JHKW v FC of T

Members:
D Mitchell M

Tribunal:
Administrative Appeals Tribunal, Brisbane

MEDIA NEUTRAL CITATION: [2022] AATA 2875

Decision date: 5 September 2022

D Mitchell (Member)

INTRODUCTION

1. JHKW (the Applicant), as a partner of a partnership they formed with their spouse (the Partnership) is seeking review of an objection decision of the Commissioner of Taxation (the Respondent) dated 8 September 2021.^[1] Exhibit 1, T Documents, T2, pages 9-12, Notice of Objection Decision and Reasons for Decision.

2. The reviewable objection decision disallowed the Applicant's objection to the amended assessments of net amount for the quarterly tax periods between 1 July 2012 and 31 March 2017.^[2] Exhibit 1, T Documents, T9, pages 117-122, Objection Application. The amended assessments reflected the Respondent's decision that the Partnership was not entitled to input tax credits (ITCs) totalling $16,361.00 for the quarterly tax periods between 1 July 2012 and 31 March 2017 on the basis that the business activity statements (BAS) for those tax periods were lodged outside of the four year time limit.^[3] Exhibit 1, T Documents, T2, pages 10-12, Reasons for Decision.

BACKGROUND

3. The Applicant is a partner of the Partnership.^[4] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 5.

4. The Partnership was registered for an ABN and for GST from 1 July 2000.^[5] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 6. Initially the Partnership was registered for GST on a monthly basis however changed to quarterly reporting from 1 April 2001.^[6] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 7.

5. The Partnership was issued a number of letters in relation to the lodgement of its BAS for the periods in question commencing from July 2012 up to the time of lodgement, initially to its tax agent and then to the Applicant.^[7] Exhibit 2, Supplementary T Documents, ST4-ST7, pages 7-30, Respondent’s Telephone note and Seibel Extracts.

6. An example of a lodgement reminder for overdue activity statements sent to the Applicant, dated 15 March 2013, outlined that despite previous requests to lodge overdue activity statements the Respondent's records showed that they had not been received for the nominated periods. The letter outlined that the Partnership was required to complete and lodge its overdue activity statements immediately and pay any amount owing. The letter advised that it is an offence not to lodge an activity statement by the due date, that penalties for failing to lodge on time may apply to each document not lodged by the due dates, and that any outstanding balances will incur interest.^[8] Exhibit 2, Supplementary T Documents, ST1, pages 1-2, Letter to the Applicant regarding overdue lodgement of activity statements.

7. On 12 December 2014, the Applicant called the Respondent regarding the Partnership's outstanding lodgements. The Respondent's file notes indicate that the Applicant was provided with the full failure to lodge warnings and made a commitment to lodge by 20 February 2015.^[9] Exhibit 2, Supplementary T Documents, ST5, page 13, Respondent’s Seibel Extracts and ST6 page 23, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A. A lodgement agreement was emailed to the Applicant by the Respondent following this call. The email contained the subject line "Your Lodgement Agreement" and relevantly provided:^[10] Exhibit 2, Supplementary T Documents, ST2, pages 3-4, Email to Applicant regarding lodgement agreement.

During our discussion you agreed to lodge the following [relevantly the quarterly BAS between 1 January 2012 and 30 September 2014

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were listed] by 20 February 2015. This is not a deferral date, penalties and interest may apply on late lodgements.

……

Your next steps

- Lodge all the listed forms by the above date

- Ensure that all future forms are lodged by their due dates

You should be aware that further action may be taken if the listed forms are not lodged by the above date.

8. On 12 February 2015, the Applicant contacted the Respondent regarding the Partnerships outstanding lodgement obligations. The Respondent's file notes indicate that the Applicant was provided with the full failure to lodge warnings and made a commitment to lodge by 30 June 2015.^[11] Exhibit 2, Supplementary T Documents, ST5, page 13, Respondent’s Seibel Extracts and ST6 page 23, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A. Following that call an email was sent by the Respondent to the Applicant which was in the same form as that sent on 12 December 2014.^[12] Exhibit 2, Supplementary T Documents, ST3, pages 5-6, Email to Applicant regarding lodgement agreement.

9. The Respondent's file notes dated 27 June 2015 provided:^[13] Exhibit 2, Supplementary T Documents, ST5, page 12, Respondent’s Seibel Extracts and ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.

Client cited work, study and renovations as reasons for Suspension. Suspension refused as these are not considered extenuating circumstances. Provided client details on how to access prior years returns for individuals and partnership.

