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  • Issue 15 BAS

    15.1 In the case of larger corporates, there may be hundreds of adjustments being made in a tax period. It was suggested that this had been raised by a number of large corporates (in relation to the BAS requirements and whether G1 and G7 had to be completed or only a net figure at G1)

    Adjustments can arise for many reasons including changes in use of acquisitions, bad debts, or changes in consideration (or refunds) in respect of supplies or acquisitions, taking goods from your business for your own use and, becoming or ceasing to be registered. (see page 71 of the BAS Instructions for other circumstances in which adjustments may be needed)

    When filling in your BAS (including accounting for adjustments), you can use either the calculation method or the accounts method. You may use whichever method best fits your business and record keeping practices.

    If you use the calculation method, almost all adjustments are accounted for at G7 or G18 by recording them on the worksheet as either increasing or decreasing adjustments. The only exceptions to this are adjustments arising from discounts, refunds, rebates or other changes to consideration for supplies or acquisitions. For these amounts, you can choose to either:
    net off the relevant amount from your supplies (at G1) or from your acquisitions (at G10 or G11); or
    record them as adjustments at G7 or G18 (by recording them on your worksheet - see page 73 of the BAS Instructions).

    You can net off the discount (etc) whether it relates to a supply (or acquisition) accounted for on the current activity statement, or to a previous activity statement. However, netting off an amount at G1 in respect of a supply that was accounted for on an earlier BAS, instead of recording the amount as an adjustment at G7, does not mean that the amount is not an "adjustment". Likewise for amounts netted off at G10 or G11 in respect of acquisitions. Thus, you must still meet any "adjustment note" requirements you may have in respect of the amount.

    Information on how to net off these amounts, instead of accounting for them as adjustments, can be found at pages 36-37 (for supplies) and page 46 (for acquisitions) of the BAS Instructions.

    For those adjustments recorded on the worksheet, the difference between the total of the decreasing and the increasing adjustments is then shown at either G7 or G18.

    If you use the accounts method, you fill in the GST payable box (1A) and the input tax credits box (1B) with amounts that you have derived from the relevant accounts that you use in your business. You will not need to record any adjustments at G7 or G18 if you use this method. However, you will need to complete G1, G2, G3, G10 and G11. Further information on using the accounts method can be found under "Options for completing the GST section of your activity statement" (See pages 30 - 31 of the BAS Instructions) and in "BAS Basics".

    15.2 Business Activity Statements

    Should a person who elects to lodge a monthly Business Activity Statement for GST purposes and having a turnover under $20M, need to lodge a separate quarterly Business Activity Statement for withholding tax purposes etc or so it appears. Can the Tax Officeplease confirm that this is the proposal - two monthly returns followed by a quarterly return?

    For businesses reporting monthly (whether turnover > $20m or < $20m), they will complete the monthly BAS for the first two months of the quarter and the quarterly BAS for the third month of the quarter. The Tax Office will send the appropriate form to the business each tax period. Withholding appears on both monthly and quarterly BASs.

    The quarterly BAS is the same as the monthly but with the addition of PAYG Income Tax and FBT instalments.

    Each business needs to meet the requirements of withholding relevant to their circumstance.

    Where total annual withholding is greater than $25,000 and less than or equal to $1m then withholding obligations must be met monthly on the BAS.

    Where total annual withholding is less than or equal to $25,000 then withholding obligations must be met quarterly on the BAS.

    (Where total annual withholding is greater than $1m then the BAS will not be used to report and pay the withholding obligation, W2. However, W1 and W3 would still be expected).

    15.3 Where do fees charged appear on the BAS when these are GST-free under Division 81?

    That is, it appears they are not supplies under Division 81, and should therefore go in either G4 on the supply side or G13 or G14 on the input side.

    An entity includes all the payments and other consideration that it has received for supplies that it has made during a tax period at field G1 of the BAS. However, some payments are not consideration for a supply and are excluded from GST altogether

    Payments of Australian taxes, fees and charges covered by a Division 81 determination are not consideration and therefore should not be shown at field G1.

