Commissioner publishes final GST Determination on objecting to a private ruling dealing with s 105-65 of the TAA and refunds

Happy new year and welcome to my first post for 2014.

Last week the Commissioner published GST Determination GSTD 2014/1 ‘Goods and Services tax: can you object to a private ruling that the Commissioner makes on the way in which section 105-65 of Schedule 1 to the Taxation Administration Act 1953 applies or would apply to you?”

The Determination has been issued in response to the decision of the Tribunal in Naidoo and Commissioner of Taxation [2013] AATA 443 where the Tribunal found that it had no jurisdiction to hear an application to review a decision of the Commissioner with respect to s 105-65. On 23 August 2013 the Commissioner published a  Decision Impact Statement confirming that he accepted the decision of the Tribunal and that the Tribunal has no jurisdiction to consider an application with respect of the Commissioner’s refusal to exercise his discretion under s 105-65 to refund overpaid GST. 

The issue addressed in the draft GST Determination is whether taxpayers have jurisdiction to object to a private ruling dealing with the application of s 105-65.

The Commissioner considers that he has the power to make an private ruling on the application of s 105-65. However, an objection can only be made to a private ruling if an assessment of the applicant’s net amount has not been made: paragraph 359-60(3)(a) of Schedule 1 to the TAA.

This means:

  • for tax periods prior to 1 July 2012, if no assessments have been made an objection can be made to a private ruling on the application of s 105-65;
  • for tax periods post 1 July 2012, due to the introduction of the self-assessment regime, GST returns are regarded as assessments and an objection cannot be made to a private ruling dealing with s 105-65 if it relates to a tax period in which a GST return has been lodged. An objection can be made if the private ruling relates to future tax periods.  As observed by the Commissioner, given that s 105-65 is about the refund of overpaid GST, this is unlikely to frequently occur in practice.

Implications

The current state of the law appears to be that taxpayers cannot exercise the powers of review under Part IVC of the TAA (including objections and seeking reviews by the AAT or the Federal Court) where the issue involves refunds of GST under s 105-65 of Schedule 1 to the TAA. Rights of review are limited to judicial review proceedings under s 39B of the Judiciary Act 1903 or under the Administrative Decisions (Judicial Review) Act 1977.

However, in November 2013 the Treasurer announced that the Government would be proceeding with the previously announced measures to restrict GST refunds and that the amendments would address the finding of the Tribunal in Naidoo. The previous measures were introduced into the House of Representatives on 26 June 2013 as the Tax Laws Amendment (2013 Measures No.4) Bill 2013The Bill proposed to repeal s 105-65 of Schedule 1 to the TAA and introduce Division 142 into the GST Act. 

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