ATO Interpretative Decision

ATO ID 2001/142 (Withdrawn)

Goods and Services Tax

• Decision Withdrawn. This ATO ID is withdrawn as it does not accurately reflect the wording of section 27-22 of the GST Act.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Does the entity satisfy the requirements under section 27-22 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), to change its tax periods from monthly to quarterly from 1 January 2001?

Decision

Yes, the entity does satisfy the requirements under section 27-22 of the GST Act, to change its tax periods from monthly to quarterly from 1 January 2001.

Facts

In September 2000, the entity applied to the Commissioner in the approved form to have its tax periods changed from monthly to quarterly from 1 January 2001.

Prior to September 2000, the entity had elected to account for goods and services tax (GST) on a monthly basis under section 27-10 of the GST Act.

The annual turnover of the entity is below the turnover threshold for entities that account for GST on a monthly basis.

Reasons for Decision

Section 27-20 of the GST Act states that an entity may withdraw their election to account on a monthly basis if:

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the application to withdraw the election is in the approved form; and

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the entity's annual turnover is below the tax period turnover threshold; and

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the date of effect of the withdrawal is 1 January, 1 April, 1 July or 1 October, or any day occurring before the election takes effect; and

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the date of effect of your withdrawal does not occur earlier than 12 months after the election took effect.

In this case, the election of monthly tax periods by the entity has not been in effect for the required 12 months. Therefore, the entity cannot withdraw the election.

However, under section 27-22 of the GST Act, the Commissioner has the discretion to revoke the entity's election to account for GST on a monthly basis. This discretion takes effect from 21 December 2000.

Section 27-22 of the GST Act requires an entity wishing the Commissioner to revoke its election to account for GST on a monthly basis to make a request in the approved form. The entity must notify the Commissioner in the approved form, unless the annual turnover of the entity meets the turnover threshold for entities that account for GST on a monthly basis, stated in subsection 27-15(3) of the GST Act. This revocation can take place within 12 months of the election to account for GST on a monthly basis made by an entity.

In this case, the entity notifies the Commissioner in the approved form and its annual turnover is below the turnover threshold for entities that account for GST on a monthly basis.

Furthermore, under subsection 27-22(2) of the GST Act, the Commissioner, when considering an application to revoke an election under section 27-22 of the GST Act, may have regard to:

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for how long the tax periods applying to the entity have been each individual month; and

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whether you have previously been registered, and whether such tax periods applied to the entity; and

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any other relevant matters.

In this case, there are no other factors that established that it was not appropriate to allow the entity to change its tax periods from monthly to quarterly from 1 January 2001. Accordingly, these three matters are not relevant in this instance.

Therefore, the entity meets the requirements under section 27-22 of the GST Act to change its tax periods from monthly to quarterly.

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 27-10
   subsection 27-15(3)
   section 27-20
   section 27-22
   subsection 27-22(2)

Keywords
Goods & services tax
GST favourable decision
GST tax periods
1 month period
3 month period
GST reviewable decision item 8B

Business Line:  GST

Date of publication:  1 August 2001

ISSN: 1445-2782