The AAT has held that a taxpayer was not entitled to “revise” earlier business activity statements (BAS) to claim input tax credits for acquisitions made more than six years previously.
Facts – The taxpayer was registered for GST and lodged its BAS for the tax periods ended 31 March 2005, 30 June 2005 and 30 June 2006 on 29 April 2005, 28 July 2005 and 26 July 2006, respectively.
- In October 2012 the taxpayer purported to “revise” its BAS for the June 2005 quarter by (a) reporting GST on taxable supplies that had not previously been reported, and (b) claiming ITCs it had not previously claimed. The ITCs were greater than the GST, leaving the taxpayer with a net amount of id=”mce_marker”,903 credit, which the Commissioner deposited into the taxpayer’s bank account.
- In November 2012 the taxpayer also “revised” its BAS for the June 2006 and March 2005 quarters respectively. The revised BAS for June 2006, like the one for June 2005, reported both GST and ITCs, leaving the taxpayer with a negative net amount.
The Commissioner did not refund to the taxpayer either of the negative net amounts resulting from the revised BAS for March 2005 and June 2006. Instead, the Commissioner wrote to the taxpayer, explaining that it was not entitled to any of the refunds (including the one already paid, for the June 2005 quarter) because the taxpayer’s BAS revisions were out of time. The Commissioner made nil assessments for each of the three quarters, placing the taxpayer back into the position it was in after lodging the original BAS in 2005 and 2006.
The Commissioner disallowed the taxpayer’s objections to the assessments and the taxpayer sought a review of the objection decisions.
The Commissioner claimed that, under s93-5 of the GST Act, the taxpayer “ceased to be entitled” to the ITCs for the creditable acquisitions as soon as Div 93 became law. That was because the taxpayer had not taken the creditable acquisitions into account in working out its net amount for:
(a) the tax periods to which the ITCs would be attributable under s 29-10(1) or (2) — that is, the quarterly tax periods that ended on 31 March 2005, 30 June 2005 and 30 June 2006, or
(b) any other tax period for which it gave the Commissioner a GST return during the period of four years after the due date for those tax periods — 28 April 2005, 28 July 2005 and 28 July 2006.
Further, under the application provisions of the amending Act (cl 19 in Sch 1 of Act No 20 of 2010), which inserted Div 93, s 93-5 was engaged because the amendment was expressed to apply “in relation to acquisitions … that are taken into account in:”
- GST returns given to the Commissioner under the GST Act after 7.30 pm AEST on 12 May 2009, and
- assessments made by the Commissioner after that time.
The taxpayer claimed that the Commissioner’s interpretation of the amending Act was in conflict with other existing GST legislation, specifically s 29-10(4), which contains the attribution rules for ITCs. It argued that prior to the insertion of Div 93 there was no time limit of the kind asserted by the Commissioner. Therefore, for acquisitions that were made prior to 12 May 2009, a taxpayer had an unrestricted entitlement to claim ITCs because of the terms of s 29-10(4).
Decision – The AAT rejected the taxpayer’s submissions. It said the amendments inserting s93-5 applied “in relation to acquisitions … that are taken into account in GST returns given to the Commissioner under the GST Act after 7.30 pm AEST on 12 May 2009”. There was no need to specify whether the acquisitions needed to have been made before, or after, 12 May 2009 because the provision was fixing not upon the timing of the acquisition but upon the timing of the lodgment of the return, or the timing of the making of an assessment.
In the taxpayer’s case, acquisitions were taken into account in GST returns (the revised BASs) that were given to the Commissioner in October and November 2012 — in other words, after 7.30 pm on 12 May 2009. That meant that the terms of s93-5 applied. The taxpayer ceased to be entitled to the ITCs because, before 7.30 pm on 12 May 2009, the ITCs had not been included in the BASs for the March 2005, June 2005 or June 2006 quarters or in any of the BASs lodged by the taxpayer during the following four year period.
As for the taxpayer’s submission that this interpretation was “in conflict” with s 29-10(4), the Commissioner correctly pointed out that this supposed “conflict” was not a conflict at all, because s29-10(4) was dealing with attribution, while s93-5 was dealing with entitlement. There could be no attribution where there was no entitlement.
In any event, as s 29-10(4) makes clear, once the original BASs were lodged without taking into account the creditable acquisitions that could have been included in them, the ITCs were no longer attributable to those tax periods. As a result, the “revisions” of the BAS in late 2012, in an attempt to claim ITCs not included in the original BAS, would not have been effective, even putting s93-5 to one side.
Accordingly, the AAT affirmed the Commissioner’s objection decisions.
AAT ref: [2015] AATA 174 SE Frost (Deputy President), 26 March 2015, Sydney.
[IT 30/3/15]
In The Trustee for SBM Trust and Commissioner of Taxation [2015] AATA 174 the Tribunal found that the effect of s 93-5 of the GST Act was that the applicant was not entitled to amend its BAS to claim input tax credits that related to acquisitions made more than four years ago. The Tribunal also found that it did not matter that the acquisitions were made before the commencement date of s 93-5.
The Tribunal accepted the Commissioner’s argument that the effect of s 93-5(a) was that the applicant “ceased to be entitled” to the input tax credits as soon as Division 93 became law – this was because the taxpayer had not taken those credits into account in the tax period in which the acquisitions were made or any other tax period during the subsequent four years from the tax period in which the acquisitions were made.
The Tribunal rejected the applicant’s submission that s 93-5 applies only to acquisitions made after 12 May 2009 (the date of its application). This is because the provision does not fix on the date of the acquisition, but on the timing of the lodgement of the GST return.
[Sievers]
Extract from the ANTS (GST) Act 1999
93-5 Time limit on entitlements to input tax credits
(1) You cease to be entitled to an input tax credit for a * creditable acquisition to the extent that the input tax credit has not been taken into account, in an * assessment of a * net amount of yours, during the period of 4 years after the day on which you were required to give to the Commissioner a * GST return for the tax period to which the input tax credit would be attributable under subsection 29-10(1) or (2).
Note: Section 93-10 sets out circumstances in which your entitlement to the input tax credit does not cease under this section.
(2) This section has effect despite section 11-20 (which is about entitlement to input tax credits).
Note: You must hold a valid tax invoice relating to a creditable acquisition to be entitled to have an input tax credit for that acquisition taken into account in working out your assessed net amount for a tax period: see subsection 29-10(3).