• GST Primary production issues register - business activity statement (BAS)

    1. Lodgment

    2. Transactions

    3. Government grants and payments

    Issue number

    Issue

    Updated

    1

    Lodgment

    1.1

    Extension

    1.1.1

    Issue withdrawn

    09/04/01

    1.2

    Returns

    1.2.1

    Can an entity lodge their GST return (which is part of the business activity statement) every seven days?

    04/07/00

    2

    Transactions

    2.1

    Adjustments

    2.1.1

    Can adjustments be netted off on the BAS?

    09/04/01

    2.2

    Acquisitions

    2.2.1

    Does superannuation get included at item G11 'Other acquisitions' of the BAS? Alternatively, is it required to be included at G11 and then effectively removed by including it at G14 'Acquisitions with no GST in the price'?

    09/04/01

    2.3

    Superannuation

    2.4

    Stamp duty

    2.4.1

    Should stamp duty paid in relation to insurance premiums be excluded from the amount to be shown at label G11 on the business activity statement (BAS)?

    09/04/01

    2.5

    Agents

    2.5.1

    Where Subdivision 153-B is operating, what is the effect on instalment income of both parties for pay as you go (PAYG) and BAS purposes?

     

    3

    Government grants and payments

    3.1

    Dairy

    3.1.1

    Are the intermediate entities required to show the Dairy Adjustment Levy (DAL) collected at G1 and G11 on their business activity statement (BAS)?

    18/12/00

    3.1.2

    Is the levy amount considered to be ordinary income of the intermediaries and does it need to be included at T1 on their BAS?

    18/12/00

    3.1.3

    Should payments made to sugar cane farmers under the Interest Rate Subsidy scheme, which is part of the Sugar Industry Assistance Package, be included at G1 on the farmer's business activity statement (BAS)?

    06/03/02

    1 Lodgment

    1.1 Extension

    1.1.1 Issue withdrawn

    1.2 Returns

    1.2.1 Can an entity lodge a BAS every seven days?

    Question

    Can an entity lodge their GST return (which is part of the business activity statement) every seven days?

    Answer

    No.

    Explanation

    An entity is unable to lodge their GST returns more frequently than 12 times per year.

    An entity is required to lodge a GST return for each tax period.

    An entity that has an annual turnover of $20 million or more is required to have monthly tax periods (section 27-15 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act)).

    An entity that has an annual turnover of less than $20 million will have quarterly tax periods (section 27-5) unless they elect to have monthly tax periods (section 27-10 of the GST Act).

    Section 27-37 of the GST Act allows the Commissioner to make a determination in relation to tax periods, however, this provision can result in only 12 complete tax periods each year (paragraph 27-37(1)(c) of the GST Act).

    Therefore, as an entity is required to lodge a GST return for each tax period, and the maximum number of tax periods in a year is 12, an entity can have a maximum of only 12 GST returns in a year.

    2 Transactions

    2.1 Adjustments

    2.1.1 Can adjustments be netted off on the BAS?

    Question

    Can adjustments be netted off on the BAS?

    Answer

    Yes.

    Explanation

    GSTR 2000/1 Goods and Services Tax: adjustment notes, provides at paragraphs 83 and 84 that:

    • When a number of adjustments are included on the one document, a separate amount must be shown for each type of adjustment. For example a monthly statement should show an amount for any refunds during the month as well as a separate amount for the total discounts during the month.
    • If an adjustment note is combined on the next tax invoice or another document, you must issue the adjustment note within 28 days of a request by the recipient or of you becoming aware of the adjustment. The adjustment is an amount that is the difference between the previously attributed GST or input tax credit amount and the corrected attributed GST or input tax credit amount.

    On the business activity statement (BAS), you need to show a net adjustment amount at G7 if the total of all your increasing adjustments is more than the total of all your decreasing adjustments, and leave G18 blank.

    You need to show a net adjustment amount at G18 if the total of all your decreasing adjustments is more than the total of all your increasing adjustments, and leave G7 blank.

    Despite the fact the various adjustments are shown separately on your adjustment notes or monthly statements etc, these adjustments will be netted off on the BAS at either G7 or G18.

    2.2 Acquisitions

    2.2.1 Superannuation entry for BAS

    Question

    Does superannuation get included at item G11 'Other acquisitions' of the BAS? Alternatively, is it required to be included at G11 and then effectively removed by including it at G14 'Acquisitions with no GST in the price'?

    Answer

    As superannuation is not an acquisition, it should not be included at either G11 or G14.

    Explanation

    Superannuation is not considered to be an acquisition for GST purposes.

    Page 50 of the BAS instructions details what acquisitions are to be entered on the BAS at G11.

    Page 55 of the BAS instructions details what is to be entered at G14 on the BAS.

    2.3 Superannuation

    2.4 Stamp duty

    2.4.1 Should insurance premium stamp duty be excluded from the BAS?

    Question

    Should stamp duty paid in relation to insurance premiums be excluded from the amount to be shown at label G11 on the business activity statement (BAS)?