10. On 23 May 2016, the Partnership's ABN was cancelled as the ABR Registrar was satisfied that the Partnership was no longer carrying on an enterprise due to its non lodgement of income tax returns and as such no business income being declared.^[14] Exhibit 2, Supplementary T Documents, ST5, page 10, Respondent’s Seibel Extracts,

11. On 11 July 2016, the Applicant requested that the Partnership be re-registered for GST and that registration be backdated effective from 1 January 2012 because it had business activities during that time and needed to claim GST credits.^[15] Exhibit 2, Supplementary T Documents, ST5, page 9, Respondent’s Seibel Extracts and ST6 page 25, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A. On 12 July 2016, the Respondent contacted the Applicant, noting the following summary of their conversation:^[16] Exhibit 2, Supplementary T Documents, ST4, pages 7-8, Telephone note; ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.

[They] needs to lodge all of her outstanding activity statements. If the BAS for the March 2012 and June 2012 tax periods will be refund amounts, the time limit does not apply to the refund because they have given us notice under section 105-55 as stated above. As such there is no need to backdate GST registration effective from 1/1/2022. [They] understood.

I gave [them] the activity reference number [redacted] and my contact details if [they] need to speak to me.

12. The Respondent's file note dated 30 January 2019 indicates that the Applicant updated their postal address and provided a commitment to lodge all outstanding BAS and income tax returns by 28 February 2019 and that the full failure to lodge warnings were provided.^[17] Exhibit 2, Supplementary T Documents, ST6 page 25, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.

13. On 26 March 2021, the Applicant contacted the Respondent in relation to the Partnerships outstanding lodgements and advised that they would contact their accountant and lodge those outstanding lodgements within the following 2-3 weeks.^[18] Exhibit 2, Supplementary T Documents, ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.

14. On 21 June 2021, the Applicant lodged BAS for the quarterly tax periods between 1 July 2012 and 31 March 2017 claiming ITCs totalling $16,361.00.

15. That same day the Respondent's system automatically reversed the ITCs claimed by the Partnership on the basis they were claimed outside of the four-year-time-limit within which ITCs can be claimed.^[19] Exhibit 1, T Documents, T4, pages 51-88, BAS initiated by the Respondent for the quarterly periods between 1 July 2012 to 31 March 2017 and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, page 5, paragraph 14.

16. On 25 June 2021, the Respondent issued the Applicant with amended assessments of net amount.^[20] Exhibit 1, T Documents, T6, pages 90-109, Notices of amended assessment of net amount for the quarterly periods between 1 July 2014 and 31 March 2017. No refund of ITCs was paid to the Applicant for the quarterly tax periods between 1 July 2012 and 31 March 2017 reflecting that the ITCs claimed by the Partnership had been disallowed.^[21] Exhibit 1, T Documents, T8, pages 111-116, Activity Statement Lodgement History.

17. On 30 July 2021, the Applicant lodged an objection.^[22] Exhibit 1, T Documents, T9, pages 117-122, Objection Application. The Applicant provided the following in relation to why they believed the decision was incorrect:^[23] Exhibit 1, T Documents, T9, page 120, Objection Application.

The total value of claimed GST refunds for the above period is $16,361.00.

I appeal the decision based on circumstances over the past years which resulted in not lodging these on time.

[Redacted - the Applicant provided an outline of those circumstances]

I was so relieved when we had everything submitted and up to date. I am very particular with my records and wanted to ensure it was all exactly correct before

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sending to my accountant, who then submitted in a matter of a few weeks of me getting the information to her.

The BAS returns which have been amended by the ATO amount to $16,361.00.

This was such a shock to me when I found this out. I felt so sick. We really need these funds, and while I now understand the 4 years, I absolutely had no idea of this before my phone call trying to work out what the Debits were in the portal. The lady was very helpful and explained it all to me. ……

18. On 2 August 2021, the Respondent issued the Applicant with notices of amended assessment of net amounts for the quarterly tax periods between 1 July 2012 and 31 March 2017.^[24] Exhibit 1, T Documents, T10, pages 123-160, Notices of amended assessment of net amount for the quarterly periods between 1 July 2012 and 31 March 2017.

19. On 8 September 2021, the Respondent disallowed the Applicant's objection.^[25] Exhibit 1, T Documents, T2, pages 9-12, Objection Decision and Reasons for Decision.

20. The BAS lodgement history of the Partnership for the quarterly tax periods between 1 July 2012 and 31 March 2017, as provided by the Respondent was as follows:^[26] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, pages 2-5, paragraph 8.

