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11 Jun 14 Sufficiency of notification of entitlement to input tax credits - North Sydney Developments Pty Ltd

The Administrative Appeals Tribunal has confirmed that a notification by a taxpayer to the Commissioner that the taxpayer is entitled to input tax credits can be relatively informal as to content, and does not have to specify the amount or amounts of the claimed credits, in order to be a valid notification, provided it communicates a claim relating to a particular tax period in relation to a particular kind of tax liability.

Section 105-55 of Schedule 1 to the Taxation Administration Act 1953 (TAA) imposes a conditional four-year time limit in relation to input tax credits for any particular tax period. It provides, among other things, that a taxpayer is not entitled to a refund, other payment or credit unless, within four years after the end of the relevant tax period, the taxpayer notifies the Commissioner (in a GST return or otherwise) that it is entitled to the refund, other payment or credit.

In this case, the taxpayer, a property developer which was in receivership, wrote to the Commissioner advising that it had not been able to complete its BASs because it did not have access to its books and records. The letter provided details of the tax periods to which it related, identified the foreshadowed BASs as the subject of its notification, and referred to an expected entitlement to “GST refunds” for those tax periods.

In the view of the Tribunal, the taxpayer’s letter did notify the Commissioner of “the refund, other payment or credit” to which s 105-55(1)(a) applied. That section requires no greater specification than the tax period involved, and the nature of the refund or input tax credit claimed. Secondly, if the letter required some greater degree of specificity in order to permit satisfaction that any subsequent claim was covered by the notification, the letter also satisfied that requirement. It did so because it indicated that the reason for the notification was the lack of access to the books and records in the possession of the receiver. On this view any subsequent claim would be limited to a summarised reproduction of the information in the purchase, payment and supply records maintained by the receivers.

On the other hand, the Commissioner’s notices to the taxpayer, which required lodgement of BASs, and purportedly required payment of any amounts that might be payable as a result of due completion of those statements, could not properly be characterised as notices requiring payment of an unpaid amount within s 105-50(3)(a) of Schedule 1 to the TAA. Consequently the notices did not operate to avoid the four-year time limit that would otherwise apply.

Re North Sydney Developments Pty Ltd and FCT [2014] AATA 363 (P W Taylor SC, SM, 6 June 2014).

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