ATO Interpretative Decision
ATO ID 2004/672 (Withdrawn)
Goods and Services Tax
GST and revocation of approval of a GST group member when under administrationFOI status: may be released
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This ATO Interpretative Decision is withdrawn from the database because it contains a view in respect of a provision of the application of the A New Tax System (Goods and Services Tax) Act 1999 ('GST Act') that does not apply for administrations that commence on or after 4 December 2009. Section 27-39 of the GST Act, which is about tax periods of incapacitated entities, took effect on 4 December 2009. Despite its withdrawal from the database, this ATO Interpretative Decision continues to be a precedential view in respect of decisions for an entity that goes into administration prior to 4 December 2009.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Withdrawn 30 March 2012
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Will the entity, a member of a GST group, have its GST group membership approval revoked by the Commissioner under subsection 48-70(2) of the A New Tax System (Goods and Services) Act 1999 (GST Act) when the entity, and no other GST group member, goes under administration?
Decision
No, the entity will not have its GST group membership revoked by the Commissioner under subsection 48-70(2) of the GST Act when the entity, and no other GST group member, goes under administration.
Facts
The entity is a member of a GST group. The entity goes under administration and is the only member of the GST group that goes under administration.
While under administration, the entity continues to trade.
The entity has not become a member of another GST group nor has it registered any branches for GST purposes.
Reasons for Decision
Under subsection 48-70(2) of the GST Act, the Commissioner must revoke the approval of one of the members of a GST group if satisfied that the member does not satisfy the membership requirements for the GST group.
Section 48-10 of the GST Act provides that an entity satisfies the membership requirements of a GST group if the entity:
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- satisfies the relevant relationship requirements with the other members of the GST group
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- is registered for goods and services tax (GST)
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- has the same tax periods applying to it as the tax periods applying to all the other members of the GST group
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- accounts for GST on the same basis as all other members of the GST group
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- is not a member of any other GST group, and
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- does not have any branch that is registered under Division 54 of the GST Act.
The entity goes under administration and continues to trade. Being under administration does not affect the relationship that the entity has with other group members, its GST registration or its tax periods and accounting basis. The entity has not become a member of another GST group nor has it registered any branches for GST purposes. Therefore, being under administration does not prevent the entity from satisfying the membership requirements of a GST group as set out in section 48-10 of the GST Act.
As such, the entity's GST group membership approval will not be revoked by the Commissioner under subsection 48-70(2) of the GST Act.
Note: Even though the entity is able to remain in the group, the administrator appointed to the entity must account for GST as a separate entity, and separate from the GST group. The administrator, in their capacity as administrator of the entity, is not a member of the GST Group that the entity is a member of. Consequently the administrator cannot account for GST as a member of a GST group but accounts for GST separately as a separate entity. Any supplies or acquisitions made by the administrator to or from other group members are not intra-group supplies and will be taxable supplies or creditable acquisitions where the other requirements of Division 9 and Division 11 of the GST Act are met.
Date of decision: 2 May 2002
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 48-10
subsection 48-70(2)
Division 147
Keywords
Goods and Services Tax
GST registration
GST groups
Administration
Representative of incapacitated entity
ISSN: 1445-2782
| Date: | Version: | |
| 2 May 2002 | Original statement | |
| You are here → | 30 March 2012 | Archived |