• Issue no. 5 – GST groups

    Schedule:

    • The postscript (a) indicates the date the original issue was placed on the register
    • The postscript (u) indicates the date the original issue was updated
    • The postscript (w) indicates the date the issue was withdrawn from the register
    • Withdrawn issues have been placed in the NTLG-GST Issues Register Archive (Issue 5 archive)
    Date Question Further information

    28/02/05(w)

    5.1 Is there an intention to promulgate Regulations to extend the grouping provisions beyond the circumstances currently specified in Division 48?

    These issues have been withdrawn and placed in the archive.

    28/02/05(w)

    5.2 When will the form for GST group registration be available?

    28/02/05(w)

    5.3 Are applications for GST groups required to be lodged before 31 May to be processed before the start of GST?

    28/02/05(w)

    5.4 Will there be a public ruling on GST groups?

    28/02/05(w)

    5.5 Can an employer group with a superannuation fund?

    24/07/01(a)

    09/05/05(w)

    5.6 GST on tax loss transfers

    Can the ATO comment on the press article appearing in the AFR 23/10 which noted the view of Ernst and Young that GST may apply to tax loss transfers between group entities? Does the ATO agree that such a transaction will attract GST?

    28/02/05(w)

    5.7 Update on Individual Grouping Regulations

    28/02/05(w)

    5.8 Audit trail of groups

    01/09/04(a)

    26/06/13 (u)

    5.9 Formation and revocation of GST groups

     

    5.9 Formation and revocation of GST groups

    Attribution of supplies pre and post GST grouping

    Non-interpretative – straight application of the law.

    Issue

    If a company, say, groups from 1 July 2002, does that mean intra-group supplies made prior to 1 July 2002 (ie under the time of supply concept, which is not part of the GST Act, but is inherent in parts of the GST Act) are subject to GST, or only supplies attributed prior to 1 July 2002. The same issue also arises (in reverse) for entities which degroup.

    Does the date of effect of grouping or degrouping affect supplies made after that time or rather, supplies attributed after that time?

    ATO response

    Basically, Division 48 of the GST Act aims to simplify the administration of GST for related entities by treating supplies between members of a group as being out of the GST net and allowing a single entity to account for the amount that is payable to the Commissioner by each entity of a GST group.

    The first is achieved by ss48-40(2) overriding the general provisions of s9-5 and s11-5 resulting in supplies and acquisitions between members of a GST group being treated as if they are out of the scope of the GST legislation. That is, the supplier or recipient considers the application of ss48-40(2) at the time the entity determines if the supply or acquisition is a taxable supply or a creditable acquisition – which is when the supply or acquisition is made.

    The second objective is achieved by assigning to the representative of a GST group the various components of a member's net amount for a tax period. This means that the representative of the GST group is liable to account for GST for all of the taxable supplies and entitled to claim the ITCs for all of the creditable acquisitions that are attributed to a tax period for which they act as the representative of the GST group.

    Where a supply or acquisition is made in a tax period that is different to the tax period in which the supply or acquisition is to some extent attributed, the supply or acquisition does not change its character. The character, determined when the supply or acquisition is made, remains the same regardless of when the supply or acquisition is attributed. Consequently for GST groups, where a supplier and recipient become members of the same GST group after the taxable supply or creditable acquisition is made, the supply or acquisition does not change its character. Rather the liability to GST or entitlement to ITCs becomes the responsibility of the representative of the GST group, if the supply or acquisition is attributed to some extent while the entities are members of the GST group.

      Last modified: 04 Aug 2016QC 16309