The Tax Laws Amendment (2014 Measures No. 1) Act 2014 received royal assent on 30 May 2014.
The Act states that an overpayment of goods and services tax (GST) is only refundable in certain circumstances. It applies to tax periods commencing on or after 31 May 2014.
An overpayment of GST can arise as a result of mischaracterising a sale or arrangement as taxable, miscalculating the GST payable or for any other reason.
What does this mean for you?
You are entitled to a refund of overpaid GST included on your activity statement if it was not passed on to your customer by including it in the sale price.
Where you have included the overpaid GST in the sale price, it is not refundable to you until you reimburse your customer a corresponding amount.
A tax invoice is evidence that overpaid GST has been included in the sale price. Even if no tax invoice was issued, an amount of GST may still have been included in the sale price.
Where you have included overpaid GST in the sale price and do not reimburse your customer, the Commissioner of Taxation has discretion to refund if refunding the overpaid GST would not result in a windfall gain. For further information, refer to Refund of excess GST – approved form
If the Commissioner does not exercise the discretion to refund, you have the right to object against that decision.