Category Archives: Appeals

International cases – April 2013

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In April 2013 the following VAT/GST decisions were handed down in the UK and Canada.

Of interest is a decision of the UK Supreme Court dealing with VAT, in WHA Limited v Her Majesty’s Revenue and Customs [2013] UKSC 24 which considered the effectiveness of a scheme which was designed to minimise the overall liability to VAT of a group of companies involved in motor breakdown insurance.

This case involved a group of companies involved in motor breakdown insurance (“MBI”) and the essential question was whether, in circumstances where the repairers repaired the insured’s vehicle and WHA (a group entity) paid the repairer (or reimbursed the insured who had paid the repairer), there was a supply of repair services by the repairers to WHA instead of, or as well as, a supply to the insured. This decision provides an illustration of how the Courts in the UK seek to characterise the VAT implications of a transaction by reference to the “economic reality” of the transaction. The Supreme Court observed that the contractual position is “the most useful starting point” but is not conclusive of the taxable supplies being made between the participants in the arrangements. The position in Australia, after the decision of the High Court in Qantas is not so clear. In that case, the High Court focused on the terms of the contract between Qantas and its customers and expressly rejected the relevance of concepts such as the “essential purpose” of the transaction.

My analysis of the decision can be accessed here.

United Kingdom

Supreme Court

Upper Tax Tribunal

  • HMRC v The British Disabled Flying Association [2013] UKUT 162 – VAT – zero rating – aircraft for use by disabled persons – whether aircraft modified for use by disabled persons after manufacture are ” designed” for such use – held yes but one aircraft not so designed at time of supply – whether Respondent is a ” relevant establishment” for the purposes of Group 15 to Schedule 8 VAT Act 1994 – held no – whether Tribunal has jurisdiction to decide whether appellant had legitimate expectation – held no – appeal allowed in relation to one aircraft and dismissed in relation to the other
  • HMRC v Esporta Limited [2013] UKUT 173 – VAT –whether First-tier Tribunal erred in concluding that membership fees recovered after access to club’s facilities had been denied due to non-payment were not consideration for a supply but compensation – held yes – appeal allowed
  • Scottish Football League v HMRC [2013] UKUT 160 – Value Added Tax; supply of goods; business gift; disposal otherwise than for a consideration; supply by football association of end of season medals to league division points champion clubs; whether output tax payable on the value of such medals – yes; or whether accounted for by output on membership, sponsorship, copyright royalties, and/or broadcasting fees; no; Value Added Tax 1994 Schedule 4, paragraph 5; Principal VAT Directive 2006/112/EC Article 16

First Tier Tribunal

  • H Q Graphics Ltd v Revenue & Customs [2013] UKFTT 226 – VAT – INPUT TAX – Article 5 of VAT (Special Provisions) Order 1995 –  sale of printing machinery and office equipment to appellant not to be treated as a supply of goods on basis the seller of the machinery and equipment had transferred its business as a going concern to the appellant – – appeal dismissed
  • N & M Walkingshaw Ltd v Revenue and Customs [2013] UKFTT 269 – VAT – sale of motor car on part-exchange terms – price of part-exchange car includes ‘over-allowance’ – value of supply of replacement car – periods prior to 1 August 1992 – s 10 VATA 1983 – application of ‘open market value’ – whether such value of replacement car should reflect a discount on a cash sale equivalent to the amount of the over-allowance

Canada

Tax Court

Legislative determination on correcting GST errors, decision impact statement on Private Tutor case, ATO IDs on emission units

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On Friday a range of things issued in relation to GST.

GST and correcting errors

Legislative determination GSTE 2013/1 was published by the Deputy Commissioner of Taxation. The determination specifies the circumstances in which you may, in working out your net amount for a tax period, correct errors that were made in working out your net amount for an earlier tax period. The Commissioner has published a guide on the application of the determination, which can be accessed here.

The determination  applies to errors relating to an amount of GST, input tax credit or adjustments. However, the determination does not apply if the error relates to a matter which is the subject of compliance activity by the ATO  or if the error was made in a tax period which  is the subject of compliance activity.  The determination also does not apply if the error was the result of recklessness or intentional disregard of a GST law and if the amount of the error exceeds the value limit. The value limit is tied to the GST turnover of the entity. For example, an entity with a turnover of less than 20 million  has a value limit of $10,000 and an entity with a turnover of $1 billion or more has a value limit of $450,000.

