the recipient is registered, where the recipient is not registered the taxpayer must only seek the application of the discretion where the recipient has not been reimbursed i.e.  where the recipient is unregistered and is reimbursed (the exact recipient and the exact amount) then there is no need to apply for the Commissioner’s discretion.
  • The ATO will shortly be issuing a draft PS LA in relation to the preservation of status quo policy previously set out in PLSA 2002/12.

Members who seek further information in relation to the above are encouraged to contact us at Tax Policy.

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