30 Mar 12 NTLG GST Sub-Committee Meeting
Last Wednesday 21 March 2012, Suzanne Kneen FTIA (Ashurst) and Tax Counsel Stephanie Caredes ATIA attended a meeting of the NTLG GST Sub-Committee. At this meeting, participants discussed a number of issues including:
- MT 2010/1 and section 105-65 Schedule 1 Taxation Administration Act 1953 (Cth) - members discussed the implications of section 105-65 (restriction on GST refunds) and the requirement for amendments to be made to Miscellaneous Tax Ruling MT 2010/1 to reflect the outcome of the case International All Sports Ltd & Anor v Commissioner of Taxation  FCA 824 with respect to the operation of section 105-65. Members also raised concerns in relation to the operation of the discretion contained section 105-65 within the context of the pending "self-assessment" regime that will apply to GST (as well as other indirect taxes) once the Indirect Tax Laws Amendment (Assessment) Bill 2012 receives Royal Assent. Clarification has been sought on this issue from the ATO.
- Decision Impact Statements and Public Rulings - the Sub-Committee sought clarification from the ATO in relation to whether guidance in a Decision Impact Statement takes precedence over guidance contained in a public ruling where there are conflicting statements in relation to the same issue contained in the two types of guidance. The ATO advised that Decision Impact Statements generally indicate where it is expected a public ruling will need to be updated to reflect a change in the ATO view as a result of a case arising on a matter and the Decision Impact Statement will take precedence.
- 4 year rule and Commonwealth Government Departments (section 105-50, Schedule 1 Taxation Administration Act 1953 (Cth)) – The Tax Institute requested the ATO clarify whether it was intended that the 4 year limitation period that applies to the recovery of any unpaid indirect tax amount apply to amounts of unpaid "notional tax" for which a Commonwealth Government Department is responsible. The ATO stated the general proposition that Government Departments should be treated as any other taxpayer would be under the taxation laws (noting a specific exemption in relation to penalties). The ATO confirmed that section 105-50 would also apply to Commonwealth Government Departments. This opened up a more broad discussion as to what other parts of the TAA would apply to Commonwealth Government Departments.
- Post-Multiflex Refund Audits - The Tax Institute raised an issue regarding the use of audits following the issue of a GST refund in the interim period subsequent to the decision in Multiflex and prior to the Tax and Superannuation Laws Amendment (2012 Measures No. 1) Bill 2012 receiving Royal Assent (which has not yet occurred). An increase in post-issue audits had been noted and there was concern that engaging in an informal refund integrity check process prior to issuing a refund was not being utilised by the ATO. The ATO indicated that there had not been much change in the use of post-issue audits, however as more refunds were being released more quickly, this required an increase in the number of reviews being undertaken post-issue.
- Cancellation of GST registrations - the ATO advised that they have increased the number of GST registration cancellations on the basis of reviews being undertaken (through an "outbound telephone campaign") where certain registrants have been determined not to be "carrying on an enterprise". Also, as the ATO has been releasing more GST refunds in the interim period since the handing down of the Multiflex decision, the ATO advised that they have expanded and strengthened their GST registration checking program to ensure taxpayers either seeking to enter the GST system or making changes to their GST registration properly satisfy the registration requirements.
- Reliance on the Australian Business Register - the ATO advised the NTLG GST Sub-Committee that, though there can be delays in ensuring the ABR is both accurate and current, the ATO broadly accepts that taxpayers can rely on the Australian Business Register (ABR) in relation to a person's GST registration.
- Audit and review issues - the ATO confirmed that there are avenues available to taxpayers to escalate technical issues for clarification that arise during an audit or review other than to the auditor or reviewer for all types of taxpayers.
- GST-free going concerns - the ATO is still to issue an ATO ID in relation to the GST-free going concern concession, specifically in relation to 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.
Members who seek further information in relation to the above are encouraged to contact us at TaxPolicy.