Decision Impact Statement on The Private Tutor and Commissioner of Taxation

The Commissioner has released a decision impact statement for the decision of the Tribunal in The Private Tutor and Commissioner of Taxation [2013] AATA 136 the Tribunal accepted that taxpayer’s contention that he was carrying on an enterprise of tutoring but the Tribunal found that it was not satisfied that the taxpayer was entitled to any of the input tax credits claimed. My post discussing that decision can be accessed here.

In my post I noted the Tribunal’s adverse comments on the Commissioner’s conduct in issuing assessments to the taxpayer for a positive net amount in an attempt to “claw back” GST while maintaining that the  taxpayer was not entitled to be registered for GST. Notwithstanding these adverse comments, the Commissioner “respectfully maintains his view” that he is entitled to rely on s 105-65 to retain refunds in such circumstances. The Commissioner also notes that the Tribunal has reserved a decision dealing with this question in another case and he will review his position generally once the Tribunal hands down its decision in that matter.

The Commissioner also notes that the draft legislation introducing division 142 into the GST Act  (and repealing section 105 – 65) would likely remove any uncertainty as to the correct approach in cases like this one.

ATO IDs

The Commissioner has issued the following IDs dealing with the supply of options over GST-free eligible emission units:

News Flash! High Court allows Commissioner’s appeal in Unit Trend

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Today the High Court unanimously allowed the Commissioner’s appeal from the decision of the Full Federal Court in Commissioner of Taxation v Unit Trend Services Pt Ltd [2012] FCAFC 112. The High Court found that the phrase “not attributable to” in s 165-5(1)(b) of the GST Act is concerned with whether the GST benefit in question is not one to which the taxpayer was entitled by exercise of a statutory choice. Further, reference to the undisputed facts showed that the GST benefit in question was not attributable to the making of a statutory choice by Unit Trend provided for by the GST Act. The GST benefit was therefore negated by the anti-avoidance provisions in Division 165.

The judgment can be accessed here. My case analysis can be found here.

An expanded bench of the High Court heard the Commissioner’s application for special leave to appeal. The transcript can be found here.

Because the application was referred to a full bench, the submissions filed by the parties are available on the High Court website. They can be accessed below:

My analysis of the Full Federal Court decision in Unit Trend can be found here.

The transcript of the initial application for special leave heard by the High Court in December 2012  can be found here.

Federal Court finds that supply of tour packages to overseas tourists was taxable

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The Federal Court yesterday handed down its decision in ATS Pacific Pty Ltd v Commissioner of Taxation [2013] FCA 341 where it agreed with the Commissioner that ATS made a taxable supply to overseas travel agents where the travel agents arranged tour packages for overseas tourists in Australia comprising Products (being accommodation, goods and services) acquired and paid for by the taxpayer. The Court rejected the taxpayer’s argument that the supply was of the “booking and arranging” of the Products (for use by the tourists) and was GST-free as those supplies were not consumed in Australia. The Court did agree with the taxpayer’s alternative argument that the “margin” charged to the travel agents over and above the cost of the Products was GST-free.

The Federal Court also rejected the taxpayer’s contention that the Commissioner’s discretion to refuse to pay refunds of GST in s 105-65 of Schedule 1 to the TAA (being the form that applied prior to 1 July 2008) did not apply because the section only applied to “an actual taxable supply”.

My analysis of the decision can be found here.

International cases update – March 2013

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March was a busy time in the UK for VAT decisions. In additional to the usual raft of decisions by the Tribunal, there were two notable decisions of the higher courts, being the Supreme Court and the Court of Appeal.

The first decision is Her Majesty’s Revenue and Customs v Aimia Coalition Loyalty UK Limited (formerly known as Loyalty Management UK Limited) [2013] UKSC 15 where the Supreme Court considered whether the promoter of a loyalty scheme was entitled to input tax for payments made to retailers of goods who participate in the scheme and provide goods to customers who redeem points. The Court also considered the issue of whether the principles established in the Redrow line of cases were still good law. My analysis of this decision can be accessed here.

The second decision is Vehicle Control Services Limited v The Commissioners for Her Majesty’s Revenue & Customs [2013] EWCA Civ 186 where the issue was whether parking charges were subject to VAT as being consideration for a supply or payments in the nature of damages. My analysis of this decision can be accessed here.

