The ATO on Fri 23.8.2013, released a Decision Impact Statement on the AAT’s decision in AAT Case [2013] AATA 443, Re Naidoo and FCT.
In that case, the AAT found that a partnership was not carrying on an enterprise and therefore was not entitled to input tax credits claimed in respect of the relevant period. However, the AAT held that s 105-65 of Sch 1 to the TAA did not apply in the way the Commissioner contended and that the net amount in the relevant period was zero (ie not a positive net amount). It concluded that s 105-65 of Sch 1 to the TAA was not a provision, which allowed the Commissioner to alter the net amount calculated under s 17-5(1) of the GST Act.
Broadly, the ATO said other than the s 105-65 issue, the AAT’s decision was consistent with the Commissioner’s submissions. It said it has not appealed the Tribunal’s decision that it does not have jurisdiction in respect of s 105-65, and will adopt the Tribunal’s view on this issue. Therefore the ATO said the effect of the decision is that s 105-65 does not alter the determination of a taxpayer’s net amount under the GST Act, and the AAT does not have jurisdiction to review the Commissioner’s decision under s 105-65. It said where taxpayers seek a refund of overpaid GST but the Commissioner refuses to exercise his discretion under s 105-65 to pay a refund, taxpayers will not be able to seek review of this decision before the Tribunal (ie the taxpayer’s review rights are limited to judicial review).
The ATO said where a taxpayer believes the Commissioner’s previous view regarding the application of s 105-65 resulted in the recovery of excess amounts, they may seek a refund of amounts incorrectly recovered by lodging a request via the GSTmail@ato.gov.au mailbox.
It said it will also revise MT 2010/1 regarding whether s 105-65 is taken into account in determining the net amount and the circumstances under which s 105-65 applies to restrict the refund of an overpaid amount of GST.
[LTN 163, 23/8/13]