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Edited version of your written advice
Authorisation Number: 1051512995879
Date of advice: 15 May 2019
Ruling
Subject: Does a certain enterprise need to be registered for GST?
Question
Is Entity A required to be registered for GST?
Answer
No, Entity A is not required to be registered for GST
Relevant facts and circumstances
Entity A acquired an asset and used it to carry on activities which constituted an enterprise. Entity A anticipated it would earn income which would require it to be registered for GST. Entity A was registered for GST, but made profits in a range of $XX (well below $75,000).
Entity A subsequently made a private ruling application to determine if it could deregister.
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 23-15
A New Tax System (Goods and Services Tax) Regulations 1999
Reasons for decision
Section 23-5 of the GST Act requires an entity to be registered for GST if the entity is:
1. carrying on an enterprise, and
2. meets the registration turnover threshold
The registration turnover threshold is defined in section 23-15 of the GST Act.
In this case Entity A satisfies the first requirement of section of 23-5. However, Entity A expects to earn no more than $XX (well below $75,000) through its activities in the coming year. When the requirements of subsection 23-15 (1) are applied as well as the relevant Regulations, the turnover threshold applicable to Entity A is $75,000. Since Entity A is earning substantially less than $75,000 it does not satisfy the second requirement of section 23-5 listed above and consequently it is not required to be registered for GST.