In the 2011-12 Budget in May 2011, the Government announced that it would extend the current GST instalment system to allow access for small businesses that are in a net refund position. A discussion paper was released for public consultation on 6 June 2011. As a result of submissions, the proposal was altered to allow only those businesses already using the instalment system to continue to use it if they move into a net refund position.
Treasury has now released draft legislation for consultation to allow small businesses (ie annual GST turnover less than $2m) in a net refund position to continue to use the GST instalment system. The proposal is to amend the GST Act to enable those small business taxpayers who are paying their GST by instalments, and who subsequently move into a net refund position, to continue to use the GST instalments option if they wish to do so.
The proposed amendments would also provide that taxpayers who move into a net refund position and who wish to continue to pay GST by instalments receive an instalment amount each quarter of zero.
COMMENTS are due by 4 December 2012.
[LTN 214, 5/11]