In a decision handed down on Tue 16.7.2013, the AAT affirmed the Commissioner’s decision to impose on a taxpayer an administrative penalty at the rate of 50% for “recklessness”.
The taxpayer was an importer of construction goods. On 16 July 2012, it lodged a BAS claiming input tax credits (ITC) for the GST payable in relation to the importation of 50,000 LED lights from Hong Kong. The Tribunal noted the subject “goods had not left the country of origin – and indeed had not been manufactured – and hence there was no taxable importation for GST purposes”. The taxpayer was subject to a GST audit in July 2012, which determined that it was not entitled to ITCs claimed in respect of the period 1 April to 30 June 2012. The ITCs were reduced by $72,317 to $2,512, resulting in a shortfall amount of $72,317. In addition, the Commissioner imposed an administrative penalty of $36,158.50, which represented 50% of the shortfall on the basis that the taxpayer had displayed “recklessness” as to the operation of the tax law.
The Tribunal agreed with the Commissioner’s assessment that the taxpayer’s conduct was “reckless” within the meaning of s 284-90(1) of Sch 1 to the TAA. It said the “recklessness was exhibited by the [taxpayer] in filing a manifestly inaccurate BAS, completed by the [taxpayer’s] agent…”. In addition, the AAT did not consider it would be appropriate for the penalty to be remitted in the circumstances.
(AAT Case [2013] AATA 501, Re AJJJ’s Emporium Pty Ltd and FCT, AAT, Ref No: 2012/5106, Hughes M, 16 July 2013.)
[LTN 135, 16/7/13]