Quarterly Period Ended	Lodgement Due Date	Date Lodged	Time between Due Date and Lodgement
30 September 2012	26 November 2012 *later extended to 30 June 2015	21 June 2021	8 years, 6 months, 26 days *5 years, 11 months, 22 days
31 December 2012	28 February 2013 *later extended to 30 June 2015	21 June 2021	8 years, 3 months, 24 days *5 years, 11 months, 22 days
31 March 2013	27 May 2013 *later extended to 30 June 2015	21 June 2021	8 years, 25 days *5 years, 11 months, 22 days
30 June 2013	26 August 2013 *later extended to 30 June 2015	21 June 2021	7 years, 9 months, 26 days *5 years, 11 months, 22 days
30 September 2013	25 November 2013 *later extended to 30 June 2015	21 June 2021	7 years, 6 months, 27 days *5 years, 11 months, 22 days
31 December 2013	28 February 2014 *later extended to 30 June 2015	21 June 2021	7 years, 3 months, 24 days *5 years, 11 months, 22 days
31 March 2014	26 May 2014 *later extended to 30 June 2015	21 June 2021	7 years, 26 days *5 years, 11 months, 22 days
30 June 2014	28 July 2014 *later extended to 30 June 2015	21 June 2021	6 years, 10 months, 24 days *5 years, 11 months, 22 days
30 September 2014	25 November 2014 *later extended to 30 June 2015	21 June 2021	6 years, 6 months, 27 days *5 years, 11 months, 22 days
31 December 2014	3 March 2015	21 June 2021	6 years, 3 months, 18 days ATC 10693
31 March 2015	26 May 2015	21 June 2021	6 years, 26 days
30 June 2015	25 August 2015	21 June 2021	5 years, 9 months, 27 days
30 September 2015	25 November 2015	21 June 2021	5 years, [6] months, 2[7] days
31 December 2015	29 February 2016	21 June 2021	5 years, 3 months, 23 days
31 March 2016	28 April 2016	21 June 2021	5 years, 1 month, 24 days
30 June 2016	25 August 2016	21 June 2021	4 years, 9 months, 27 days
30 September 2016	25 November 2016	21 June 2021	4 years, 6 months, 27 days
31 December 2016	28 February 2017	21 June 2021	4 years, 3 months, 24 days
31 March 2017	26 May 2017	21 June 2021	4 years, 26 days

21. On 8 November 2021, the Applicant made an application to this Tribunal for review of the objection decision.^[27] Exhibit 1, T Documents, T1, pages 1-12, Application for review of decision.

22. On 14 January 2022, the Applicant provided a Statement of Facts, Issues and Contentions submitting that:^[28] Exhibit 4, Applicant’s Statement of Facts, Issues and Contentions, pages 1-2, paragraphs 5-12.

…..
5. The Commissioner, by various communications of his officers, advised that the Applicant was allowed additional time to file the relevant BAS having regard to the difficulties that the Applicant was experiencing.
6. The effect of the representations and communications made by officers of the Respondent was that, for the purposes of s31(b) of the A New Tax System (Goods and Services Tax) Act 1999 ('GST Act') the due date for filing each BAS was extended beyond the Nominal Due Date.
7. By letter dated 8 September 2021 addressed to the Applicant the Respondent advised that it had made a decision to disallow the Applicant's objection filed on 30 July 2021 against the Respondent's earlier decision not to pay the excess input tax credits to the Partnership for the relevant period.
8. The basis on which the Respondent disallowed the Applicant's Objection is set out in paragraphs 3 - 9 of the Respondent's Reason for Decision.
9. The primary ground relied upon by the Respondent is that the Partnership was out of time to claim the input tax credits under s93-5 of the GST Act.
10. In particular the Respondent asserts that the Applicant ceased to be entitled to input tax credits for the relevant period because the amount was not claimed by the Partnership:

'during the period of four years after the day on which you were required to give to the Commissioner a GST return for the tax period to which the input tax credit would be attributable' (highlighting is contained in the letter)
11. That assertion assumed that the due date for the relevant BAS was the Nominal Due Date in each case.
12. However, because of the communications and representations referred to in paragraph 5 of this Statement of Facts, Issues and Contentions, the Commissioner had extended the due date for each BAS under s31.8(b) of the Act and accordingly the Applicant was not out of time to receive the input tax credits for the relevant period.

23.

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In a witness statement dated 14 January 2022, the Applicant outlined their circumstances throughout the relevant period and provided:^[29] Exhibit 5, Witness Statement of the Applicant, page 2, paragraphs 6-10.

6. On a number of occasions during the period 2013 - 2017 I received letters from the ATO asking for me to contact them to discuss the delays in filing the Partnership Business Activity Statements
7. On each occasion I called the ATO, I was placed on hold to allow the relevant officer to check the previous notes on our file.
8. During each of those calls I explained the various personal and business circumstances that had lead to the delays in filing the relevant Business Activity Statements and on each occasion I was advised that in the circumstances that the ATO would allow me further time to get the Statements filed because in any event the net financial result from each Statement was going to result in the ATO paying money back to me as a refund of the input tax credits claimed on expenses incurred in operating the vineyard.
9. I was not advised during any of those various discussions of any 4 year time limit in claiming input tax credits.
10. I understood from my discussions that the ATO were allowing me additional time to file the Business Activity Statements for each relevant period.

