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Edited version of your written advice
Authorisation Number: 1051321888307
Date of advice: 21 December 2017
Ruling
Subject: GST
Question
Is the entity still entitled to claim GST credits with electronic filing only and without original paper tax invoices?
Answer
Yes.
Relevant facts and circumstances
● The entity (you) is registered for the goods and services tax (GST).
● You are currently keeping all incoming paper invoices in paper form even though you scan and save them online as well.
● In order to save time and space, you intend to use electronic filing only.
● You intend to keep only electronic copies of all incoming invoices (including documents that are tax invoices for GST purposes) and intend to get rid of the original paper documents after having scanned and filed them electronically.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 subsection 29-70(1)
Section 382-5 of Schedule 1 to the Taxation Administration Act 1953
Reasons for decision
An entity's obligation to keep records in relation to supplies, acquisitions and importations for GST purposes are found in the Taxation Administration Act 1953 (TAA) rather than in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Section 382-5 of Schedule 1 to the TAA sets out the recordkeeping requirements of indirect tax transactions. An entity which makes a taxable supply, GST-free supply, input taxed supply, taxable importation, creditable acquisition or creditable importation is required to keep records that identify and explain all transactions and acts that are relevant to that supply.
Goods and services tax ruling GSTR 2003/1, in relation to tax invoices, states at paragraphs 12 and 75 that a document in electronic form that meets the requirements of subsection 29-70(1) of the GST Act will be in the approved form for a tax invoice.
Records that explain indirect tax transactions and acts relevant to the supply, importation, acquisition and dealing, need to be retained for at least five years after the completion of the transactions or acts to which they relate.
The records whether kept on paper or electronically must be kept accurately so as to enable the entity’s liabilities and entitlements under an indirect tax law to be readily ascertained.
The records must be in English, or easily convertible to English, and must be in readily accessible form (either printed or electronic). The records must be in a form which Tax Office staff can access and understand in order to ascertain the entity's liabilities and entitlements.
Taxation Rulings TR96/7 and TR 2005/9 set out the Commissioner’s views about record keeping requirements and the application of section 262A of the Income Tax Assessment Act 1936, which is similar to section 382-5 of Schedule 1 to the TAA. The points made in those rulings apply equally in the context of section 382-5 of Schedule 1 to the TAA for GST purposes.
● The keeping of records includes information stored or recorded by means of a computer.
● A person carrying on a business may keep documents and records made by and/or stored in a computer system. Records made by and stored in a computer are recognised as documents for the purposes of Commonwealth legislation.
● A business using either a manual or a computerised accounting system may want to store and keep paper records in electronic form. Where paper records are produced or received in the course of carrying on business, the Tax Office accepts the imaging of those records onto an electronic storage medium provided that the electronic copies are a true and clear reproduction of the original paper records.
● Where paper records are imaged and stored, they must not be altered or manipulated once stored; and must be capable of being retrieved and read at all times by Tax Office staff.
Therefore where you have accurate electronic business records of incoming invoices, you are not also required to keep a paper copy of the associated invoices.
You will still be entitled to claim GST credits for creditable acquisitions where you no longer hold the original paper tax invoices for those acquisitions; but you hold the corresponding tax invoice in electronic form; and the electronic copy is a true and clear reproduction of the original paper record.