United Kingdom

Supreme Court

Court of Appeal

High Court of Justice

Upper Tax Tribunal

  • British Association of Leisure Parks, Piers and Attractions Ltd v Revenue and Customs [2013] UKUT 130 – Value Added Tax – claim to repayment of output tax allegedly overpaid – whether services provided by Appellant Association to its members exempt under Value Added Tax Act 1994, Schedule 9, Group 9, Item 1(d) – whether primary purpose of Association was lobbying – whether any exemption under Item 1(d) disapplied by Note 5 – whether membership of Association restricted in accordance with Note 5 – whether defence to repayment of allegedly overpaid output tax on the ground of unjust enrichment
  • HM Revenue & Customs and Ford Motor Co Ltd v Brunnel Motor Co Ltd [2013] UKUT 6 -Value Added Tax – Whether original agreement for supply of cars discharged by subsequent agreement – Question of fact remitted by the Court of Appeal for determination by the First-tier Tribunal – Whether material error of law in determination of that question by the FTT – No – Appeal dismissed
  • Reed Employment Ltd v HMRC [2013] UKUT 109 – Value added tax (VAT) – what constitutes a new claim as compared to an amended claim under VATA section 80 – whether HMRC can rely on a defence of unjust enrichment in relation to claims made after 26 May 2005 – application of EU principles of effectiveness, equal treatment and fiscal neutrality

First Tier Tribunal

  • Longridge on the Thames v Revenue & Customs [2013] UKFTT 158 – VAT – whether building intended for use solely for a relevant charitable purpose – charity with objects of educating young people in water activities – construction of training centre – whether construction services zero-rated – whether charity carrying on a business/economic activity – no – Items 2 and 4 of Group 5 of Schedule 8 to VATA 1994 – Notes (6) and (10) to Group 5 – Articles 2, 9, 132 and 133 of VAT Directive – appeal allowed
  • Sandwell Metropolitan Borough Council v Revenue & Customs [2013] UKFTT 125 – VAT – single or  multiple supply- 10 year lease of memorial in a  crematorium and right to inscribed plaque – held single supply; nature of supply – held supply of letting of immovable property
  • Systems Aluminium Ltd v Revenue & Customs [2013] UKFTT 201 – VAT – overpayment of output tax charged by Appellant to business customer registered for VAT; reimbursement arrangements with HMRC; whether arrangement a binding contract; whether reimbursement arrangements ultra vires; Appellant crediting customer with reimbursement to reduce customer’s indebtedness to Appellant; whether reimbursement made “in cash or by cheque”; assessment to recover repaid VAT on grounds of unjust enrichment; whether Appellant unjustly enriched; whether Appellant incurred loss or damage through mistaken assumptions made in his case about the operation of VAT provisions; VAT 1994 s80(1)(3), 80(4A), 80B, 80(3B); VAT Regulations 1995, regulations 43B, 43C, 43G; whether Tribunal has jurisdiction to consider public law remedy; appeal dismissed
  • Tallington Lakes Ltd v Revenue & Customs [2013] UKFTT 159 – VAT – exempt supplies – pitches for mobile homes – voluntary disclosure for periods 04/89 to 12/96 – claim to repayment of output tax – Group 1 Schedule 6 VAT Act 1983 – seasonal pitches – supplies properly standard rated –  appeal dismissed
  • The Royal College of Paediatricians and Child Health v Revenue & Customs [2013] UKFTT 202 – VAT – Whether sale of property subject to agreement for lease  TOGC –  on facts – yes – Whether assessment to tax made timeously – no – Whether vendor of property required to repay input VAT to reflect partially exempt use of property by purchaser – no – appeals allowed

European Court of Justice

Tribunal finds de-registered taxpayer not entitled to a decreasing adjustment under Division 129

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In GOL-HUT Pty Ltd as trustee for the Helensvale Unit Trust and Commissioner of Taxation [2013] AATA 199 the Tribunal affirmed the decision of the Commissioner that the applicant, who had deregistered for GST, was not entitled to a decreasing adjustment for change of use under Division 129 when it sold a retirement village that had been used to make input taxed supplies.

The facts of the case are unusual.