    Consistent with this approach is the absence of the need for the payer of the tax , fee or charge to report the payment made at G11 and subsequently at G14.

    15.4 If the due date for the lodgment of the BAS falls on a weekend, a public holiday or a bank holiday, what is the last day that the lodgment and payment can be made to avoid incurring late lodgment and late payment penalties?

    If the ATO answer is the last working day before the required date, how does the legislation override section 36A(2) of the Acts Interpretation Act?

    Are the rules different if the BAS is posted?

    Notification of a liability under a BAS provision must be made in an approved form and must be made on or before the day the amount is due and payable. These rules are set out in section 31-10 of the GST Act, sections 16-150 and 45-20 of the Taxation Administration Act 1953 ('TAA') (PAYG withholding and PAYG instalments) and section 104 of the Fringe Benefits Tax Assessment Act 1986 (FBT instalments). The BAS (which is the approved form) is required to be given to the Commissioner by the due date.

    The Commissioner can defer the time for payment of the liability, but a deferral is only effective if given to the taxpayer by written notice. A deferral of the due date for payment does not defer the time for notification of the liability (section 255-10 of the TAA). The Commissioner can also defer the time for giving an approved form (lodgment of a BAS). A deferral of the time for lodgment does not defer the due date for payment (section 388-55 of the TAA).

    Where the day on which payment or lodgment is due falls on a weekend or public holiday, that day remains the day by which the obligation must be satisfied. Subsection 36(2) of the Acts Interpretation Act 1901 ('AIA') operates where an Act allows a period of time within which something may be done, but does not apply in this case because the lodgment and payment is required before a specified point in time rather than during a specified period.

    Similarly, where payment or notification is made by post, the payment or notification must be received by the Commissioner on or before the day on which the amount is due and payable. Section 29 of the AIA 1901 does not apply to allow the obligation to be effected at the time when the letter would be delivered in the ordinary course of the post. That provision only applies where an Act requires a document to be 'served', 'sent' or 'given' 'by post'.

    However, the Commissioner commented in media release 2001/10 that with a deadline which falls on a Sunday, the ATO would take a common sense approach to any BAS forms which arrive in the ATO's mail on a Monday.

    15.5 Substituted accounting periods (SAP) & BAS

    In cases where businesses with a substituted accounting period (SAP) are reporting GST on a quarterly basis when they should automatically be reporting on monthly, ATO is asked to advise how this issue is to be communicated and to confirm an exception to this requirement for charities with a SAP.

    The following information is available in Practical Tips for Tax Practitioners on the ATOassist site.

    GST tax periods for businesses with substituted accounting periods
    If your clients have approval to adopt a substituted accounting period for income tax purposes (that is, your balance date is other than 30 June) they are required to report their GST payable and input tax credits on a monthly basis. If your clients have a substituted accounting period and they are registered for GST on a quarterly basis they should contact the ATO on 13 24 78, or you can contact the tax agents information line on 137286.

    Those businesses with a substituted accounting period (SAP) that were inadvertently registered as reporting their GST on a quarterly basis have been manually corrected to monthly reporting cycles. The ATO has written to all affected businesses advising them of the change to their reporting period.

    Businesses with a SAP that are exempt from income tax (for example, charities) were not included in this exercise and will remain as quarterly GST reporters unless they have chosen to report monthly.

    15.6 Lodgment due date falling on weekend or public holiday

    Why BAS payments cannot be processed on a weekend or public holiday?

    The ATO has advised on a number of occasions that BAS lodgments may be made electronically on a weekend or public holiday but payments must be made by close of business on the day before a weekend or public holiday. The TPIP sought clarification regarding why electronic payments for BAS obligations could not be made on a weekend or public holiday.