    Answer

    Yes.

    Explanation

    The BAS instructions (which were withdrawn from the website on 24 May 2008) provide the following:

    Insurance premiums

    Credits can be claimed only if GST has been included in the insurance premium you paid or are required to pay to the insurance company. Generally, GST will be charged on insurance policies other than life insurance and health insurance policies. The amount to be included at G11 is the price of the insurance premium less the amount of stamp duty.

    2.5 Agents

    2.5.1 Where Subdivision 153-B is operating, what is the effect on instalment income of both parties for PAYG and BAS purposes?

    Question

    Where Subdivision 153-B of the GST Act is operating, what is the effect on instalment income of both parties for PAYG and BAS purposes?

    Decision

    Subdivision 153B of the GST Act does not alter the treatment for PAYG instalment purposes.

    A Subdivision 153B of the GST Act agreement does not alter the fact that the sale proceeds are derived by the principal, not the agent.

    The full amount of the sale price (excluding any GST component) is included in the instalment income of the principal (unless the sale is of a capital item).

    The principal's agent includes in their instalment income only any commission or fee (excluding any GST component) that they are entitled to. This is because, for income tax purposes, the sale money is not income of the agent; it is income of the principal.

    An agreement under Subdivision 153B does not create a supply between the principal and the agent for PAYG withholding purposes - section 12-190 of the Taxation Administration Act 1953 (TAA). Whilst it would be rare for a principal not to quote an Australian business number (ABN) to the agent under this arrangement, if this happened to be the case the agent should not withhold, given that section 12-190 of the TAA does not recognise that a supply has been made.

    3 Government grants and payments

    3.1 Dairy

    3.1.1 Dairy Adjustment Levy

    Background

    The Dairy Adjustment Levy (DAL) is administered by the Department of Agriculture, Fisheries, Forestry - Australia (AFFA) and is levied on all retail sales of liquid dairy products. The levy rate is 11 cents per litre. This levy is not subject to GST as it is included in the Federal Treasurer's Determination 2000 pursuant to Division 81 of A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) (Treasurer's Determination 2000).

    The retailer is responsible for payment of the levy and they are required to pay it to the wholesaler/distributor at the same time the product is paid for or 90 days after the sale, whichever is the earlier. In turn, the wholesaler/distributor must include the levy collected from the retailer in the price that they pay the processor. The processor then pays the money to the Commonwealth. It is shown as a separate line item on each invoice that passes between the parties. The wholesaler/processor holds the money on trust for AFFA.

    Processors are required to notify AFFA of any late or non-payments, and penalties apply.

    Question

    Are the intermediate entities required to show the DAL collected at G1 and G11 on their BAS?

    Answer

    No.

    Explanation

    These intermediate entities are not considered to make any supplies or acquisitions in relation to the transfer of the levy as they are merely collection agents for AFFA. Therefore no entries are required on these entities' BAS for this levy.

    3.1.2 BAS

    Question

    Is the levy amount considered to be ordinary income of the intermediaries and does it need to be included at T1 on their BAS?

    Answer

    No.

    Explanation

    The collection of the Dairy Adjustment Levy is performed as a collection agent of the Commonwealth (section 97 of the Dairy Industry Adjustment Act 2000 (DIAA)). Similarly, the collection may be undertaken by sub-agents of the Commonwealth (sections 98 and 99 of the DIAA).

    Dairy Adjustment Levy amounts do not represent ordinary income of the collection agent or sub-agent, as these amounts are not derived, they are merely collected on behalf of the Commonwealth. The amounts are not instalment income and not included at label T1 of the activity statement.

    3.1.3 BAS issues

    Question

    Should payments made to sugar cane farmers under the Interest Rate Subsidy scheme, which is part of the Sugar Industry Assistance Package, be included at G1 on the farmer's business activity statement (BAS)?

    Answer

    No. The payments to sugar cane farmers under the Sugar Industry Assistance Package will not be included at G1 on the BAS. The Sugar Industry Assistance Package payment should, however, be included at T1.

    Explanation

    As explained in the BAS instructions at page 34, G1 (total sales and income and other supplies) is used to include all the payments and other consideration (including GST) received during the current tax period for supplies made in the course of business. As the payment of the subsidy is not consideration for a supply, it will not be included on the recipient's BAS at G1.

    As the interest rate subsidy is paid to assist farmers plant cane in their cane farming business, it is considered that the interest rate subsidy is ordinary income and therefore is included in the instalment income of the recipient for the purposes of PAYG. The interest rate subsidy should be included on the recipient's BAS at T1.

    For further information on the Sugar Industry Assistance Package, visit the Centrelink website.

    Alternatively, please contact the Centrelink Sugar Package Call Centre on:

    QLD

    13 28 50

    NSW

    (02) 6626 8013

    WA

    (08) 9168 2851

      Last modified: 29 Jun 2010QC 16511