Australian master GST guide 2020

780 Pages·2020·4.862 MB·English

by  Philip McCouat, CCH Australia Limited,

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© 2020 CCH Australia Limited
First published....................................March 2000 Eleventh edition....................................February
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      Twenty First edition....................................February 2020
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ISBN 978-1-922347-00-8
FOREWORD
This 2020 edition of the Australian Master GST Guide, the 21st in the series, is designed as a practical
and up-to-date explanation of how the GST operates in Australia.
This book aims to:
• help businesses and their advisers to manage and comply with the tax
• equip them to take advantage of some of the opportunities that GST offers, and
• help them to avoid some of the many traps that GST presents.
Plan of this book
Part 1 provides a brief overview of how GST operates and covers the crucial issues in understanding the
tax (Chapters 1 and 2).
The nuts and bolts rules on how GST operates are contained in Part 2. This covers the standard rules on
registration, tax periods, accounting basis, GST liability, claiming credits for GST, adjustments, returns
and payments (Chapters 3 to 8).
Part 3 contains the special rules that apply in areas such as imports and exports, finance, insurance, real
property, transport, food, health, education, charities, gambling, second-hand goods, groups and
branches (Chapters 9 to 17).
Vital planning issues — including pricing and cashflow implications — are covered in Part 4. This part
also contains the transitional rules governing pre-GST contracts, and the anti-avoidance rules.
Administration, audits, compliance, penalties and review are also covered here (Chapters 18 to 21).
Part 5 includes related tax measures — the wine equalisation tax and the luxury car tax. It also explains
how GST is treated for income tax purposes and explains various other GST-related tax rules (Chapters
22 to 24).
Useful checklists covering the GST status of transactions are contained in Part 6. This part also includes
special checklists designed to alert you to GST issues that are relevant to particular industries. A mini-
dictionary of GST terms is also included, as well as a checklist of key GST thresholds (Chapters 25 and
26).
Throughout the text, there are convenient cross-references to commentary in CCH’s flagship Australian
GST Guide (abbreviated as “GSTG”). A comprehensive index and other information locators appear at
the end of the book.
Changes since last edition
This 2020 edition brings the book fully up to date for all developments since the publication of the
previous edition in January 2019. A listing of the main changes introduced since the last edition of the
book is provided at page xi.
Online editions of this book
Reflecting the dynamic GST environment, this book is also available in a continuously updated online
version — the Online Master GST Guide. This version completely updates the commentary at least each
quarter. It also features electronic links so that you can access the text of specific rulings, legislation or
cases referred to in the online commentary. Sophisticated search facilities also enable you to easily
search the online commentary for references to specific paragraphs, rulings, legislation or cases. For
details, visit Wolters Kluwer’s website at www.wolterskluwer.cch.com.au or contact Wolters Kluwer
Customer Support on 1 300 300 224.
Citations
Unless otherwise stated, section references are to sections in the A New Tax System (Goods and
Services Tax) Act 1999. References to other legislation are prefixed as follows:
Administration Act....................................Taxation Administration Act 1953
ITAA 1997....................................Income Tax Assessment Act 1997
ITAA 1936....................................Income Tax Assessment Act 1936
LCT Act....................................A New Tax System (Luxury Car Tax) Act 1999
Reg....................................A New Tax System (Goods and Services Tax) Regulations 1999
CCA....................................Competition and Consumer Act 2010
Transition Act....................................A New Tax System (Goods and Services Tax Transition) Act 1999
WET Act....................................A New Tax System (Wine Equalisation Tax) Act 1999
This edition is up to date for changes notified up to 1 January 2020.
Philip McCouat
Wolters Kluwer Acknowledgments
Wolters Kluwer wishes to thank the following who contributed to and supported this publication:
Director, General Manger, Research & Learning:
Lauren Ma
Associate Director, Regional Head of Content:
Diana Winfield
Author | Editor:
Philip McCouat
Cover Designer:
Anjali Kakkad
Books Coordinator:
Jackie White
ABOUT THE AUTHOR
Philip McCouat MA, LLB (Hons), LLM (Hons), MEnvL, has many years’ experience in business,
publishing and the law. In the area of tax, he is the author of the GST Survival Guide and the Australian
Motor Vehicle Tax Guide. Philip was the Founding Editor for Tax Navigator for Business Activities and
has been a specialist contributor to many other major publications, most recently the Small Business Tax
Concessions Guide, the Australian Master Tax Guide, Australian GST Legislation and the Australian
Federal Income Tax Reporter.
