ATO Interpretative Decision

ATO ID 2001/787 (Withdrawn)

Goods and Services Tax

• Withdrawn. Information on this issue can be found in Fact Sheet - Reporting and/or paying GST quarterly (NAT 4149-11.2005)
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Can the entity, a supplier of goods and services, elect to pay goods and services tax (GST) by instalments under Division 162 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), and therefore, lodge a GST return (Business Activity Statement (BAS)) annually?

Decision

No, the entity cannot elect to pay GST by instalments under Division 162 of the GST Act and therefore cannot lodge a BAS annually.

Facts

The entity is a supplier of goods and services.

The entity does not exceed the instalment turnover threshold.

The entity's current tax period is not affected by an election or determination of one month tax periods (sections 27-10 and 27-15 of the GST Act); or a special determination of tax periods (section 27-37 of the GST Act).

The entity's current lodgment record is at least 4 months. The entity has complied with all its obligations to give BASs to the Commissioner.

The entity is registered for GST. The entity has lodged a BAS for the last three quarterly tax periods. The entity received a refund of GST for each of these returns.

Reasons for Decision

Under Division 162 of GST Act, an entity can elect to pay GST by instalments. The amount payable in each instalment is based on an estimate of the GST liability, made by the entity or the Commissioner. If an entity is eligible to elect to pay GST by instalments, it lodges an annual BAS.

According to subsection 162-5(1) of the GST Act, an entity is eligible to pay GST by instalments if:

(a)

it does not exceed the instalment turnover threshold; and

(b)

the current tax period applying to it is not affected by;

(i)

an election of one month tax periods (section 27-10 of the GST Act);

(ii)

a determination of one month tax periods (section 27-15 of the GST Act);

(iii)

a special determination of tax periods (section 27-37 of the GST Act); and

(c)

its current GST lodgment record is at least 4 months;

(d)

it has complied with all its obligations to give BASs to the Commissioner; and

(e)

it is not in a net refund position.

As the entity meets the requirements in paragraphs (a) to (d), it is necessary to determine whether the entity is in a net refund position.

Under subsection 162-5(3) of the GST Act, an entity will be in a net refund position where the sum of the net amounts for a specified period is less than zero.

In this case, the entity has lodged a BAS for the last three quarterly tax periods in which it received a refund of GST for each of these returns. Therefore, the entity is in a net refund position.

As the entity is in a net refund position, it cannot elect to pay GST by instalments under Division 162 of the GST Act. Therefore, the entity cannot lodge a BAS annually.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 27-10
   section 27-15
   section 27-37
   Division 162
   subsection 162-5(1)
   subsection 162-5(3)

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

Business Line:  Goods and services tax

Date of publication:  21 December 2001

ISSN: 1445-2782