  • The applicant had acquired land in June 2000 on which a retirement village was constructed. The retirement village commenced operation in 2003 and in 2006 the trustee sold the village for $26,276,000. At the time of the sale, the independent living units in the village would have been classified as new residential premises.
  • The trustee (who was registered for GST from 1 July 2000) did not claim any input tax credits for the costs relating to the construction and operation of the village – apparently because the trust was making input taxed supplies. The trust then de-registered for GST in 2006 and did not account for GST on the supply of the village – the village was simply sold without GST applying.
  • In 2011 the trustee notified the Commissioner of a claimed entitlement to a “decreasing adjustment” of $2,074,179 and a request for a private ruling was lodged. The claim was essentially that the trustee was entitled to a decreasing adjustment because of the change of use in the village (ie, it was sold as a taxable supply, rather than the input taxed supply of the lease of residential premises). The ruling was not granted and the applicant objected to the ruling and sought review of the objection decision before the Tribunal.

The claim of the applicant appears to have been that because of the change in use of the retirement village, the applicant was entitled to a decreasing adjustment under Division 129 to reflect the fact that it was entitled to claim input tax credits for the acquisitions relating to the construction of the village. As observed by the Tribunal, such an adjustment is ordinarily made in a subsequent tax period, rather than by a revision of the original BAS.

The issue before the Tribunal was whether the applicant had further tax periods (and therefore adjustment periods) applying to it after it cancelled its GST registration (It should be noted that it was not contended that the applicant was at any time after cancellation, required to be registered for GST). The applicant contended that the effect of Division 138 (which is about cessation of registration), in particular ss 138-17(2) and (3), give continued operation to Division 129 after cancellation. The Commissioner contended that Division 129 could not operate unless there was a tax period – and post-cancellation there was no tax period and hence, no adjustment period.

The Tribunal did not accept the applicant’s argument. The Tribunal found that Division 138 did not have a stand-alone effect. Further, the Tribunal observed that such an operation would be contrary to the scheme of the GST Act and also inconsistent with the Explanatory Memorandum introducing s 138-17. The Tribunal concluded that Division 129 could not have any application to an entity that was neither registered nor required to be registered – the division cannot operate to create a tax period independent of the operation of the Act.

Tribunal decision on whether a supply of a going concern; ATO issues draft Practice Statement on Division 81 of the GST Act

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In Brookdale Investments Pty Ltd and Commissioner of Taxation [2013] AATA 154 the Tribunal agreed with the Commissioner that the sale of land by the applicant was not GST-free as the supply of a going concern because there was no evidence that the parties so agreed in writing prior to the supply being made (ie, prior to settlement). The Tribunal also found that the notice issued by the Commissioner under s 105-50 of Schedule 1 to the TAA was valid and that Commissioner may have treated the acquisition by the purchaser as GST-free was not relevant to the application. That view is undoubtedly correct, although it does appear strange that the Commissioner could maintain a different GST treatment for the parties. It may be that the purchaser was out of time to recover input tax credits. My analysis of this decision can be accessed here.

The ATO has released ATO Practice Statement PSLA 3618 (GA) (draft) “GST treatment of Australian taxes, fees and charges under Division 81 of the A New Tax System (Goods and Services Tax) Act 1999 from 1 July 2013.

The practice statement sets out the administrative approach the ATO will take where Australian government agencies determine the GST classification of supplies that they make for which Australian fees and charges are received as consideration.

The ATO’s approach is as follows:

  1. subject (3) below, Australian fees and charges covered by the Treasurer’s determination that satisfy the requirements of s 81-10(1) and/or regulation 81-15.01 are exempt
  2. if an entity classifies Australian fees or charges as being ‘exempt’ in accordance with the Treasurer’s determination, the Commissioner will not disturb the treatment retrospectively
  3. those Australian fees and charges that are listed on the Treasurer’s determination that are regarded as being consideration for a supply will not be eligible to receive this treatment
  4. if an Australian fee or charge that receives this treatment is subsequently considered not to be exempt, the Commissioner will require the treatment to be changed prospectively.

The draft has been published for comments, which are due by 19 April 2013.

Tribunal decision on GST and use of industry benchmarks; ATO ID on input tax credits for employee reimbursements

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On Friday the Tribunal handed down its decision in Carter and Commissioner of Taxation [2013] AATA 141 and on Thursday the Commissioner issued ATO ID 2013/3 “Amount of input tax credits relating to employee reimbursements”.

