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Ruling

Subject: GST and revoking annual GST reporting

Question 1

Can you revoke your goods and services tax (GST) reporting option from annual reporting to monthly reporting with effect from 1 April 2012?

Answer

No.

Relevant facts and circumstances

You are a company that is registered for goods and services tax (GST).

You elected to report GST annually.

You wish to change from annual GST reporting to monthly GST reporting as you find it much easier to manage the funds and payments on a monthly basis compared to an annual basis.

You wish to report GST on a monthly basis effective from 1 April 2012.

You have requested the Commissioner in the approved form dated January 2012 to revoke your annual GST election.

Reasons for decision

In accordance with Division 151 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you made an election to lodge your GST returns on an annual basis.

Subsection 151-25(1) of the GST Act provides that your election to report GST annually ceases to have effect if:

§ you revoke it by notifying the Commissioner in the approved form or

§ the Commissioner disallows it if the Commissioner is satisfied that you have failed to comply with one or more of your obligations under a taxation law or

§ on 31 July in a financial year, you are required to be registered for GST, or

§ in a case where you are the representative member of a GST group, the membership of the GST group changes.

In your case you notified the Commissioner in the approved form that you wanted to change your annual GST reporting to monthly GST reporting.

Subsection 151-25(2) of the GST Act specifies when you are able to revoke your election to report annually. Under paragraph 151-25(2)(a) of the GST Act if you notify the Commissioner of the revocation of your election on or before 28 October in a financial year, your annual election will cease to have effect from 1 July of that year.

However, if you notify the Commissioner of the revocation of your election after 28 October in a financial year, paragraph 151-25(2)(b) of the GST Act provides that the revocation of your election is taken to have effect, or has effect from the start of the next financial year.

In your case, you notified the Commissioner in January 2012. As your request was made after

28 October 2011, the requirement of paragraph 151-25(2)(a) of the GST Act has not been satisfied.

Consequently, under the requirements of subsection 151-25(2) of the GST Act you cannot revoke your election to report and pay GST annually from 1 April 2012.

There is no discretion in the GST legislation for the Commissioner to allow the revocation of your election to take effect from 1 April 2012.

However, you can revoke your annual election with effect from 1 July 2012.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 23-5

A New Tax System (Goods and Services Tax) Act 1999 Section 151-25