A taxpayer has been successful before the AAT in seeking orders to allow its claim for GST input tax credits, totalling $2.8m, and to set aside a private ruling issued by the Commissioner, which had refused its claim [to those credits].
- The taxpayer claimed it was entitled to ITCs of $2.2m (relating to December 2005) and $600,000 (for January 2006).
- For the months of May 2004 to November 2005, the Commissioner accepted the taxpayer was entitled to ITCs in relation to amounts it claimed in its monthly BASs.
- However, the taxpayer did not lodge BASs for December 2005 and January 2006.
- In March 2006, a mortgagee [was] appointed a controller to the substantial property, whose (not yet completed) development had been the reason for the GST purchases reported in the taxpayer’s BASs – lodged up to November 2005.
- In June 2006, the taxpayer was placed in receivership, and the receiver subsequently sold the partially completed development.
- On 3 September 2006, the taxpayer wrote to the Commissioner informing him of the receiver’s appointment and that it was unable to lodge the BASs for December 2005 and January 2006 until it was able to access the necessary books and records taken by “ASIC and the receivers”.
- The letter was also to “provide notice that substantial GST refunds are due for these months”.
- In October 2012, the taxpayer applied for a private ruling [that it was entitled to the ITC’s it had now calculated].
- In June 2013, the Commissioner issued a private ruling which provided that the 4-year time limit to notify the Commissioner of the refund sought had expired (s 105-55 of Sch 1 to the TAA).
The taxpayer objected and the Commissioner disallowed the objection. The taxpayer then sought review from the Tribunal.
The Tribunal noted the taxpayer’s letter was not in the “permissive form” the Commissioner endorsed as sufficient notification. Accordingly, the key issue was whether the letter was sufficient notification for the purposes of s 105-55(1)(a) of Sch 1 to the TAA. The Tribunal held the taxpayer’s letter of 3 September 2009 was a notification for the purposes of s 105-55(1)(a) of Sch 1 to the TAA in relation to ITCs relating to the tax periods December 2005 and January 2006.
(AAT Case [2014] AATA 363, Re North Sydney Developments Pty Ltd and FCT, AAT, Ref No: 2013/4756, Taylor SC, 6 June 2014.)
[LTN 111, 12/6/14]
Relevant portions of the AAT’s reasons
After considering a number of authorities (including Central Equity Ltd v Federal Commissioner of Taxation [2011] FCA 908; MTAA Superannuation Fund (RG Casey Building) Property Pty Ltd v Commissioner of Taxation [2011] AATA 769; National Jet Systems Pty Ltd v Commissioner of Taxation [2011] AATA 766 and Brookdale Investments Pty Ltd v Commissioner of Taxation [2013] AATA 154) the Tribunal observed as follows (at [25]):
The common themes resonating through the decisions to which I have referred are the absence of any formal notification content requirement, a disavowal of amount specificity and the apparent sufficiency of a notice where it communicates a claim relating to a particular tax period in relation to a particular kind of tax liability. Implicit in the third theme, and variously expressed in the judgments and reasons, is a refusal to endorse any particular requirement for the details, grounds or even circumstances relied on to support the claim.
The Tribunal’s conclusion was as follows (at [31]):
In my view, North Sydney’s 3 September 2009 letter did notify the Commissioner of “the refund, other payment or credit” to which TAA Schedule 1: s 105-55(1)(a) applied. It did so for two reasons. Firstly, the provision required no greater specification than the tax period involved, and the nature of the refund or input tax credit claimed. The letter, by describing the notification as relating to the expected outcome of Business Activity Statements for December 2005 and January 2006, satisfied the requirements of a complying notification. Secondly, if the letter required some greater degree of specificity in order to permit satisfaction that any subsequent claim was covered by the notification, the letter also satisfied that requirement. It did so because it indicated that the reason for the notification was the lack of access to the contemporary books and records in the possession of the receiver. On this view any subsequent claim would be limited to a summarised reproduction of the information in the purchase, payment and supply records maintained by the receivers.
[Chris Sievers’ report]