In Carter and Commissioner of Taxation the Tribunal affirmed the Commissioner’s assessment for income tax and GST in respect of the applicant’s florist business. The basis of the assessment was that the BASs and income tax returns lodged by the applicant were based on a Cost of Goods Sold (COGS) of 83% of her reported business income, which was outside the COGS industry benchmark of between 44% and 54%. The Tribunal found that the applicant had failed to discharge her burden of showing the assessments were excessive. The Tribunal also rejected an argument by the applicant that the use of benchmarks by the Commissioner breached s 99 of the Commonwealth Constitution (which prevents the Commonwealth from giving preference to one State over another State). The applicant contended that the use of benchmarks were in appropriate for Western Australia as the costs of flowers and other items are more expensive than the eastern States. The Tribunal found that there was no factual basis for the contention, but found that it did not have jurisdiction to consider the question.

In ATO ID 2013/3 the Commissioner takes the view that the amount of input tax credit available under s 111-10 of the GST Act is reduced under s 11-30 if the acquisition is partly creditable. The issue was considered in the context of a financial institution where an employee is reimbursed for an expense that is related directly to his activities as an employee and is for an acquisition that was a taxable supply to the employee.

The basis of the Commissioner’s view is that while s 111-10 provides that the amount of the input tax credit is 1/11th of the reimbursement, and the section expressly overrides s 11-25 (which is about the amount of input tax credits for creditable acquisitions), s 111-10 does not override s 11-30 (which is about partly creditable acquisitions) so therefore, to the extent that the acquisition for the reimbursement relates to making input taxed supplies, the acquisition is not creditable. Having regards to the words of the various sections, while I can understand the reasoning behind the Commissioner’s view, in my view this approach may be doubted.

Section 111-10(3) states that s 111-10 has effect despite s 11-25 (and makes no express reference to overriding s 11-30). However, in my view it can be argued that s 111-10, by implication, also overrides s 11-30. The basis for that view is as follows:

  • s 11-25 states that “The amount of input tax credit for a *creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired. However, the amount of the input tax credit is reduced if the acquisition is only *partly creditable.” (emphasis added). The underlined words shows that s 11-30 operates to reduce the input tax credit otherwise available under s 11-25.  Accordingly, if s 111-10(3) excludes s 11-25, it also (by implication) excludes s 11-30.
  • S 111-10(2) provides a stand alone mechanism whereby the input tax credit deemed by s 111-10(1) can be reduced – the Commissioner’s view is that s 11-30 operates as a further mechanism whereby that input tax credit may be reduced. If the intent of Parliament was to provide for the further reduction of the input tax credit on that basis, it could easily have said so.
  • The Explanatory Memorandum introducing Division 111 states that “the input tax credit is generally  equal to 1/11th of the actual reimbursement” and refers to the scope for reduction in s111-10(2) – no reference is made to a further scope for reduction under s 11-30.
  • Section 45-5 provides that the special rules (which includes Division 111) override the provisions of Chapter 2 “but only to the extent of any inconsistency”. In my view it can be argued that the provisions in s 111-10 are inconsistent with s 11-25 and s 11-30.

The effect of this construction is that the financial institution referred to in the ATO ID would be entitled to an input tax credit equal to 1/11th of the amount of the reimbursement, notwithstanding that the financial institution would be entitled to a lower recovery threshold for acquisitions made directly.

News Flash! – High Court reserves decision on special leave application in Unit Trend

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Today an expanded bench of the High Court (5 judges) heard the Commissioner’s application for special leave to appeal the decision of the Full Federal Court in Commissioner of Taxation v Unit Trend Services Pt Ltd [2012] FCAFC 112. The High Court reserved its decision – the transcript has just appeared on Austlii and can be found here.

The application deals with the proper construction of the anti avoidance provisions in Division 165 of the GST Act and particularly the “choice provisions” providing that the provisions do not apply if the GST benefit arises because of a choice, agreement, election etc arising under the GST Act. Central to the issue is the meaning to be given to the word “attributable”. As noted in the Commissioner’s submissions, the construction of this term may also impact on the operation of the anti-avoidance provisions in Part IVA of the Income Tax Act.

Because the application was referred to a full bench, the submissions filed by the parties are available on the High Court website. They can be accessed below:

My analysis of the Full Federal Court decision in Unit Trend can be found here.

The transcript of the initial application for special leave heard by the High Court in December 2012  can be found here.

Tribunal finds private tutor carrying on enterprise but not entitled to input tax credits – also concludes the Commissioner’s actions in issuing assessments were unsatisfactory

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Today, in The Private Tutor and Commissioner of Taxation [2013] AATA 136 the Tribunal accepted that taxpayer’s contention that he was carrying on an enterprise of tutoring but the Tribunal found that it was not satisfied that the taxpayer was entitled to any of the input tax credits claimed.

