ATO issues ATO ID on attribution and ss 29-10(4) – another example of “purposive” construction

The ATO has issued ATO ID 2011/76 which takes the view that ss 29-10(4) of A New Tax System (Goods and Services Tax) Act 1999 does not prevent an entity from revising a GST return for an earlier tax period so as to take into account an input tax credit for that earlier tax period.  The ID appears to confirm that where an entity discovers that it failed to claim an input tax credit for an earlier tax period, it can elect to either amend the GST return relating to that earlier tax period or claim the credit in the current GST return.

While this may be a reasonable outcome, it is one which is not readily apparent from the terms of the statute.  As noted in the ID, a literal reading of ss 29-10(4) might lead to the conclusion that the entity cannot revise the earlier period and must attribute the credit to the later period.  The ATO appears to take the view that an election by the entity to amend the previous GST return somehow overrides the mandatory language in ss 29-10(4).  While the extracts of the Explanatory Memorandum referred to in the ID may support the Commissioner’s construction, the dangers of relying on extrinsic materials to base a statutory construction contrary to the words of the statute were outlined by Logan J in Deputy Commissioner of Taxation v PM Developments [2008] FCA 1886.  As noted by his Honour (at [47]) “An assertion as to its meaning and effect in an explanatory memorandum circulated by or with the authority of the Minister introducing a Bill into Parliament, like the Second Reading Speech in respect of that Bill, is not a substitute for the language employed by the Parliament in the Bill as enacted…It is the duty of the courts to construe enactments, not to make them.  If, truly, the language of an enactment does not translate into law a meaning and effect that one might apprehend from secondary materials was intended it is for the Parliament to rectify that by further legislative provision”.

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