24. On 28 March 2022, the Respondent provided a Statement of Issues, Facts and Contentions submitting that:^[30] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, pages 7-8, paragraphs 23-30.

23. The Commissioner granted an extension of time within the meaning of paragraph 31-.8(1)(b) of the GST Act in respect of the quarterly periods between 1 July 2012 and 30 September 2014 until 30 June 2015. However, the Applicant did not lodge these BAS on or before that date.
24. The Commissioner contends the Applicant has not established that the Commissioner allowed a "further period" to give the GST returns within the meaning of paragraph 38-1(1)(b) of the GST Act for the quarterly periods from 1 July 2012 to 30 September 2014 but for that referred to in paragraph 24.
25. The Commissioner further contends the Applicant has not established that the Commissioner allowed a "further period" to give the GST returns within the meaning of paragraph 38-1(1)(b) of the GST Act for the quarterly periods from 1 October 2014 to 31 March 2017 at any time.
26. Furthermore, unless and until the Commissioner allows a "further period" to give a GST return within the meaning of paragraph 38-1(1)(b) of the GST Act, then the GST return must be given within the time provided by paragraph 38-1(1)(a) of the GST Act. If the Commissioner does not allow a "further period" prior to the expiration of the four-year period under section 93-5 calculated by reference to paragraph 38-1(1)(a) of the GST Act, then the time limit within the meaning of section 93-5 of the GST Act is calculated by reference to the due day in paragraph 38-1(1)(a) of the GST Act.
27. The Commissioner contends that if input tax credits have not been taken into account in an assessment within the time period specified in section 93-5, then entitlement to those credits is lost and cannot be resurrected.
…..
29. Even if the Applicant were to succeed in relation to issue one, it does not follow that the Commissioner's decision to disallow input tax credits should be set aside. It will still be necessary for the Applicant to establish the assessments are excessive or otherwise incorrect and what the assessments should be. To this end, the Applicant would need to provide tax invoices and other evidence confirming their entitlement to input tax credits.
30. The Commissioner contends the Applicant is not entitled to the ITCs as it has not satisfactorily discharged its burden of proof in seeking to establish that:
- (a) The Partnership was conducting an enterprise as defined in s 9-20 of the GST Act at the relevant times and therefore eligible to be registered for GST; and
  
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- (b) The Partnership was entitled to input tax credits for the purposes of Division 11 of the GST Act; and
- (c) The input tax credits claimed by the Partnership have been correctly attributed under Division 29 of the GST Act.

25. In a supplementary statement received on 3 March 2022, the Applicant provided:^[31] Exhibit 6, Supplementary Witness Statement of the Applicant, pages 2-3, paragraphs 7-10.

7. Each time I called the ATO officer put me on hold and said that they needed time to access my file to check on the current status.
8. Based on those discussions I understood that the ATO were keeping notes of each conversation and therefore I did not keep any contemporaneous notes of those numerous telephone calls.
9. So, without being in a position to recall each specific conversation, I can say that the consistent theme of the ATO position was to the effect that they understood the various personal circumstances ( as detailed in my Original Statement)that lead to the significant delays in the BAS lodgements, and that it would be an issue requiring the application of interest and penalty if there were net funds due to the ATO, but as we were due a refund the delay was only costing us money and the ATO were relaxed as to pressing for lodgement.
10. I took this to mean that the ATO were allowing us additional time to file the relevant BAS.

26. A Hearing was held by videoconference on 16 August 2022. At Hearing the Applicant was self-represented and gave evidence under affirmation.

THE LAW

27. A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) provides that an entity carrying on an enterprise will generally be liable to pay GST on taxable supplies ^[32] See section 9-5 of the GST Act. and will be entitled to input tax credits on creditable acquisitions.^[33] See sections 11-5, 11-20 and 11-25 of the GST Act. Amounts of GST and amounts of input tax credits are offset against each other to produce a net amount for a tax period.^[34] Sections 7-5 and 17-5 of the GST Act.

28. Entitlement to ITCs for creditable acquisitions cease unless they are included in an entity's assessed net amounts within a limited period, generally 4 years.^[35] Section 93-1 of the GST Act.

29. Section 93-5 of the GST Act provides that there is a time limit on entitlements to input tax credits and sets out that:

(1) You cease to be entitled to an input tax credit for a *creditable acquisition to the extent that the input tax credit has not been taken into account, in an *assessment of a *net amount of yours, during the period of 4 years after the day on which you were required to give to the Commissioner a *GST return for the tax period to which the input tax credit would be attributable under subsection 29-10(1) or (2).

Note: Section 93-10 sets out circumstances in which your entitlement to the input tax credit does not cease under this section.
(2) This section has effect despite section 11-20 (which is about entitlement to input tax credits).

Note: You must hold a valid tax invoice relating to a creditable acquisition to be entitled to have an input tax credit for that acquisition taken into account in working out your assessed net amount for a tax period: see subsection 29-10(3).

