Guidance and advice

To encourage willing participation in the system, we aim to provide clearer, timelier and relevant advice to the community.

We continue to exceed our commitments to the community in providing ‘timely service’ and ‘for keeping taxpayers informed’ of the progress of their private rulings. In 2014–15, we finalised 927 GST-related private ruling requests, achieving 93% finalised within 28 calendar days of receiving all the necessary information. For the ‘keep me informed’ standard, we achieved 87% of private rulings against the 80% benchmark.

The introduction of the simpler ‘short form’ private ruling process has improved the client experience and provided us with an opportunity to better understand what the client is hoping to achieve. It also facilitates a discussion on the information required from the client, in order for our staff to proceed. The uptake of ‘short form’ rulings is on the increase and the benefits derived from this new process have been well received by the community.

During the year, we provided certainty to clients who sought our view on the application of GST to their circumstances by finalising our view a number of key issues, including appropriations, education, food classification, international transactions and Division 81 fees and charges. As a result, we received 33% fewer private ruling requests this year, with 731 private ruling requests received compared to 1,093 in 2013–14.

Previously a significant proportion of guidance requests related to changes in activity lodgment patterns. However, as clients can now lodge these requests over the phone, we have received fewer requests for guidance this year. A reduction in the number of requests for the Commissioner to exercise discretion, and other general guidance requests, contributed to this decrease. We completed 4,980 requests, a decrease of 24% on last year.

CASE STUDY: Early consultation with industry

Our usual practice is to issue a draft GST determination and provide the community with the opportunity to comment on our technical position. In this instance, the supplier’s GST treatments depended on the intended use of the services by their clients and we did not know if they held sufficient information to enable them practically to comply.

We decided to put an initial ATO view to industry and seek their feedback on the practical application issues. The feedback was extremely informative and included ideas on alternative technical positions and practical compliance issues that may arise. This consultation gave us a better understanding of the industry and demonstrated to us that, in the circumstances, impacted taxpayers simply could not practically apply the initial ATO position.

If we had used the traditional approach, it would have turned into a protracted process. By adopting this new approach and listening to the feedback we received from industry, we changed our view.

The final determination has now been issued and we believe those in the impacted sector will be able to comply with our final position.

End of example

Feature: Contemporary and tailored service

We are committed to providing our clients with new products and services that are tailored to their needs and that drive our own productivity improvements while supporting a culture that is open to change

GST lodgment cycle self-assessment

During the year we introduced a new policy allowing clients to make verbal requests for changes to their GST lodgment cycle times. This change means verbal requests are now accepted as ‘approved forms’ for legislative purposes and the Commissioner’s powers of discretion can be applied.

Prior to this approach, in 2013–14, we received around 26,000 requests for GST lodgment period changes. All requests were subject to basic checks and around 2,000 were then escalated for more a detailed review. We recognised that this approach was at odds with the needs of the current business environment and our new policy enables us to provide a more contemporary and timely service. Specifically, most clients can now change their GST lodgment cycle times to suit their business needs, immediately, and over the phone. By removing the need for unnecessary compliance checks, and the need to respond to clients in writing, we can now focus on higher risk, higher priority work.

Early engagement strategy

As we recognise that people make honest mistakes, during the year we wrote to 12,000 medium to lower risk taxpayers who were due a GST refund, suggesting that they review their records and make a self-revision if any errors are found. Around 7% of all letter recipients made one or more revisions, and from over 1,000 revisions, $4.4 million in GST liabilities was raised. Feedback from letter recipients has been positive, as they found the letter easy to understand and action where required. No penalties are incurred if a correction is made (within required time) and the revision is treated as a voluntary disclosure by the taxpayer.

Short form private rulings

Most people who approach us for a private ruling want the certainty of a straightforward answer to their question. However, historically our private rulings have been long documents, using highly formal and a sometimes-complicated form of legal reasoning. Therefore, in 2014 we introduced the short form private ruling using plain English, which is now our default position for most ruling requests. We now provide a succinct summary of why we reached our decision and only provide the key legislation relevant to that decision.

GST-free car ruling

The GST Act provides that the supply of a car to an eligible disabled person is GST-free if the car at the time of purchase is intended to be used for their personal use. When purchasing the car, they lodge a signed declaration with the dealer stating they intend to use the car for the required period (which is two years or 40,000km). Previously, if the owner wished to purchase a new vehicle GST-free to replace a current vehicle before the two year /40,000kms period has ended, the owners were advised to write to the Commissioner to seek a private ruling as to whether the new vehicle can be purchased GST-free. We have now updated that advice to let people know that they do not need to apply for a private ruling as it is the purchaser’s intention at the time of purchasing the car that determines the GST status of the supply. It does not matter if the car is subsequently traded-in or sold by the purchaser earlier than two years or 40,000km.

By adopting this sensible approach, we have not only made it easier for clients but also reduced the number of private ruling requests lodged based on call centre advice.

    Last modified: 14 Dec 2015QC 47462