Question 11
At question 11, you must disclose whether you have taken any material uncertain GST positions in a Business Activity Statement during the period the return covers.
You must answer either yes or no.
If you answer yes, you must provide a brief explanation of each position you have taken.
What is an uncertain GST position?
An 'uncertain GST position' is either:
- about as likely to be correct as incorrect, even if it is reasonably arguable
- is less likely to be correct than incorrect.
An 'uncertain GST position' specifically includes a position:
- that is contrary to an ATO public ruling or other ATO public advice and guidance
- that is contrary to a private ruling issued to you
- to which an ATO Taxpayer Alert applies
- that is moderate or high risk under an ATO Practical Compliance Guideline, such as PCG 2019/8: ATO compliance approach to GST apportionment of acquisitions that relate to certain financial supplies.
A 'GST position' would include a decision about the classification of supplies or acquisitions, for example:
- whether supplies are taxable, input-taxed or GST-free
- eligibility for input tax credits or reduced input tax credits on acquisitions.
Similar arrangements or transactions are treated as a single position when the facts used to determine the GST treatment are the same or similar and a common conclusion is reached on the GST treatment.
What is a material uncertain GST position for these purposes?
A material uncertain GST position for these purposes is one which, if the position is incorrect, would result in a shortfall for the period the return covers that exceeds your materiality threshold.
Your materiality threshold is:
- $500,000 for Top 100 taxpayers
- $250,000 for Top 1,000 taxpayers.
Resources to help you answer this question
You should consider the materiality of any uncertain GST positions that impact the activity statements in the period the return covers.
In responding, you should consider whether the entity has taken any material uncertain GST positions by:
- considering whether the entity is aware of any material uncertain positions taken through your interactions with us, through actions undertaken to implement our recommendations, or in relation to your compliance with new and existing GST public advice and guidance relevant to your business
- reviewing information escalated through your reporting chain for identification and escalation of significant transactions and material GST risks that arise in your business to your tax team
- relevant findings of any assurance and verification procedures that you undertake to ensure the correct reporting of your GST obligations
- outcomes of periodic GST controls testing undertaken to confirm the operational effectiveness of your GST control framework.
Example 1: 'No' at question 11
Sasha Insurance is a Top 100 taxpayer. Sasha Insurance has a robust GST control framework which aligns to the expectations in our GST governance, data testing and transaction testing guide.
Sasha Insurance documents the steps it has undertaken to consider whether it has a material uncertain GST position to disclose for the period the return covers.
The steps include:
- considering whether the entity is aware of any material uncertain GST positions from its interactions with us, from actions it has undertaken to implement our recommendations, or in relation to its compliance with new and existing GST public advice and guidance relevant to its business.
- reviewing information escalated in accordance with the documented reporting chain it uses for identification and escalation of significant transactions and material GST risks that arise in its business to the tax team
- reviewing any relevant findings of its periodic GST controls testing undertaken to confirm the operational effectiveness of its GST control framework, plus the findings of any other assurance and verification procedures it undertakes to ensure the correct reporting of its GST obligations when preparing, reviewing and lodging its activity statement every month.
These steps, which are aligned to its GST control framework, give Sasha Insurance confidence that if there were material uncertain GST positions in its activity statements for the period the return covers, these would have been identified.
Sasha Insurance is not aware of any material uncertain GST positions impacting its activity statements for the period the return covers. At question 11 in its Supplementary annual GST return 2025, it responds that it has no material uncertain GST positions.
If a GST shortfall is later identified which does relate to a material uncertain GST position taken in the year, which the entity was not aware of at the time of lodgment, we will not penalise Sasha Insurance for its disclosures on the Supplementary annual GST return, because it has answered in good faith and has objective evidence of the steps undertaken to support its response. Usual considerations around interest and penalties apply in relation to the shortfall.
End of exampleExample 2: 'Yes' at question 11
Yim-Finnigan Couriers is a Top 1,000 taxpayer that had a Combined Assurance Review finalised in 2023.
During 2024, Yim-Finnigan Couriers started paying an allowance for its drivers' meals. There is no requirement for its drivers to provide receipts for their meals and they are not expected to repay any of the amount if it isn't spent. For the 2024–25 financial year, Yim-Finnigan Couriers has claimed input tax credits of $362,000 in its activity statements.
This is a material uncertain GST position because it is contrary to our guidance on GST and employee reimbursements, and the materiality of the amounts claimed exceeds the relevant threshold.
When completing its Supplementary annual GST return for 2024–25, Yim-Finnigan Couriers discloses at question 11 that it had paid its truck drivers a meal allowance on which it had claimed input tax credits of $362,000 in the period the return covers.
Yim-Finnigan Couriers is required to disclose this as it is a material GST position that is contrary to ATO public advice and guidance. This is the case even if Yim-Finnigan Couriers intends to maintain the claim in its activity statements as it does not agree with our view of the application of the GST law to its circumstances.
End of exampleContinue to Section F, Question 12.
Return to Instructions to complete the Supplementary annual GST return 2025.