30. There are a number of exceptions set out in section 93-10 of the GST Act to the application of section 93-5(1) , however, none of the exceptions applied in the Applicant's case.

31. Section 31-8 of the GST Act sets out when GST returns, where quarterly tax periods apply, must be given. Section 31-8 of the GST Act provides:

(1) If a tax period applying to you is a *quarterly tax period, you must give your *GST return for the tax period to the Commissioner:

(a) as provided in the following table; or

(b) within such further period as the Commissioner allows.

*When quarterly GST returns must be given*
*Item*	*If this day falls within the quarterly tax period …*	*Give the GST return to the Commissioner on or before this day:*
1	1 September	the following 28 October
2	1 December	the following 28 February
3	1 March	the following 28 April
4	1 June	the following 28 July

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(2) A tax period is a quarterly tax period if:
- (a) it is a period of 3 months; or
- (b) it would be a period of 3 months but for the application of section 27-30 or 27-35.

32. As such an entity will no longer be entitled to an ITC if it has not been taken into account in an assessment during the period of four years commencing the day after the entity was required to lodge a GST return for the tax period to which the ITC would be attributable under sections 29-10(1) and (2) of the GST Act.

33. Where a taxpayer is dissatisfied with a reviewable GST decision, they may object against it in accordance with the requirements set out in Part IVC of the Tax Administration Act (Cth) 1953 (the TAA).^[36] Section 110-50 of the TAA 1953. The Respondent must decide whether to allow, wholly or in part; or disallow, the taxpayer's objection.^[37] Section 14ZY of the TAA 1953.

34. A taxpayer dissatisfied with the Respondent's objection decision may apply to the Tribunal for a review of the decision or appeal to the Federal Court against it.^[38] Section 14ZZ of the TAA 1953.

35. Section 14ZZK(b)(i) of the TAA provides that on application for review of a reviewable objection decision concerning an assessment, the Applicant has the burden of proving that the assessment is excessive or otherwise incorrect and what the assessment should have been.

36. As such, to be successful in this matter the onus falls on the Applicant to prove that the amended assessments of net amounts are excessive or otherwise incorrect and what the assessment should have been in relation to the Partnership BAS for the quarterly tax periods between 1 July 2012 and 31 March 2017.

ISSUES

37. The issue before the Tribunal is whether or not the Applicant has discharged their onus to prove that the amended assessments made by the Respondent in relation to the Partnerships claimed ITC for the quarterly tax periods between 1 July 2012 and 31 March 2017 as lodged on 21 June 2021 are excessive or otherwise incorrect.

38. In considering that issue the Tribunal must determine whether the Partnership was entitled to the ITCs claimed in those BAS.

39. Given the facts of this matter, the primary question to be considered by the Tribunal is whether or not the Partnership's entitlement to the ITCs claimed in the BAS lodged on 21 June 2021 for the quarterly tax periods between 1 July 2012 and 31 March 2017 has ceased due to the operation of the 4 year time limit prescribed by section 93-5 of the GST Act.

40. Should the Tribunal find that the Partnership's entitlement to the claimed ITCs had not ceased, further consideration of whether the Applicant had otherwise established that the assessments for the period in question are excessive or otherwise incorrect and what they should have been would be required. In such circumstances, based on the evidence before it, the Tribunal would consider whether it was appropriate to remit that issue back to the Respondent for reconsideration.^[39] Potentially pursuant to section 43(1)(c)(ii) or section 43(1)(c)(i) in conjunction with section 42D of the Administrative Appeals Tribunal Act 1975 (Cth).

APPLICANT'S EVIDENCE AND CONTENTIONS

41. At Hearing the Applicant gave evidence under affirmation. The Tribunal considers they were open and honest in their evidence which was consistent with their filed statements as outlined above. The Applicant told the Tribunal that:

• They had understood that they had been granted extensions of time to submit the BAS because when they called the ATO they were informed they could be charged interest and be fined to which they responded they understood that however they knew that the Partnership would get refunds so there would be no interest payable.

