Advice and guidance
We offer private and public advice and guidance to help our clients understand their GST obligations, ensure a level playing field and address GST risks.
Key advice topics in 2021–22 included:
- GST international and cross-border
- core provision/special rules
- real property transactions
- food classification
- financial supplies
- GST registration.
In 2021–22, 602 GST-related private ruling requests were finalised, with 96% finalised within 28 calendar days of receiving all the necessary information. This exceeded the service standard of 80%.
There were 3,286 guidance cases completed in 2021–22, a decrease of 17% from last year and continuing a long-term decline since 2017–18. The decline in the number of our published guidance products reflects our shifting priorities during COVID-19, and the volume of timely and targeted practical advice published on ato.gov.au. We have continued to provide practical advice with a one-to-many focus through newly developed website guidance, including:
- digital currency
- social media content creators
- GST treatment of nutritional supplements, wound care, and analgesic products.
To assist clients and intermediaries, we continue to review and enhance our web guidance.
|
2017–18 no. |
2018–19 no. |
2019–20 no. |
2020–21 no. |
2021–22 no. |
|---|---|---|---|---|---|
Finalised GST-related private ruling requests |
840 |
641 |
565 |
614 |
602 |
Completed GST-related guidance cases |
5,492 |
4,712 |
3,966 |
3,941 |
3,286 |
The following public advice and guidance was progressed in 2021–22:
- Amendments to GSTR 2004/7 Goods and services tax: in the application of items 2 and 3 and paragraph (b) of item 4 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
- when is a 'non-resident' or other 'recipient' of a ‘supply not in Australia when the thing supplied is done'?
- when is 'an entity that is not an Australian resident' 'outside Australia when the thing supplied is done'?
- Finalisation of GSTD 2021/2 Goods and services tax: adjustable beds, pressure management mattresses and pressure management overlays.
- Consultation in relation to Draft GSTD 2021/D2 Goods and services tax: is the supply of a burial right in respect of a public cemetery subject to GST?
Dispute management
GST objections
The majority of the 665 GST objections received in 2021–22 related to audit activity undertaken by the ATO and is a significant increase (over 60%) from the previous year. This is attributable to the audit activity related to Operation Protego and its focus on GST refund integrity. Most GST objections came from small businesses.
Figure 9: Number of objection cases created
There were 535 GST objections finalised in 2021–22, a decrease of 34% from 2020–21. This decrease is due to a large cluster of self-objections (not related to audit activity) on a specific issue that were finalised in 2020–21. The prominent issues in 2021–22 relate to pre-issue refund integrity audit activity, overpaid GST and small business GST registration.
To assist clients who have been affected by natural disasters and COVID-19, the ATO has designed specialised pathways to prioritise GST objections where a positive financial outcome for the client is likely.
|
2017–18 no. |
2018–19 no. |
2019–20 no. |
2020–21 no. |
2021–22 no. |
|---|---|---|---|---|---|
Audit to objection rate (per thousand) |
76 |
52 |
95 |
56 |
11* |
Audit to audit-related objection (per thousand) |
- |
- |
62 |
37 |
9* |
Objection cases resolved (number) |
774 |
591 |
512 |
813 |
535 |
Allowed in full |
207 |
165 |
108 |
104 |
88 |
Allowed in part |
173 |
108 |
91 |
97 |
28 |
Disallowed |
178 |
121 |
125 |
405 |
172 |
Either withdrawn following initial contact, or invalid and unable to be altered to be treated as valid objections |
216 |
197 |
188 |
207 |
247 |
Objections which result in litigation (per thousand) |
65 |
108 |
117 |
49 |
88 |
GST litigation cases completed (number) |
59 |
45 |
52 |
52 |
63 |
Favourable |
6 |
6 |
11 |
6 |
12 |
Partly favourable |
1 |
1 |
- |
1 |
2 |
Unfavourable |
3 |
2 |
2 |
4 |
4 |
Conceded (whole or in part) |
5 |
18 |
22 |
9 |
6 |
Settled |
8 |
4 |
4 |
20 |
20 |
Withdrawn by taxpayer |
17 |
9 |
11 |
9 |
16 |
Dismissed by court or AAT |
16 |
4 |
2 |
3 |
3 |
Other |
3 |
1 |
- |
- |
- |
GST litigation
At 30 June 2022, there were 77 current Part IVC litigation cases, a 15% decrease from 30 June 2021. This continues the downward trend in the number of cases on hand and represents a 31% decrease in cases over the past 2 years. This can largely be attributed to a decrease in cases containing substantiation issues, namely cases dealing with evidentiary matters relating to the extent of taxable supplies and entitlement to input tax credits.
