On 11 Nov 2022, the AAT found that a taxpayer was unable to show that he was carrying on an enterprise and was therefore not entitled to a GST refund received from the ATO.

In his BAS for the quarter ended 31 December 2021 (allegedly in his business’ first year of operations), the taxpayer recorded purchases of goods and services totalling just over $415,000 and sales of just over $25,500. This led to a substantial GST refund. Following an audit, the ATO determined that the taxpayer was not carrying on an enterprise for the purposes of the GST Act and therefore he was not entitled to the refund.

The AAT agreed with the ATO. The taxpayer claimed that there were no written contracts, he conducted his business solely in cash and any invoices and written correspondence he had were lost in a flood, along with a quotes workbook and a laptop containing electronic information. However, he made no attempt to obtain substitute documents or reconstruct records and he failed to provide particulars of any transactions to support the amounts reported in the December 2021 quarter BAS. Nor was there any independent evidence that the taxpayer was carrying on a business.

(Chami  v CofT [2022] AATA 3797, AAT, Grigg SM, 11 November 2022.) [LTN 217, 14/11/22]



[Tax Month – November 2022 – Previous Month, 17.11.22]