The AAT has set aside the Commissioner’s amended assessment in relation to a BAS for the period 1 April 2008 to 30 June 2008 and held that the taxpayer’s net amount for the quarter was zero. It did so on the basis that the amended assessment was excessive.

The taxpayer company lodged a BAS for the period 1 April 2008 to 30 June 2008 reporting GST on sales of $32,098 in respect of its supply of services to a non-resident company. Subsequently, the taxpayer sought and obtained a private ruling that the supply of those services was GST-free. It then revised the BAS for the relevant period and obtained a refund of the amount. The Commissioner then issued an amended assessment for the quarter disallowing the refund. The taxpayer broadly argued it was entitled to a refund under the legislation in force on and before 30 June 2008. It also argued that the assessment was excessive. The Commissioner argued that the taxpayer was not entitled to a refund as notice was not given within 4 years after 30 June 2008.

The Tribunal held that largely the Commissioner was correct as the revised BAS was lodged after the 4-year limit on entitlement to a refund had lapsed. However, it held that the GST refund issued to the taxpayer should be classified as an administrative overpayment and as such, to recover the amount, the correct approach would be to issue a notice as provided for by s 8AAZN(2) of the TAA. The AAT said it did not accept the Commissioner’s amended assessment as an effective notice for the purposes of s 8AAZN(2) as it did not specify a due date for payment at least 30 days after the notice was given. Consequently, it said the administrative overpayment of $32,098 could not be applied in calculating the taxpayer’s net amount for the relevant period, “and it cannot properly be included in the [amended assessment] as an administrative overpayment, if such an overpayment exists”. The AAT therefore set aside the Commissioner’s amended assessment as it was excessive and held that the taxpayer’s net amount for the relevant quarter was zero.

(AAT Case [2013] AATA 891, Re Swanbat Pty Ltd and FCT, AAT, Ref No 2013/2025, Webb M, 13 December 2013.)

[LTN 243, 16/12/13]

Extract from Taxation Administration Act 1953

SECT 8AAZN – Overpayments made by the Commissioner under taxation laws

(1)  An administrative overpayment (the overpaid amount ):

(a)      is a debt due to the Commonwealth by the person to whom the overpayment was made (the recipient ); and

(b)      is payable to the Commissioner; and

(c)      may be recovered in a court of competent jurisdiction by the Commissioner, or by a Deputy Commissioner, suing in his or her official name.

(2)      If:

(a)      the Commissioner has given a notice to the recipient in respect of the overpaid amount, specifying a due date for payment that is at least 30 days after the notice is given; and

(b)  any of the overpaid amount remains unpaid at the end of that due date;

then the recipient is liable to pay the general interest charge on the unpaid amount for each day in the period that:

(c)      started at the beginning of that due date; and

(d)      finishes at the end of the last day on which, at the end of the day, any of the following remains unpaid:

(i)      the overpaid amount;

(ii)     general interest charge on any of the overpaid amount.

(3)  In this section:

“administrative overpayment” means an amount that the Commissioner has paid to a person by mistake, being an amount to which the person is not entitled.

Note:          Subsection 2(2) specifies laws that are not taxation laws for the purposes of this Part.

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