The taxpayer lodged BASs for each tax period whereby input tax credits exceeded GST. The Commissioner formed the view that the taxpayer was not carrying on an enterprise and had not done so during the previous four years – the Commissioner then cancelled the taxpayer’s GST registration. The Commissioner nevertheless issued assessments to the taxpayer showing a positive GST amount. For each tax period in question, the assessments reflected an adjustment of the taxpayer’s net amount from a negative to a positive tax position.

What is interesting about this case is the Tribunal’s adverse comments on the Commissioner’s conduct in issuing assessments to the taxpayer for a positive net amount.

Deputy President Frost observed that it was “surprising” that the Commissioner assessed the taxpayer to a positive net amount for each tax period in question, given that the Commissioner’s central proposition was that the taxpayer was not at any stage carrying on an enterprise. The Commissioner’s explanation for making the assessments was to give effect to the Commissioner’s discretion to withhold refunds pursuant to s 105-65 of Schedule 1 to the TAA – the Deputy President stated that the Commissioner’s approach and explanation were unsatisfactory. The comments of the Tribunal are reproduced below:

[15]. As mentioned above, s 17-5 of the GST Act defines the “net amount” for a tax period as the difference between the GST payable on taxable supplies and the ITCs available in respect of creditable acquisitions…

[16] Section 17-15 speaks directly to taxpayers. It does not speak for the Commissioner. It tells taxpayers that they may choose to work out their net amount in the way specified in an approved form, and if they make that choice, then the amount that they work out in that way is their net amount, no matter what the net amount might have been if it had been worked out under s 17-5.

[17] The taxpayer evidently chose, as virtually all taxpayers do, to work out his net amount in the way specified in an approved form – namely, the quarterly BASs that he lodged. To take his BAS for the April to June 2007 quarter as an example, the amount that he “worked out” by using the way specified in the BAS was minus $311. Because of s 17-15, that amount became his net amount. (It does not seem to matter that the “way” of working out the net amount as specified in the BAS and the “way” of working out the net amount as specified in s 17-5 are exactly identical, and it also does not seem to matter that the figures that the taxpayer used in that “working out” exercise may have been wrong: see Commissioner of Taxation v Multiflex Pty Ltd [2011] FCAFC 142 at [25].)

[18] Now, as the Full Court pointed out in Multiflex at [26], that amount of minus $311 can be “superseded” as the net amount if, for example, the Commissioner makes an assessment of the taxpayer’s net amount under the power that is available to him in s 105-5 in Schedule 1 to the TAA. That is what the Commissioner did here. But in arriving at the taxpayer’s net amount (under s 17-5, since s 17-15 has no relevance to the calculation of net amount by the Commissioner), the Commissioner used, as one of the integers in the calculation, the “GST payable” figures that the taxpayer reported in his BAS. The only apparent reason for doing so was that it was one of the integers that the taxpayer used when he worked out his net amount in the way that s 17-15 says he can. The Commissioner clearly did not think that was the correct amount of “GST payable”, because by the time of making the assessment, he had formed the view that the taxpayer was not carrying on an enterprise. The Commissioner was therefore bound to conclude, based on that view of the facts, that s 9-5(b) was not satisfied, and so the taxpayer could not have an amount of “GST payable”. The Commissioner should have applied the reasoning set out in [12]above, and assessed a net amount of zero.

[19] Instead, and for the presumed purpose of creating an opportunity to claw back the $79 declared by the taxpayer on what the taxpayer thought were taxable supplies, the Commissioner assessed the taxpayer for that amount, namely $79. In doing so, he committed at least two errors. First, he assessed a net amount which, on his view of the facts, cannot possibly satisfied the requirements of s 17-5 of the GST Act. And secondly, he sought to invoke s 105-65 (a provision dealing with restrictions on refunds to a taxpayer) as authority for recovering an amount from a taxpayer. Section 105-65 is neither designed nor drafted to play that role.

The above paragraphs appear to reflect an attempt by the Commissioner to utilise the provisions of s 105-65 of Schedule 1 of the TAA to underpin a recover of “over-recorded” GST in the taxpayer’s BAS (but not overpaid by reason of the taxpayer’s claim for input tax credits) – rather than “over-paid” GST. The words of s 105-65 are clear – the section applies if “you overpaid the amount”.