The number of cases settled this year by the Commissioner decreased to 32% of all finalised cases, compared to 37% in 2020–21. This reflects the ATO’s concerted effort to adopt alternative dispute resolution options where appropriate and ensure the right cases are being litigated.
The number of cases conceded in whole or in part by the Commissioner has declined, from 18% of all finalised cases in 2020–21, to 10% in 2021–22. This is due to an ongoing commitment to improve the quality of decisions.
Matter |
Issue and decision |
|---|---|
Commissioner of Taxation v Burswood Nominees Limited as trustee for the Burswood Property Trust [2021] FCAFC 151 |
On 20 August 2021, the Full Federal Court (FFC) allowed the Commissioner’s appeal in a unanimous decision. The FFC confirmed the Commissioner’s position that payments of commissions and rebates by the taxpayers to junket tour operators are a fee for service and should not be included in the total amounts wagered. On 13 May 2022, the High Court refused to grant special leave to the taxpayers in this case. |
WYPF v Commissioner of Taxation [2021] AATA 3050 |
This case sought to test the Commissioner’s view on the GST treatment of development leases in the ACT and also dealt with refund of excess GST issues. The Administrative Appeals Tribunal (AAT) handed down a partly favourable decision on 25 August 2021. The AAT confirmed the Commissioner’s view that the building works were not consideration for the applicant’s acquisition of the Crown leases. However, contrary to the Commissioner’s view, the AAT concluded that the excess GST that had been paid in relation to preparatory works had not been passed on by the taxpayer to purchasers, and that the taxpayer was entitled to a refund of the excess GST paid. |
Ian Mark Collins & Mieneke Mianno Collins ATF The Collins Retirement Fund and Commissioner of Taxation [2022] AATA 628 |
The AAT handed down a favourable decision on 4 April 2022. The decision is precedential and deals with important issues in the context of GST turnover and the sale of subdivided land. The AAT determined that the sales of the land the applicant caused to be subdivided were not supplies of capital assets and were to be included in the applicant’s turnover. The AAT found that the applicant was required to be registered for GST at the time the sales occurred and as such, the applicant was liable to GST on the sales. |
Landcom v Commissioner of Taxation [2022] FCA 510 |
On 9 May 2022, the Federal Court handed down an unfavourable decision. The Court found the Commissioner’s private ruling was a valid ruling under the TAA. The Court had jurisdiction to hear the matter even though the applicant was a state entity and the matter ruled on related to notional GST. The Court also found the margin scheme provisions applied separately to each individual freehold interest that was part of the supply. The Commissioner has appealed the margin scheme issue to the FFC but has not appealed the jurisdiction issue. |
Other significant case concluded
Three related Federal Court appeals against unfavourable private rulings in relation to a GST liability arising out of an agreement, known as an Indigenous Land Use Agreement (ILUA). Under the Native Title Act 1993, an ILUA is an agreement where native title holders consent to the doing of future acts which affect native title.
The applications related to the GST treatment of certain monetary and non-monetary benefits provided by the Commonwealth of Australia under the ILUAs. The Commissioner conceded these cases and now accepts that the consents granted under the ILUAs were not granted in the course or furtherance of an enterprise that was being carried on by each of the applicants.