ATO Interpretative Decision
ATO ID 2003/1063
Goods and Services Tax
GST and a representative's choice to register in its capacity as a representative of an incapacitated entityFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 representative of an incapacitated entity that carries on some or all of the incapacitated entity's enterprise, register for goods and services tax (GST) under section 23-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in its capacity as the representative of the incapacitated entity, when the incapacitated entity is neither registered nor required to be registered?
Decision
No, the entity is not able to register for GST under section 23-10 of the GST Act in its capacity as the representative of the incapacitated entity, when the incapacitated entity is neither registered nor required to be registered.
Facts
The entity is a representative of an incapacitated entity. The incapacitated entity is not registered and is not required to be registered for GST. The entity, the representative, carries on part of the incapacitated entity's enterprise. The incapacitated entity still carries on part of its enterprise as it is carrying on activities in the course of terminating its enterprise.
Reasons for Decision
Section 23-10 of the GST Act provides that an entity may choose to register for GST if it is carrying on an enterprise or intends to carry on an enterprise. In this case, the entity is carrying on a part of the incapacitated entity's enterprise.
While the entity may choose to register under section 23-10 of the GST Act, subsection 147-10(1) of the GST Act provides that the registration of a representative of an incapacitated entity must be cancelled if the Commissioner is satisfied that the representative is not registered or required to be registered in that capacity.
Whether the entity is required to be registered, in its capacity as representative of the incapacitated entity, is determined by the provisions of subsection 147-5(1) of the GST Act. Subsection 147-5(1) of the GST Act provides that a representative of an incapacitated entity is required to be registered for GST, in that capacity, if the incapacitated entity is itself, registered or required to be registered.
As the incapacitated entity is neither registered nor required to be registered for GST, the entity is not required to be registered under subsection 147-5(1) of the GST Act.
Where the entity chooses, in its capacity as a representative of the incapacitated entity, to register under section 23-10 of the GST Act, then the registration must be cancelled in accordance with the provisions of subsection 147-10(1) of the GST Act. This is because the incapacitated entity is neither registered nor required to be registered.
Therefore, the entity is not able to register under section 23-10 of the GST Act when the incapacitated entity is not registered or required to be registered.
Note 1: Despite the fact that the representative is unable to choose to register in this situation, the incapacitated entity or its authorised agent can instead apply to register for GST. The same end will be achieved as when the incapacitated entity is registered, the Tax Office will register the representative under Division 147 of the GST Act.
Note 2: An incapacitated entity can choose to register for GST if it is doing things in the course of terminating its enterprise, as 'carrying on an enterprise' includes doing anything in the course of terminating an enterprise (section 195-1 of the GST Act). If the incapacitated entity chooses to register for GST, it will be liable for GST on taxable supplies, and entitled to input tax credits for creditable acquisitions that it makes while it is registered.
Date of decision: 26 August 2003
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 23-5
section 23-10
Division 147
subsection 147-5(1)
subsection 147-10(1)
section 195-1
Keywords
Goods and services tax
GST registration
Registration cancellation
Required to be registered
GST special rules
Representative of incapacitated entities
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 26 August 2003 | Original statement |
| 16 November 2012 | Archived |