A New Tax System (Goods and Services Tax) Act 1999

Chapter 4 - The special rules  

Part 4-7 - Special rules mainly about returns, payments and refunds  

Note:

The special rules in this Part mainly modify the operation of Part 2-7 , but they may affect other Parts of Chapter 2 in minor ways.

Division 165 - Anti-avoidance  

Subdivision 165-A - Application of this Division  

165-10   When does an entity get a GST benefit from a scheme?  

(1)    
An entity gets a GST benefit from a * scheme if:

(a) an amount that is payable by the entity under this Act apart from this Division is, or could reasonably be expected to be, smaller than it would be apart from the scheme or a part of the scheme; or

(b) an amount that is payable to the entity under this Act apart from this Division is, or could reasonably be expected to be, larger than it would be apart from the scheme or a part of the scheme; or

(c) all or part of an amount that is payable by the entity under this Act apart from this Division is, or could reasonably be expected to be, payable later than it would have been apart from the scheme or a part of the scheme; or

(d) all or part of an amount that is payable to the entity under this Act apart from this Division is, or could reasonably be expected to be, payable earlier than it would have been apart from the scheme or a part of the scheme; or

(e) each of the following applies:

(i) the entity is the *recipient of a *supply that is not *connected with the indirect tax zone;

(ii) apart from the scheme or a part of the scheme, the supply would be, or could reasonably be expected to be, connected with the indirect tax zone solely because of Subdivision 84-C ;

(iii) an amount that is payable, in relation to the supply, by another entity under this Act apart from this Division is, or could reasonably be expected to be, smaller than it would be apart from the scheme or a part of the scheme;

(iv) the amount by which that amount is smaller is not, or could not reasonably be expected to be, equal to the amount of any decrease in the amount of any input tax credit to which the recipient is entitled in relation to the acquisition of the thing supplied.

What is a scheme ?

(2)    
A scheme is:

(a) any arrangement, agreement, understanding, promise or undertaking:

(i) whether it is express or implied; and

(ii) whether or not it is, or is intended to be, enforceable by legal proceedings; or

(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.

GST benefit can arise even if no economic alternative

(3)    
An entity can get a * GST benefit from a * scheme even if the entity or entities that entered into or carried out the scheme, or a part of the scheme, could not have engaged economically in any activities:

(a) of the kind to which this Act applies; and

(b) that would produce an effect equivalent (except in terms of this Act) to the effect of the scheme or part of the scheme;

other than the activities involved in entering into or carrying out the scheme or part of the scheme.