    Neither the RBA nor the ATO are preventing the clearance of electronic payments over the weekend. The answer is that the banks collectively have to date declined to process over weekends. It is understood that this time is used for maintenance of systems etc.

    The Australian Payments Clearing Association (APCA) manages the systems under which all Australian payments are cleared. Electronic (direct entry) payments are made according to the rules of the Bulk Electronic Clearing System (BECS). APCA is a limited liability company with a board of directors drawn from shareholders in the payments industry. Shareholders are the Reserve Bank, banks and the industry bodies of building societies and credit unions

    At the end of each day, BECS members reconcile their inward and outward file exchanges and report bilateral and multilateral positions to the Reserve Bank Collator in Sydney by 11pm. These are settled on a multilateral net basis at 9:00am on the following business day. At that same time (9:00am) cheques, EFTPOS, ATM transactions and others are also settled.

    To allow electronic payments on a weekend or public holiday would require financial institutions to either settle their respective positions every day including Saturday and Sunday or else treat electronic payments separately to the rest. The question of weekend settlement was raised at a recent BECS workshop sponsored by APCA. The feasibility of extending operating hours is one of a number of initiatives that is to be explored by a working group being set by the BECS Management Committee.

    Currently, it is proposed under Taxation Laws Amendment Bill (No 3) 2001 that where the BAS lodgment or payment is due and payable on a weekend or public holiday, the lodgment or the payment may be made on the first business day after the weekend or public holiday.

    15.7 SAM and GST instalment option

    Can food retailers who use the simplified accounting methods for accounting for their GST, use the GST instalment option?

    Contributed by TPA

    ATO response

    Yes. The fact that the food retailers use simplified accounting method will not impact on their eligibility for Option 3.

    If food retailers meet the eligibility requirements, they can pay GST by instalments and lodge annual GST returns. The eligibility requirements are in the fact sheet Quarterly GST Options (NAT 4149).

    This information was placed on the tax reform website on 29 June 2001 under 'Instructions for Completing the GST Section of the Business Activity Statement (BAS) for Food Retailers Using a Simplified GST Accounting Method'.

    Attention

    The fact sheet Instructions for completing the GST section of the business activity statement (BAS) for food retailers using a simplified GST accounting method (NAT 4369) was withdrawn on 7 January 2008 and is replaced by:

    End of attention

    15.8 BAS: List of gazetted public holidays

    Members requested a list of gazetted public holidays that ATO recognised as official public holidays for situations where the lodgment and payment due dates fall on a weekend or a public holiday, businesses could make payments on the next business day without incurring a penalty.

    ATO response

    Public Holidays 2001

    The following days are public holidays for the purposes of section 8AAZMB of the Taxation Administration Act 1953. All tax debts payable and notifications due on these days will be extended to the next business day for all taxpayers regardless of where the taxpayer is located. For example, 21/5/01 is Adelaide Cup Day in South Australia. All tax debts and notifications that were otherwise due on 21/5/01 are due on the next business day, that is, Tuesday 22/5/01. These dates have effect from 1 April 2001.

    DATE

    DESCRIPTION

    13.04.2001

    Good Friday

    16.04.2001 (Monday)

    Easter Monday

    25.04.2001

    Anzac Day

    07.05.2001 (Monday)

    May Day (NT), Labour Day (QLD)

    21.05.2001 (Monday)

    Adelaide Cup Day

    04.06.2001 (Monday)

    Foundation Day (WA)

    11.06.2001 (Monday)

    Queens' Birthday

    06.08.2001 (Monday)

    Picnic Day (NT)

    01.10.2001 (Monday)

    Labour Day (ACT, NSW, SA)

    25.12.2001

    Christmas Day

    26.12.2001

    Boxing Day

    Note: Large withholders with amounts due on Monday will be able to extend to the next business day 7 times during 2001.

