GST supplies by representatives who are creditors

In the 2011-12 Federal Budget, the government announced that it would amend A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to clarify its application, for a mortgagee or chargee, when supplying property owned by a corporation.

The amendments ensure that Division 105 operates to the exclusion of Division 58 in circumstances where a representative of an incapacitated entity is a creditor of the incapacitated entity, and the representative makes a supply in satisfaction of a debt that the incapacitated entity owes to the representative.

This provides certainty and reduces compliance costs by allowing representatives, in possession or control of property of corporations, to continue to report and account for their GST obligations under a single registration.

The measure received royal assent on 28 September 2012 and the specific amendments took effect from the start of the first quarterly tax period after royal assent, that is, 1 October 2012.

Legislation and supporting material

Tax Laws Amendment (2012 Measures No. 4) Act 2012 received royal assent on 28 September 2012.

More information Refer to: Federal Budget Paper No 2 - Revenue Measures. Exposure draft legislation and Explanatory Memorandum were released for comment on 14 February 2012.