The AAT has rejected a taxpayer’s appeal and upheld the Commissioner’s disallowance of its input tax credit (ITC) claims.
- The taxpayer’s main business activity was computer system design, although it also marketed licensed computer software.
- It accounted for GST on a cash basis.
- The Commissioner audited the taxpayer and reduced its ITC claims from $404,491 to nil in respect of the tax periods 1 April 2008 to 30 June 2011, and imposed a penalty of just over $200,000 for recklessness in making its BASs. The Commissioner claimed the taxpayer could not demonstrate that acquisitions of any services were actually made, and even if it could, there was no taxable supply.
The Tribunal rejected the taxpayer’s claims and held that it was not satisfied that services were provided to the taxpayer such as to enable it to claim the ITCs in respect of the relevant period. In upholding the penalty imposed, the Tribunal said the taxpayer was “grossly indifferent as to whether what was stated in the BASs was true or not, and failed to take reasonable care to comply with the applicable taxation laws”.
(AAT Case [2014] AATA 365, Re Advent 7 Pty Ltd and FCT, AAT, Deutsch DP, AAT Ref: 2012/4690-4691, 10 June 2014.)
[LTN 114, 17/6/14]