    15.9 Failure to lodge on time penalty on BAS

    How is failure to lodge on time (FTL) penalty (previously known as late lodgment penalties (LLP)) imposed on a BAS? Is the FTL penalty imposed on a total BAS basis or a per category basis? For example, if there is a GST net refund but a PAYG Withholding payment and FBT payment, is FTL penalty worked out on the balance or applied individually to both the PAYG withholding payment and FBT payment?

    ATO response

    LLP no longer exist and is replaced by failure to lodge on time penalty. The penalty applies whenever a taxpayer who is required to lodge an approved form by the due date fails to do so. The law requires taxpayers to notify the Commissioner of liabilities in approved form by the due date for payment. The penalty is automatically imposed by the law if notification is not made by the due date. With liabilities for BAS amounts (GST, PAYG(I), PAYG(W), FBTI and deferred COIN) the approved form is the BAS. If a BAS is lodged late the FTL penalty applies to each amount that is required to be notified. That means, a taxpayer could have up to 5 FTL penalties imposed for the late lodgment of the BAS. However, it is our policy to remit penalties so that, if a penalty is to be maintained only one penalty will be payable.

    The law also imposes a penalty where a taxpayer makes a false or misleading statement that causes a shortfall amount. A shortfall amount is either an amount of understated tax or over-claimed credit. The penalty applies to each tax liability notified in a BAS. If the net amount of GST is a refund that is either correct or less than the proper entitlement, it will not have any bearing on a shortfall amount in relation to a PAYG(I), PAYG(W) or FBTI amount. The only amounts netted-off are GST payable and input tax credit entitlements because the GST related tax liability upon which a penalty is based is the net amount for the tax period.

    15.10 Pre-printed date on BAS

    Contributed by CPAA

    CPAA queried the reasons for not reflecting the actual due date on the Activity Statement if the pre-printed date falls on a public holiday.

    ATO response

    ATO is looking to implement system changes to allow Activity Statements to reflect the actual due dates for lodgment and payment where the 21st/28th of a month falls on a weekend or public holiday. When implemented, the change is likely to occur from mid 2002 (calendar year).

    15.11 List of public holidays for the calendar year 2002

    Contributed by TPA

    TPA requested a list of public holidays for the calendar year 2002 that ATO recognised.

    ATO position

    1 January

    New Year's Day

    28 January

    Australia Day

    4 March

    Labour Day (WA)

    11 March

    Eight Hours Day (TAS); Labour Day (VIC)

    18 March

    Canberra Day (ACT)

    29 March

    Good Friday

    1 April

    Easter Monday

    25 April

    Anzac Day

    6 May

    May Day (NT); Labour Day (QLD)

    20 May

    Adelaide Cup Day (SA)

    3 June

    Foundation Day (WA)

    10 June

    Queen's Birthday (Excl. WA)

    5 August

    Picnic Day (NT)

    30 September

    Queen's Birthday (WA)

    7 October

    Labour Day (ACT, NSW, SA)

    25 December

    Christmas Day

    26 December

    Boxing Day; Proclamation Day (SA)

    15.12 List of public holidays for the calendar year 1/1/2003 to 1/1/2004

    01 January

    2003

    New Year's Day

    27 January

    Australia Day

    3 March

    Labour Day (WA)

    10 March

    Eight Hours Day (TAS); Labour Day (VIC)

    17 March

    Canberra Day (ACT)

    18 April

    Good Friday

    21 April

    Easter Monday

    25 April

    Anzac Day

    5 May

    May Day (NT); Labour Day (QLD)

    19 May

    Adelaide Cup Day (SA)

    02 June

    Foundation Day (WA)

    09 June

    Queen's Birthday (Excl. WA)

    04 August

    Picnic Day (NT)

    29 September

    Queen's Birthday (WA)

    06 October

    Labour Day (ACT, NSW, SA)

    25 December

    Christmas Day

    26 December

    Boxing Day; Proclamation Day (SA)

    01 January

    2004

    New Year's Day (2004)

      Last modified: 22 May 2014QC 28063