Improvements to GST Administration
The Government has also introduced a Bill seeking to improve the administration of GST. The proposed amendments contained in the Bill include:
A discussion of the key amendments follows.
Four-year limitation period
Under the proposed amendments, all entitlements to input tax credits must be claimed within four years from the day on which a taxpayer is required to give the Commissioner a BAS to which a credit would be attributable, subject to three exceptions.
The three exceptions are where:
Agency provisions
The Bill seeks to allow entities that facilitate supplies or acquisitions for an entity through acting as an intermediary (eg billing and paying agents) to use the simplified accounting procedures (SAP).
Overpaid GST refunds
The Bill also seeks to ensure an overpaid GST refund to a taxpayer will be treated as a tax liability from the date of overpayment.
In addition, a taxpayer who receives an overpaid GST refund will be liable for interest charge from the date they receive the overpayment.
Supplies to associates
The Bill will ensure that a supply to (or from an associate) may constitute an input-taxed supply, a GST-free supply or a financial supply even where the supply is without consideration.
* The term ‘associate’ is defined broadly and depends on whether the taxpayer is a natural person, company, trust or partnership.
The Government has also introduced a Bill seeking to improve the administration of GST. The proposed amendments contained in the Bill include:
- providing a four-year period for claiming input tax credits and fuel tax credits;
- introducing a scheme whereby residents of Australia’s external territories will be able to claim refunds of GST;
- allowing entities who facilitate supplies or acquisitions for another entity to utilise the simplified accounting procedures;
- treating an overpaid GST refund to a taxpayer as a tax liability; and
- clarifying the GST treatment of a supply without consideration to an associate.
A discussion of the key amendments follows.
Four-year limitation period
Under the proposed amendments, all entitlements to input tax credits must be claimed within four years from the day on which a taxpayer is required to give the Commissioner a BAS to which a credit would be attributable, subject to three exceptions.
The three exceptions are where:
- the Commissioner provides a notice within the four-year period to a taxpayer requiring payment of an amount;
- the credits are linked to liabilities avoided as a result of fraud or evasion; and
- the taxpayer notifies the Commissioner of their entitlement.
Agency provisions
The Bill seeks to allow entities that facilitate supplies or acquisitions for an entity through acting as an intermediary (eg billing and paying agents) to use the simplified accounting procedures (SAP).
Overpaid GST refunds
The Bill also seeks to ensure an overpaid GST refund to a taxpayer will be treated as a tax liability from the date of overpayment.
In addition, a taxpayer who receives an overpaid GST refund will be liable for interest charge from the date they receive the overpayment.
Supplies to associates
The Bill will ensure that a supply to (or from an associate) may constitute an input-taxed supply, a GST-free supply or a financial supply even where the supply is without consideration.
* The term ‘associate’ is defined broadly and depends on whether the taxpayer is a natural person, company, trust or partnership.
