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Ruling

Subject: Date of effect of GST registration

Question

Will the Commissioner allow you to register for the Goods and Services Tax (GST) effective from August 2011?

Answer

No, the date of effect of your GST registration is when you first became required to be registered for GST.

Relevant facts and circumstances

You carry on a catering business.

You examined your turnover to see if you exceeded the registration turnover threshold and realised that you were required to be registered for GST.

You calculated your current annual turnover commencing in a month in 2011. This turnover exceeded the threshold of $75,000.

The reason for this was that your business activity was high in early 2011 due to the high number of activities being held at that time for which you supply catering services

You also did a calculation of your projected annual turnover, commencing in August 2011. This turnover also exceeded the $75,000 threshold.

You wish to be registered for GST with a date of effect from August 2011.

Relevant legislative provisions

A New Tax System (Goods and Services Tax Act 1999 - Section 25-10.

Reasons for decision

Section 23-5 of the of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that an entity is required to register for GST if it is carrying on an enterprise and its GST turnover meets the registration turnover threshold. Currently the GST registration turnover threshold is $75,000; $150,000 for non- profit bodies).

An entity has a GST turnover that meets a particular turnover threshold if its current turnover is at or above the turnover threshold, and the Commissioner is not satisfied that its projected GST turnover is below the turnover threshold, or its projected GST turnover is at or above the turnover threshold (paragraph 188-10(1)(a)(b) of the GST Act).

As you are a for-profit body, your registration turnover threshold is $75,000.

Section 25-1 of the GST Act specifies that an entity must apply for registration if it is not registered for GST and becomes required to be registered. The entity must make its application within 21 days after becoming required to be registered.

Under Section 25-10 of the GST Act the Commissioner must decide the date from which your registration takes effect. However:

· if you did not apply for registration and the Commissioner is satisfied that you are required to be registered - the date of effect must not be a day before the day you became required to be registered; or

· if you applied to be registered - the date of effect must not be a day before the day specified in your application; or

· if the Commissioner is satisfied that you became required to be registered on an earlier date - the date the Commissioner is satisfied is that earlier date.

You advised that you exceeded the turnover threshold in early 2011. You are therefore required to be registered from the day you became required to be registered.

Note: The ATO view is contained in ATO ID 2002/529 Goods and Services Tax -
GST and date of effect of GST registration. This ATO ID is available on the Tax Office website at www.ato.gov.au.