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Edited version of private ruling
Authorisation Number: 1011467344846
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Ruling
Subject: GST
Question 1
Can you change your goods and services tax (GST) reporting from paying GST by instalments (option 3) to report and pay actual GST amounts quarterly (option 1) during the current financial year?
Answer
No.
Relevant facts and circumstances
Your ruling is based on the following facts.
You are registered for GST.
You have been using option 3 to report and pay your GST.
You made a large acquisition.
You wish to claim an input tax credit (ITC) for this acquisition in your January to March BAS of the recent year which would require you to change from option 3 to option 1
You made your written request to the ATO to change from option 3 to option 1.
You state that waiting until you lodge your annual GST return will have an unfavourable impact on your cash flow and your business. You also state that you have a good payment history and good track record with the ATO.
You did not apply to change your option 3 election prior to 28 October as you were not aware it was necessary. You did not foresee the consequence that reporting GST using option 3 would have on your large acquisition.
You were not in a net refund position at the beginning of the recent financial year.
Your GST turnover is less than $2 million.
You are not a member of a GST group.
Reasons for decision
Summary
No, you can not change your GST reporting from option 3 to option 1 during the current financial year. The Commissioner has no discretion to allow you to make the change.
Detailed reasoning
An entity that meets the eligibility requirements of section 162-5 of the A New Tax System (Goods and Services) Tax Act 1999 (GST Act) is able to elect option 3 to report their GST. In your case, you elected option 3 in a previous financial year.
Under subsection 162-30(2) of the GST Act, you are able to revoke your option 3 election. However, the date of effect of the revocation will take effect from the start of the current financial year only where it is made on or before 28 October of that year. Otherwise, the date of effect of the revocation will be the start of the next financial year if the revocation is made after the 28 October.
In your case, you have not notified the Commissioner that you wanted to revoke your Option 3 election on or before 28 October. The written request submitted to the ATO was dated the particular month in the second quarter of the current year.
Your request to revoke your election during this financial year cannot be granted as Division 162 of the GST Act does not give the Commissioner any discretionary powers, even for reasons of hardship, to allow a revocation made after 28 October to take effect from a point in time other than the start of the next financial year.
Accordingly, there can be no change to your method of GST reporting for this financial year.
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