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• They did not record dates or details of telephone calls with the ATO as they thought calling was enough.
• They were not aware that they required written extensions of time or deferrals to lodge.
• They thought they were given verbal extensions over the phone. They almost always called the ATO after receiving a letter and thought that as long as they stayed in communication with the ATO and they knew that they were working on the lodgements there would be no problem and that the ATO was not pressing the lodgements.
• They thought that by not lodging they were only disadvantaging themselves as they were owed money, they did not owe money to the ATO.
• The break in correspondence with the ATO between 2016 and 2019 was due to an issue with the address recorded and them having not received any letters.
• At no point did the ATO advise them of a 4 year timeframe. They knew nothing about it until they lodged the BAS.
• They were, during the period in question, working in finance positions and completed a Bachelor of Commerce in Accounting.
• They agreed that they had a better understanding of bookkeeping and taxation lodgement requirements than the average taxpayer however said that they had not read the whole GST Act.
• They were not aware that the Partnership's ABN was cancelled by decision of the Registrar. They thought it was cancelled in error.
• They do not recall the specific conversations with the ATO.
• They had never sought advice in relation to the Partnership BAS, they had always completed them and lodged them, themselves.
• They do not dispute that the Partnership BAS were not lodged within the statutory time frame.
• They agreed that the letters they referred to receiving were similar to the letter that was issued on 12 December 2014 (as outlined above) and that it was after receiving such letters that they telephoned the ATO.
• When put to them that the letters sent to the Partnership by the Respondent were pressing that the BAS were required to be lodged, that, that was why they kept in contact with the ATO.
• They do not recall receiving the emails dated 12 December 2014 and 12 February 2015, however, do not dispute that they did.
• When asked if they considered those emails to be providing an extension of time to lodge the BAS, that, they did because interest and penalties apply when money is owing and because they knew that the Partnership was claiming money back, they did not consider there to be an issue.
• When asked whether they say that they were provided with an explicit deferral date, that they did not record any details of the conversations but just thought it was going to be alright.

42. The Applicant's main contention is that they were not made aware of the 4 year time limit and believed that they had been provided with an extension to lodge the outstanding BAS. This belief arose because the Applicant had been keeping in contact with the ATO, and they felt that the ATO were not pressing the lodgement of the outstanding BAS. The Applicant further sought that their personal circumstances throughout the period in question be taken into consideration.

RESPONDENT'S CONTENTIONS

43. At Hearing the Respondent contended that they do not consider that they had ever provided an extension of time or deferment to the Applicant to lodge the Partnership's BAS for the quarterly periods between 1 July 2012 and 30 September 2014. The Respondent did, however, acknowledge that the Applicant may have had an argument that such an extension of time or deferment was provided to 30 June 2015 based on the subject title of the emails dated 12 December 2014 and 12 February 2015. The Respondent contended that as shown in the table at paragraph 20 above, that even if such an extension or deferment had been provided, which is not conceded, it would not

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change the fact that those BAS were still lodged more than 4 years after 30 June 2015.

44. The Respondent contended that the Applicant's submission that the Partnership was granted a perpetual extension of time to lodge the BAS in question was contrary to its records (which indicate that lodgement was continually pressed), was contrary to the operation of section 93-5 of the GST Act and was contrary to the policy objectives of having a prescribed time frame as set out in section 31-8 of the GST Act.

45. The Respondent contended that the Applicant's submission that they were unaware of the 4 year time limit is irrelevant to the consequence of section 93-5 of the GST Act in circumstances where BAS are lodged more than 4 years past the statutory lodgement date and an extension of that lodgement date has not been granted prior to the expiry of that 4 year period. The Respondent contended that there is no discretion in the GST Act to revive an entitlement to an ITC where that entitlement had ceased to exist.

46. The Respondent referred the Tribunal to the decisions of the Tribunal in
Rosebridge Nominees Pty Ltd (In Liq) v Federal Commissioner of Taxation [2019] AATA 426, 109 ATR 988,
SE Sedgwick & YE Sedwick v Federal Commissioner of Taxation [2015] AATA 690, 97 ATR 696 and
Trustee for the SBM Trust v Federal Commissioner of Taxation [2015] AATA 174, 101 ATR 191 in support of that contention.

47. The Respondent further contended that, from 2012, GST obligations were administered through a self-assessment system and that taxpayers were required to understand and meet their GST requirements. As such, the Respondent contended that there was no positive obligation on its officers to advise the Applicant about the requirement to lodge a BAS within 4 years of its due date to ensure that entitlement to ITCs were not lost.

CONSIDERATION

48. The primary issue for the Tribunal to consider is whether the Partnership was entitled to the ITCs claimed for the quarterly tax periods between 1 July 2012 and 31 March 2017.

49. The GST Act is clear in that the entitlement to an ITC ceases if it has not been included in a BAS during the period of 4 years after the day on which the BAS was required to be given to the Respondent.

50. Senior Member Lazanas, with whom this Tribunal agrees, addressed the clarity of the operation of section 93-5(1) of the GST Act in
Rosebridge Nominees Pty Ltd (In Liq) v Federal Commissioner of Taxation [2019] AATA 426, 109 ATR 988 at [998-44], as follows:

With respect to tax periods following 1 July 2012, s 93-5(1) of the GST Act similarly makes it abundantly clear that the entitlement to the ITCs is extinguished in certain circumstances. The use of the word "ceases" is unequivocal in describing the end of the entitlement to claim ITCs, unless certain events have occurred. This conclusion is consistent with the following decisions describing the operation of Division 93: Re Trustee for the SBM Trust and FCT
(2015) 101 ATR 191 and Re SE Sedgwick and YE Sedgwick and FCT
(2015) 97 ATR 696.

