ATO Interpretative Decision
ATO ID 2002/683 (Withdrawn)
Goods and Services Tax
GST and date of effect of GST group approvalFOI status: may be released
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This ATO ID is withdrawn because it is superseded by the GST fact sheet: 'Approvals of GST groups and GST joint ventures: date of effect guidelines'.This document incorporates revisions made since original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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Under section 48-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), can the entities, companies A, B and C, have the date of effect of the approval for their GST group as a day prior to the day from which all of the entities meet the GST group membership requirements?
Decision
No, under section 48-85 of the GST Act, the entities cannot have the date of effect of the approval for their GST group as a day prior to the day from which all of the entities meet the GST group membership requirements.
Facts
The entities are companies A, B and C. The entities apply for approval as a GST group. In their application, the entities request that the date of effect of the approval for their GST group commence on an earlier day.
On the earlier day specified in the application, company A had monthly tax periods, company B had quarterly tax periods and company C was not yet registered for goods and services tax (GST).
Subsequently, company B changed to monthly tax periods and company C registered for GST with monthly tax periods.
The entities are part of the same 90% owned group. At the time of the application for approval as a GST group, the entities have the same tax periods and account for GST on the same basis. The entities are not members of any other GST groups and they do not have any branches that are registered under Division 54 of the GST Act.
Reasons for Decision
Under subsection 48-85(1) of the GST Act, the Commissioner must decide the date of effect of any approval under Division 48 of the GST Act. However, subsection 48-85(2) of the GST Act provides that this day must be the beginning of a tax period applying to the members of the GST group in question.
The first tax period that applies to a GST group is the first tax period commencing on or after all of the members have satisfied the requirements of a GST group. Therefore, for the date specified in the entities' application to be the beginning of a tax period that applies to the entities as a GST group, the entities must satisfy the requirements of a GST group on or before the specified day.
One of the requirements for approval as a GST group is that the members must satisfy the membership requirements in section 48-10 of the GST Act. Under section 48-10 of the GST Act, a company satisfies the membership requirements for a GST group if:
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- it is of the same 90% owned group as all the other companies of the proposed GST group;
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- it is registered for GST;
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- it has the same tax periods applying to it as all the other members of the proposed GST group;
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- it accounts on the same basis as all the other members;
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- it is not a member of any other GST group; and
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- it does not have any branch that is registered under Division 54 of the GST Act.
On the day specified in the entities' application for approval as a GST group, company A had monthly tax periods, company B had quarterly tax periods and company C was not yet registered for GST. Therefore, the same tax periods did not apply to each member of the proposed GST group. In addition, company C was not registered for GST. As such, on the day specified in their application, the entities did not meet the membership requirements of a GST group under section 48-40 of the GST Act. Accordingly, the day specified in the entities' application cannot be the beginning of a tax period that applied to the members of the GST group.
Therefore, under section 48-85 of the GST Act, the entities cannot have the date of effect of the approval for their GST group as a day prior to the day from which all of the entities meet the GST group membership requirements.
[Note: After company B changes to monthly tax periods and company C registers for GST with monthly tax periods, the entities will meet the membership requirements in section 48-10 of the GST Act. Therefore, provided they satisfy the other approval requirements in section 48-5 of the GST Act, the date of effect of approval of the GST group can be the beginning of a tax period that commences on or after the day that company A, B and C are all registered for GST and all have monthly tax periods.]
Date of decision: 20 December 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
Division 48
section 48-5
subsection 48-5(1)
section 48-10
section 48-85
subsection 48-85(1)
subsection 48-85(2)
Division 54
Keywords
Goods & services tax
GST registration
GST groups
ISSN: 1445-2782
| Date: | Version: | |
| 20 December 2001 | Original statement | |
| You are here | 5 April 2007 | Archived |