ATO Interpretative Decision
ATO ID 2013/40 (Withdrawn)
Goods and Services TaxGST refund and offset of fee against reimbursed amount
This ATO ID is withdrawn. The view in this ATO ID is now contained in paragraphs 31B to 31C with further explanation at paragraphs 138A to 138F of Miscellaneous Taxation Ruling MT 2010/1 Miscellaneous tax: restrictions on GST refunds under section 105-65 of Schedule 1 to the Taxation Administration Act 1953.This document has changed over time. View its history.
Status of this decision: Decision withdrawn 22 September 2017.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Will the Commissioner be satisfied that an entity has fully reimbursed an amount which corresponds to the overpaid GST, pursuant to subparagraph 105-65(1)(c)(i) of Schedule 1 to the Taxation Administration Act 1953 (TAA), when an administration fee is to be 'offset' against the amount which corresponds to the overpaid GST?
Where an amount which corresponds to the overpaid GST is to be offset by an administration fee, the Commissioner is only satisfied that the recipients have been reimbursed to the extent of the amount which corresponds to the overpaid GST less the administration fee.
The entity is a supplier of household products and registered for goods and services tax (GST).
The entity has treated supplies of these products to its customers as taxable supplies.
The Commissioner has given a private ruling that certain products the entity supplied were GST-free under section 38-45 of the A New Tax System (Goods and Services Tax) Act 1999.
The customers are not registered or required to be registered for GST.
The entity intends to reimburse customers an amount equal to the total amount of overpaid GST, but only where the customer agrees to pay an administration fee.
The entity will provide the customer with a number of options for paying the administration fee, including by credit card payment or direct deposit prior to receiving the reimbursement, or by an offset against the overpaid GST.
It then intends to lodge an amended business activity statement for the relevant period, claiming back the total amount of overpaid GST.
Reasons for Decision
Under section 105-65 of the TAA, the Commissioner need not give an entity a refund of overpaid GST where a supply was treated as a taxable supply but is not a taxable supply, and the Commissioner is not satisfied that the entity has reimbursed an amount which corresponds to the overpaid GST to the recipient of the supply. The restriction also applies if the recipient is registered or required to be registered.
Once reimbursement corresponding to the overpaid GST to the customer occurs, section 105-65 of the TAA no longer applies to restrict the refund.
The entity's arrangement gives customers a choice between receiving a reimbursement of the amount they overpaid less the administration fee (net reimbursement), or receiving no reimbursement. It does not give customers the choice to receive the full amount of the reimbursement without paying the administration fee.
As the entity will only reimburse the customer when it receives the administration fee, (either by direct payment or by offset against the amount which corresponds to the overpaid GST), the entity will not reimburse an amount equal to the overpaid GST to the customer. For the purposes of subparagraph 105-65(1)(c)(i) of the TAA, the amount reimbursed will be the full amount of overpaid GST less the administration fee. This net reimbursed amount will not be restricted by section 105-65 of the TAA.
The Commissioner need not give a refund of the overpaid GST under section 105-65 of the TAA, to the extent of the corresponding amount of the administration fee as the Commissioner is not satisfied this amount has been reimbursed.Date of decision: 12 February 2013
A New Tax System (Goods and Services Tax) Act 1999
Schedule 1 section 105-65
Related Public Rulings (including Determinations)
Goods and services tax
GST returns, payments and refunds