Highlights of GST developments
This sets out significant GST developments — legislative, administrative or judicial — that have occurred
since the preparation of the previous edition. It also provides cross-references to the paragraph in this
book where the development has been incorporated.
GENERALLY
The GST regulations originally issued in 1999 were reissued with minor procedural and numbering
changes (A New Tax System (Goods and Services Tax) Regulations) 2019.
CHAPTER 3: REGISTRATION
• Retired police officer was not carrying on an enterprise of private investigations or share trading where
there was no business plan or evidence of systematic activities (NKCX v FC of T)....................................
¶3-020
• The government proposes that the ABN system will be strengthened to disrupt black economy
behaviour by making the ABN conditional on holders (1) fulfilling any obligation to lodge income tax
returns (from 1 July 2021); and (2) annually confirming the accuracy of their details on the ABN register
(from 1 July 2022).................................... ¶3-050
• Legislation was passed to require offshore supplies of hotel accommodation in Australia to be included
in GST turnover.................................... ¶3-030; ¶11-320
CHAPTER 4: LIABILITY FOR TAX / TAXABLE SUPPLIES
• Where a customer purchased sexual services in a brothel, the relevant supply could not be split up into
a supply of the room hire (by the brothel owner) and a separate supply of the sexual services (by the sex
worker), where the owner supplied the customer with the total service, for a single inclusive price (Case
5/20).................................... ¶4-010
• The Tax Office issued a class ruling on the GST treatment of local government activities (Class Ruling
CR 2019/61).................................... ¶4-080
• Van couriers engaged by a labour hire firm were held to be independent contractors, where they had a
significant financial interest in the van (which had special value as a commercial transport vehicle), and
had some influence in the manner in which they performed the work (Qian v FC of T). However, the Tax
Office does not accept that the fact that a worker supplies his or her own vehicle is a decisive or dominant
factor in determining whether the worker is an independent contractor (Decision Impact Statement on
Qian).................................... ¶4-090
• Draft guidelines were released on where grants of rights are taken to have
occurred.................................... ¶4-102
• The Tax Office finalised its guidelines on when supplies of intangibles are treated as being connected
with Australia, attracting GST liability (GST Ruling GSTR 2019/1).................................... ¶4-102
• Guidelines were finalised on the method of converting digital currency to Australian currency for GST
purposes, effective from 13 April 2019.................................... ¶4-200
CHAPTER 5: CLAIMING INPUT TAX CREDITS / TAX INVOICES
• The Commissioner has the power to direct a liquidator of a company to give GST returns on behalf of
the company within a further specified period. In such a case, the AAT has held that the four-year period
for claiming input tax credits would start to run from that later date (Rosebridge Nominees Pty Ltd (in Liq)
v FCT).................................... ¶5-010
• Where an input tax credit is claimed, the onus is on the claimant to show that an “acquisition” actually
took place (Byron Pty Ltd v FC of T; Stallion (NSW) Pty Ltd v FC of T).................................... ¶5-010
• The ATO withdrew an earlier draft ruling on time limits for claiming input tax credits and is expecting to
finalise its new ruling in 2020.................................... ¶5-010
• A bill proposes that input tax credits should not be available for losses or outgoings incurred by parties
to a Deferred Prosecution Agreement that are not tax-deductible (Crimes Legislation Amendment
(Combatting Corporate Crime Bill) 2019).................................... ¶5-010
• The Commissioner considers that the discretion to waive or modify the tax invoice requirements will be
exercised on a case-by-case basis. The automatic waiver that applied in certain cases where a court or
tribunal had conclusively found that the acquisition was creditable, and that a credit should be allowed, no
longer applies (Notice of Withdrawal of former GST Determination GSTD 2004/1)....................................
¶5-130
CHAPTER 8: GST RETURNS / BAS/ PAYMENT/ ASSESSMENT /
REFUNDS
• People affected by the 2019 floods in North Queensland, or the November/December bushfires, may be
eligible for concessional extensions of time in lodging returns or paying GST, and accelerated refunds
where they are in necessitous circumstances.................................... ¶8-005
• For 2019/20, the GDP adjustment factor used in calculating GST instalments is
5%.................................... ¶8-037
CHAPTER 9: IMPORTS AND EXPORTS
• Legislation was passed to remove luxury car tax on cars re-imported into Australia, following a
refurbishment overseas.................................... ¶9-050; ¶23-050
• The Tax Office reported that, in the first year of their operation, the new rules regulating GST on offshore
supplies of low value goods rules yielded over $250m and enjoyed a “very strong overall level of
compliance”.................................... ¶9-130