A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999 (177 of 1999)
Schedule 1 Indirect Tax Acts
Part 1 Amendment of the A New Tax System (Goods and Services Tax) Act 1999
74 After Division 60
Insert:
Division 63 - Non-profit sub-entities
63-1 What this Division is about
Some kinds of non-profit entities may choose to have some (or all) of their separately identifiable branches treated as separate entities for GST purposes.
Note: The parent entities then cease to be responsible, for GST purposes, for these branches. (By way of contrast, parent entities would remain responsible for their branches if they registered them under Division 54.)
63-5 Entities that may choose to apply this Division
(1) An entity may choose to apply this Division.
(2) However, the entity must be *registered and must be:
(a) a charitable institution, a trustee of a charitable fund or a *gift-deductible entity; or
(b) a non-profit body that is exempt from income tax under any of these provisions of the *ITAA 1997:
(i) section 50-5 (charity, education, science and religion);
(ii) section 50-10 (community service);
(iii) section 50-15 (employees and employers);
(iv) section 50-40 (primary and secondary resources, and tourism);
(v) item 9.1 or 9.2 of section 50-45 (sports, culture and recreation).
63-10 Period for which a choice has effect
(1) The choice has effect from the time the entity makes the choice.
(2) The choice ceases to have effect if:
(a) the entity revokes the choice; or
(b) the entity ceases to meet the requirements of subsection 63-5(2).
(3) However, the entity:
(a) cannot revoke the choice within 12 months after the day on which the entity made the choice; and
(b) cannot make a further choice within 12 months after the day on which the entity revoked a previous choice.
63-15 Consequences of choosing to apply this Division
(1) While the choice has effect, any branch of the entity is treated, for the purposes of the *GST law (other than sections 63-5 and 63-10 and this section), as an entity if that branch:
(a) maintains an independent system of accounting; and
(b) can be separately identified by reference to:
(i) the nature of the activities carried on through the branch; or
(ii) the location of the branch; and
(c) is referred to in the entity's records to the effect that it is to be treated as a separate entity for the purposes of the GST law.
(2) The branch's treatment as an entity ceases if:
(a) the choice ceases to have effect; or
(b) the branch ceases to meet the requirements of paragraphs (1)(a), (b) and (c).
However, if the branch is *registered, its treatment as an entity continues until its registration is cancelled.
(3) At all times during its treatment as an entity, the branch is a non-profit sub-entity .
63-20 Non-profit sub-entities may register
(1) A *non-profit sub-entity may apply to be *registered under section 23-10 even if it is not *carrying on an *enterprise and is not intending to carry on an enterprise.
(2) The Commissioner must *register the *non-profit sub-entity whether or not the Commissioner is satisfied that it is *carrying on an *enterprise or intending to carry on an enterprise.
(3) This section has effect despite section 23-10 (which is about who may be registered) and section 25-5 (which is about when the Commissioner must register an entity).
63-25 Registration turnover threshold for non-profit sub-entities
Regulations made for the purposes of paragraph 23-15(2)(b) may:
(a) provide that they apply only to *non-profit sub-entities, or only to other non-profit entities; or
(b) specify one amount for *non-profit sub-entities and a different amount for other non-profit entities.
63-30 When non-profit sub-entities must apply for cancellation of registration
(1) If a *non-profit sub-entity is *registered and it does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c), it must apply to the Commissioner in the *approved form for cancellation of its *registration. It must lodge the application within 21 days after the day on which it ceased to meet those requirements.
(2) Section 25-50 (which is about cancelling registration) does not apply to *non-profit sub-entities.
63-35 When the Commissioner must cancel registration of non-profit sub-entities
(1) The Commissioner must cancel *registration of a *non-profit sub-entity (even if it has not applied for cancellation of the registration) if the Commissioner is satisfied that the sub-entity does not meet the requirements of paragraphs 63-15(1)(a), (b) and (c).
Note: Cancelling registration under this subsection is a reviewable GST decision (see Division 7 of Part VI of the Taxation Administration Act 1953).
(2) The Commissioner must notify the sub-entity if the Commissioner decides to cancel its registration. The notice must specify the date of effect of the cancellation.
(3) Subsection 25-55(2) (which is about cancelling registration) does not apply to *non-profit sub-entities.
63-40 Effect on adjustments of becoming a non-profit sub-entity
(1) If a branch of an entity becomes a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the entity through the branch before it became a non-profit sub-entity:
(a) is taken to be an adjustment that the non-profit sub-entity has, as if the non-profit sub-entity had made the supply, acquisition or importation; and
(b) is not taken to be an adjustment that the entity has.
(2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch became a *non-profit sub-entity, that Division applies as if:
(a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the non-profit sub-entity acquired or imported it for a creditable purpose; and
(b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the non-profit sub-entity applied it for a creditable purpose.
63-45 Effect on adjustments of ceasing to be a non-profit sub-entity
(1) If a branch of an entity ceases to be a *non-profit sub-entity, any *adjustment arising afterwards in relation to a supply, acquisition or importation, made by the branch while it was a non-profit sub-entity, is taken to be an adjustment that the entity has, as if the entity had made the supply, acquisition or importation.
(2) For the purpose of applying subsection (1) to an adjustment under Division 129 relating to a thing acquired or imported before the branch ceased to be a *non-profit sub-entity, that Division applies as if:
(a) the extent to which the acquisition or importation of the thing was for a *creditable purpose were the extent to which the entity acquired or imported it for a creditable purpose; and
(b) the extent to which the thing has been *applied for a creditable purpose since its acquisition or importation were the extent to which the entity applied it for a creditable purpose.