51. The day on which a BAS is required to be given to the Respondent is set out in the GST Act or alternatively is a day otherwise allowed by the Respondent.

52. In the present application the Applicant lodged the Partnership's BAS for the quarterly tax periods between 1 July 2012 and 31 March 2017 on 21 June 2021. As set out in the table at paragraph 20 above, each BAS was lodged on a day that exceeded 4 years after the relevant BAS was required to be lodged.

53. Based on the evidence before it, the Tribunal considers that the Applicant was not provided with a further period in which to lodge the Partnership's BAS by the Respondent. As such the period prescribed in section 31-8(1)(a) applies to set the day on which the BAS were required to be lodged with or given to the Respondent.

54. The Tribunal notes that the Respondent made reference to an argument that may exist in relation to further period to lodge the BAS for the quarterly periods between 1 July 2012 and 30 September 2014, however the Tribunal does not consider any such extension of the time period to have been provided. The Respondent's file notes and

ATC 10699

correspondence with the Applicant clearly sets out that at all times they were warned about the consequences of failure to lodge and in the Tribunal's view, do not indicate that any such extension of the lodgement period was provided to the Applicant. Even if the Tribunal is incorrect in this finding it notes that the affected BAS were lodged more than 4 years after 30 June 2015, being the potential further period to lodge.

55. The Tribunal does not accept the Applicant's submissions that their keeping in contact with the Respondent throughout the period in question meant that they had been granted continuous extensions to the period in which they were required to give the BAS in question to the Respondent. There is no evidence before the Tribunal to suggest that such an extension of time was requested and the Applicant's evidence was that they did not realise they had to make such a request.

56. The Tribunal considers the idea that a perpetual extension of the period within which the Applicant was required to give the BAS in question to the Respondent is nonsensical and contradictory to the GST Act.

57. The operation of section 93-5 of the GST means that if an extension of time to lodge a BAS has not been granted prior to the expiry of 4 years after the day on which it was required to be given to the Respondent, the entitlement to ITCs immediately ceases. Consequently, the provision of further time within which to give a BAS to the Respondent cannot be provided retrospectively outside of the relevant 4 year period.

58. There is no discretion to get around the operation of section 93-5 of the GST Act. The operation of Division 93 of the GST Act in circumstances such as the Applicant's is clear and unambiguous and leave no room for the operation of a discretion.^[40] Trustee for the SBM Trust v Federal Commissioner of Taxation [2015] AATA 174 , 101 ATR 191 .

59. As such, as the Applicant lodged the Partnership's BAS for the quarterly tax periods between 1 July 2012 and 31 March 2017 on 21 June 2021, being well outside 4 years after they were required to have been given to the Respondent, there is no entitlement to claim the associated ITCs for those periods.

60. The Tribunal appreciates the Applicant's logic in relation to thinking that not lodging the Partnership's BAS was not an immediate priority as they were in a credit position, meaning that failure to lodge did not impact on the collection of revenue but only upon their access to the ITCs that were sought to be claimed. However, the GST Act is specifically drafted to encourage the lodgement of BAS, and hence claiming of ITCs, within a certain time period.

61. While the Applicant gave evidence that they were not aware of the 4 year lodgement requirements for BAS in order to be eligible to ITCs and that they were not told in any of their contacts during the period in question by the officers of the Respondent they spoke to, there is no such requirement upon the Respondent to provide such advice to taxpayers. Information in relation to taxation obligations is made available by the Respondent on its webpage and taxpayers are expected in a self-assessment tax system to inform themselves of their relevant obligations. In this case the Tribunal considers that based on the Applicant's evidence, given their professional experience and education they are better placed to be aware of their obligations or know where to find them, then the average taxpayer.

62. The Tribunal acknowledges the personal circumstances of the Applicant throughout the period in question in this matter and that they had disclosed those matters to the Respondent. Unfortunately, however, as set out above there is no discretion in the GST Act to retrospectively consider the Applicant's circumstances once section 93-5 of the GST Act comes into operation.

63. As the Tribunal has found that the Partnership's entitlement to the claimed input tax credits claimed for the quarterly periods of 1 July 2012 to 31 March 2017 had ceased by the time the associated BAS were given to the Respondent by the Applicant on 21 June 2021, there is no need to consider whether the Partnership was entitled to the ITCS claimed during that period.

CONCLUSION

64. There is no discretion available to allow the Respondent or the Tribunal to grant the Applicant, on behalf of the Partnership, an extension of time to lodge a BAS after 4 years has expired from the date on which the BAS was required to be given to the Respondent.

65.

