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ATO Interpretative Decision

ATO ID 2002/538 (Withdrawn)

Goods and Services Tax

GST and entitlement to input tax credits where GST registration has been backdated
FOI status: may be released
  • This ATO ID is a straight application of the law and does not contain an interpretative decision.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Is the entity, a business operator, entitled to an input tax credit under section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), for an acquisition that it made before applying for goods and services tax (GST) registration, when its GST registration is backdated to a date before the acquisition?

Decision

Yes, the entity is entitled to an input tax credit under section 11-20 of the GST Act for an acquisition that it made before applying for GST registration, when its GST registration is backdated to a date before the acquisition.

Facts

The entity is a business operator. The entity made an acquisition. After making this acquisition, the entity applied for GST registration. The Commissioner registered the entity and backdated the entity's registration to a date before the entity made the acquisition.

The acquisition was for a creditable purpose, the supply to the entity was a taxable supply under section 9-5 of the GST Act and the entity provided consideration for the supply.

Reasons for Decision

Section 11-20 of the GST Act provides that an entity is entitled to an input tax credit for any creditable acquisition that it makes. Under section 11-5 of the GST Act, an entity makes a creditable acquisition if:

•
it acquires anything solely or partly for a creditable purpose;
•
the supply of the thing to it is a taxable supply;
•
it provides, or is liable to provide, consideration for the supply, and
•
it is registered or required to be registered for GST.

The entity's acquisition was for a creditable purpose, the supply to the entity was a taxable supply and the entity provided consideration for the supply.

However, at the time of making the acquisition the entity was not registered for GST. After making the acquisition, the entity applied for GST registration. The Commissioner registered the entity and backdated the entity's registration to a date before the entity made the acquisition.

Section 25-15 of the GST Act deals with the effect of backdating an entity's registration. Paragraph 25-15(b) of the GST Act provides that when the Commissioner backdates an entity's registration, the entity is taken to have been registered from and including its backdated registration day for the purposes of determining whether an acquisition the entity made on or after that day, was a creditable acquisition.

Therefore, the entity is taken to have been registered from the day to which its GST registration was backdated. As this day is before the entity made the acquisition, the entity is taken to have been registered when it made the acquisition.

As all the requirements in section 11-5 of the GST Act are met, the entity is making a creditable acquisition. Accordingly, the entity is entitled to an input tax credit under section 11-20 of the GST Act for an acquisition it made before applying for GST registration, when its GST registration is backdated to a date before the entity made the acquisition.

[Note 1: Where an entity's registration is backdated, it is also taken to have been registered for GST from and including its registration day for the purposes of determining whether the entity made a taxable supply under section 9-5 of the GST Act or a creditable importation under section 15-5 of the GST Act.
Note 2: An entity is not entitled to an input tax credit under section 11-20 of the GST Act for acquisitions made prior to the date of effect of its GST registration (see ATO ID 2002/438).
Note 3: A company may be entitled to input tax credits for pre-establishment costs incurred prior to the date of registration under Division 60 of the GST Act.]

Date of decision:  28 February 2002

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   section 11-5
   section 11-20
   section 15-5
   section 25-15
   paragraph 25-15(b)
   Division 60

Related ATO Interpretative Decisions
ATO ID 2002/438

Keywords
Goods & services tax
GST registration
GST supplies & acquisitions
Creditable acquisition

Business Line:  GST

Date of publication:  31 May 2002

ISSN: 1445-2782

history
  Date: Version:
  28 February 2002 Original statement
You are here 16 September 2005 Archived

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