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ATO Interpretative Decision

ATO ID 2002/798

Goods and Services Tax

GST and request to change from GST instalment option during the financial year
FOI status: may be released

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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Can the entity, a business operator, change its election to pay goods and services tax (GST) by instalments to another prescribed method of payment during the same financial year in which it made the election to pay GST by instalments, under Division 162 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision

No, the entity cannot change its election to pay GST by instalments to another prescribed method of payment during the same financial year in which it made the election to pay GST by instalments, under Division 162 of the GST Act.

Facts

The entity is a business operator. The entity is registered for GST.

The entity makes an election to pay GST by instalments under section 162-15 of the GST Act. In accordance with subsection 162-25(1) of the GST Act, it makes the election on or before 28 October in the financial year to which the election relates.

History:
Paragraph amended on 3 June 2003 to insert the words 'of the GST Act' after 'subsection 162-25(1)'.

Reasons for Decision

Under Division 162 of the GST Act, an entity may elect to pay GST by instalments.

Subsection 162-30(1) of the GST Act provides that an entity's election to pay GST by instalments has effect for the whole of the financial year in which the election is made.

As required by subsection 162-25(1) of the GST Act, the entity makes an election to pay GST by instalments under section 162-15 of the GST Act. As such, in accordance with subsection 162-30(1) of the GST Act, the entity's election to pay GST by instalments has effect for the whole of the financial year in which the election is made.

Therefore, the entity cannot, under Division 162 of the GST Act, change its election to pay GST by instalments to another prescribed method of payment, during the same financial year in which it made the election to pay GST by instalments.

[Note 1: Subsection 162-30(3) of the GST Act specifies that the election does not cease to have effect if, after making an election, an entity's turnover exceeds the turnover threshold.
Note 2: Under subsection 162-30(2) of the GST Act, if the election is made after 28 October in that financial year (pursuant to subsection 162-25(2) of the GST Act), and the entity has already lodged a GST return for one or more tax periods covering that financial year, the election has effect only for that part of the financial year that is not covered by those tax periods.]

Date of decision:  5 March 2002

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   Division 162
   section 162-15
   subsection 162-25(1)
   subsection 162-25(2)
   subsection 162-30(1)
   subsection 162-30(2)
   subsection 162-30(3)

Keywords
Goods and services tax
GST returns, payments & refunds
GST payments
GST returns

Business Line:  GST

Date of publication:  22 August 2002

ISSN: 1445-2782

history
  Date: Version:
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  16 September 2005 Archived

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