ATC 10700

Based on the evidence before it, the Tribunal finds that the Partnership was not granted extensions of time within which to provide its BAS for the quarterly tax periods between 1 July 2012 and 31 March 2017. Consequently, the Tribunal finds that each of the BAS lodged by the Application in relation to the Partnership for the quarterly tax periods between 1 July 2012 and 31 March 2017 were given to the Respondent on a day that exceeded 4 years after they were required to have been given.

66. As such the Tribunal finds that the Applicant has not discharged their onus to prove that the amended assessments of net amount made by the Respondent in relation to the Partnership's claimed ITCs for the quarterly tax periods between 1 July 2012 and 31 March 2017 as lodged on 21 June 2021 were excessive or otherwise incorrect.

67. Accordingly, the decision under review is affirmed.

Footnotes

^[1] Exhibit 1, T Documents, T2, pages 9-12, Notice of Objection Decision and Reasons for Decision.
^[2] Exhibit 1, T Documents, T9, pages 117-122, Objection Application.
^[3] Exhibit 1, T Documents, T2, pages 10-12, Reasons for Decision.
^[4] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 5.
^[5] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 6.
^[6] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions; page 2, paragraph 7.
^[7] Exhibit 2, Supplementary T Documents, ST4-ST7, pages 7-30, Respondent’s Telephone note and Seibel Extracts.
^[8] Exhibit 2, Supplementary T Documents, ST1, pages 1-2, Letter to the Applicant regarding overdue lodgement of activity statements.
^[9] Exhibit 2, Supplementary T Documents, ST5, page 13, Respondent’s Seibel Extracts and ST6 page 23, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[10] Exhibit 2, Supplementary T Documents, ST2, pages 3-4, Email to Applicant regarding lodgement agreement.
^[11] Exhibit 2, Supplementary T Documents, ST5, page 13, Respondent’s Seibel Extracts and ST6 page 23, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[12] Exhibit 2, Supplementary T Documents, ST3, pages 5-6, Email to Applicant regarding lodgement agreement.
^[13] Exhibit 2, Supplementary T Documents, ST5, page 12, Respondent’s Seibel Extracts and ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[14] Exhibit 2, Supplementary T Documents, ST5, page 10, Respondent’s Seibel Extracts,
^[15] Exhibit 2, Supplementary T Documents, ST5, page 9, Respondent’s Seibel Extracts and ST6 page 25, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[16] Exhibit 2, Supplementary T Documents, ST4, pages 7-8, Telephone note; ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[17] Exhibit 2, Supplementary T Documents, ST6 page 25, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[18] Exhibit 2, Supplementary T Documents, ST6 page 24, Respondent’s Seibel Extracts and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, Annexure A.
^[19] Exhibit 1, T Documents, T4, pages 51-88, BAS initiated by the Respondent for the quarterly periods between 1 July 2012 to 31 March 2017 and Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, page 5, paragraph 14.
^[20] Exhibit 1, T Documents, T6, pages 90-109, Notices of amended assessment of net amount for the quarterly periods between 1 July 2014 and 31 March 2017.
^[21] Exhibit 1, T Documents, T8, pages 111-116, Activity Statement Lodgement History.
^[22] Exhibit 1, T Documents, T9, pages 117-122, Objection Application.
^[23] Exhibit 1, T Documents, T9, page 120, Objection Application.
^[24] Exhibit 1, T Documents, T10, pages 123-160, Notices of amended assessment of net amount for the quarterly periods between 1 July 2012 and 31 March 2017.
^[25] Exhibit 1, T Documents, T2, pages 9-12, Objection Decision and Reasons for Decision.
^[26] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, pages 2-5, paragraph 8.
^[27] Exhibit 1, T Documents, T1, pages 1-12, Application for review of decision.
^[28] Exhibit 4, Applicant’s Statement of Facts, Issues and Contentions, pages 1-2, paragraphs 5-12.
^[29] Exhibit 5, Witness Statement of the Applicant, page 2, paragraphs 6-10.
^[30] Exhibit 3, Respondent’s Statement of Issues, Facts and Contentions, pages 7-8, paragraphs 23-30.
^[31] Exhibit 6, Supplementary Witness Statement of the Applicant, pages 2-3, paragraphs 7-10.
^[32] See section 9-5 of the GST Act.
^[33] See sections 11-5, 11-20 and 11-25 of the GST Act.
^[34] Sections 7-5 and 17-5 of the GST Act.
^[35] Section 93-1 of the GST Act.
^[36] Section 110-50 of the TAA 1953.
^[37] Section 14ZY of the TAA 1953.
^[38] Section 14ZZ of the TAA 1953.
^[39] Potentially pursuant to section 43(1)(c)(ii) or section 43(1)(c)(i) in conjunction with section 42D of the Administrative Appeals Tribunal Act 1975 (Cth).
^[40] Trustee for the SBM Trust v Federal Commissioner of Taxation [2015] AATA 174 , 101 ATR 191 .

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