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Other changes relating to indirect taxes

See what other changes relate to indirect taxes.

Last updated 9 September 2024

Net amount

Amendments to the GST Act confirm that the definition of net amount in the GST Act includes LCT and WET in line with current practice and intention. There is now a single net amount definition that allows for the net amount to be worked out using different methods in differing circumstances – for example, for instalments or simplified accounting methods. These changes will have no effect on the way you lodge your activity statement and report amounts payable or refundable.

Generic assessment provisions

The assessment system for indirect tax laws introduces a new generic assessment framework to the TAA. While the general principles of the generic assessment provisions are largely adopted from the income tax self-assessment system, specific provisions have been inserted to reflect the unique nature of the indirect tax laws.

Initially, these generic assessment provisions won't apply to income tax laws. However, the assessment provisions will eventually also apply to other taxes that are already the subject of self-assessment. For this reason, the new assessment provisions in the TAA use generic terminology, structured to apply to other taxes as well.

Backdating GST registration

Our ability to backdate your GST registration is limited to 4 years from the date we decide to backdate your registration. This means that, in the absence of fraud or evasion, we can't backdate your GST registration beyond 4 years and you are taken to be not required to be registered prior to that date.

Prior to the start date of your GST registration, you aren't liable for GST on sales and you're not entitled to GST credits for any purchases.

In cases of fraud and evasion, we may still backdate your registration indefinitely.

For more information see Registering for GST.

Payments and refunds

The GST Act sets out your obligations to pay an amount, and our obligation to refund an amount. The Fuel Tax Act similarly provides for the payment and refund of net fuel amounts. For the assessment system, the relevant provisions in these Acts and Schedule 1 to the TAA reflects that you are only obliged to pay, and we are only obliged to refund, amounts which have been included in an assessment – so, reference is now made to assessed net amounts, assessed net fuel amounts and assessed amounts of indirect tax.

Similar to the existing provisions, which treat any overpayments of the net amount or net fuel amount as an amount that is payable to us at the time of the overpayment, the GST Act and Fuel Tax Act are amended to reflect this. Any amounts which become overpaid to you as a result of an amendment to your assessment, are treated as assessed net amounts or assessed net fuel amounts that become payable at the time the amounts are paid to you.

Correcting mistakes

Under the assessment system, you are still able to correct minor errors in prior tax periods, in the current tax period.

Where the error falls outside the time and correction limits that the Commissioner determines, you need to amend the relevant earlier assessment by requesting an amendment.

For more information see:

Objections

Under the assessment system, lodging your activity statement will result in an assessment that will be a reviewable taxation decision. You no longer have to ask for an assessment to lodge an objection.

Where you are dissatisfied with:

  • an assessment – you can lodge an objection within 4 years and one day from the issue of the notice of the assessment
  • an amended assessment – you can lodge an objection, either within 4 years of when the notice of the assessment is given to you, or 60 days after the relevant notice of amended assessment is given to you, whichever is later. However, an objection against an amended assessment is limited to the particular or particulars that have been amended.

You may also object to an indirect tax private ruling. However, where an assessment has been made for the same tax period to which the private ruling relates, then an objection can only be lodged against the assessment, not the private indirect tax ruling.

For more information see Object to an ATO decision.

Time limit on entitlement to credits

Your entitlement to a GST or fuel tax credit ceases if the credit is not taken into account in an assessment within the 4-year credit time limit. The 4-year credit time limit 4 years from the due date of the BAS for the tax period or fuel tax return period in which you could have first claimed the credit – setting aside any requirement to hold a tax invoice. You can claim the credit in any tax period but it must be included in an assessment that is made within the 4-year credit time limit. If you are neither registered nor required to be registered for GST, and you have not previously claimed a particular fuel tax credit entitlement, you must claim the fuel tax credit within 4 years from the day you acquired the fuel.

For more information see:

 

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