ATO Interpretative Decision
ATO ID 2003/1179
Goods and Services Tax
GST and date of effect to account on a cash basisFOI status: may be released
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 date of effect of the choice by an entity to account on a cash basis, under subsection 29-40(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), be the first day of a tax period that has ended before the choice is made?
Decision
No, the date of effect of the choice by an entity to account on a cash basis under subsection 29-40(1) of the GST Act cannot be the first day of a tax period that has ended before the choice is made.
Facts
The entity is a business operator that is registered for goods and services tax (GST) and accounts for GST on a non-cash basis.
The entity satisfies at least one of the requirements under section 29-40(1) of the GST Act that allows an entity to choose to account on a cash basis.
The entity made a choice to account on a cash basis and requested that the date of effect be the first day of a tax period that ended before the entity made its choice.
Reasons for Decision
Subsection 29-40(1) of the GST Act provides that where certain requirements are met, an entity can choose to account on a cash basis with effect from the first day of the tax period that the entity chooses.
The Commissioner considers that the date of effect is the first day of the tax period during which the entity makes its choice or the first day of any subsequent tax period. However, the date of effect cannot be the first day of a tax period that has ended before the entity made its choice.
Date of decision: 6 August 2003
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 29-40(1)
Keywords
Goods and services tax
GST tax periods
Cash basis
Non cash basis
ISSN: 1445-2782