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Edited version of private advice
Authorisation Number: 1051734527575
Date of advice: 30 November 2020
Ruling
Subject: GST grouping
Question
Does Company A satisfy the membership requirements set out in section 48-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to be added to the GST Group A?
Answer
Yes, Company A satisfies the membership requirements set out in section 48-10 of the GST Act to be added to the GST Group A.
Relevant facts and circumstances
GST Group Representative of GST Group A wants to add Company A to its GST Group which consists of four other group members.
Each group member accounts for GST on a non-cash (accruals) basis and reporting in monthly tax periods.
Company A is registered for GST, accounts for GST on accruals basis and reporting in monthly tax periods.
Company A is not a member of any GST group nor does it have any branch registered.
Company A and GST Group Representative are of the same 90% owned group of companies.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 48-10
A New Tax System (Goods and Services Tax) Act 1999 section 48-15
A New Tax System (Goods and Services Tax) Act 1999 section 190-5
Reasons for decision
All legislative references in this ruling are to the GST Act unless otherwise stated.
Under Division 48, entities with common ownership that meet certain conditions are eligible to form a GST group.
In relation to the membership requirements, subsection 48-10(1) states:
(1) An entity satisfies the membership requirements of a *GST group, or a proposed GST group, if the entity:
(a) is:
(i) a *company; or
(ii) a *partnership, trust or individual that satisfies the requirements specified in the regulations; and
(b) is, if the entity is a company, a company of the same *90% owned group as all the other members of the GST group or proposed GST group that are also companies; and
(c) is *registered; and
(d) has the same tax periods applying to it as the tax periods applying to all the other members of the GST group or proposed GST group; and
(e) accounts on the same basis as all the other members of the GST group or proposed GST group; and
(f) is not a member of any other GST group; and
(g) does not have any branch that is registered under Division 54.
* An asterisk denotes a defined term in section 195-1
In this case, Company A and GST Group Representative satisfy the requirements listed under paragraphs 48-10(1)(c) to (g).
Both Company A and GST Group Representative are of the same 90% owned group of companies.
As both Company A and GST Group Representative satisfy all the requirements set out under section 48-10, Company A is eligible to be added to the GST Group A.