Legislation introducing Division 142 into the GST Act receives Royal Assent

On Friday 30 May 2014 the the Tax Laws Amendment (2014 Measures No.1) Bill 2014 received royal assent. The Act repeals the current regime dealing with refunds of GST found in s 105-65 of Schedule 1 to the TAA and replaces it with a totally new regime in Division 142 in the GST Act.

The date of royal assent is important because the new regime applies to tax periods starting on or after that day. For monthly taxpayers that means tax periods starting 1 June 2014 and for quarterly taxpayers that means tax periods starting 1 July 2014.

Division 142 effectively creates a deeming regime, whereby overpaid GST that has been passed on to another entity is taken to have always been payable until that other entity is reimbursed for the passed on GST. Taxpayers can self assess their entitlement to GST refunds, where the GST has not been passed on or the GST has been reimbursed. The Commissioner retains a discretion to pay refunds, but it is expected to have a narrow operation.

The Bill can be accessed here.  The Explanatory Memorandum can be accessed here. The Bill passed through Parliament without amendment.

 

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