ATO consultation on GST on low value imported goods

The Goods and Services Tax (GST) law is to be amended by Treasury Laws Amendment (GST Low Value Goods) Bill 2017 to ensure that GST is payable on certain supplies of low value goods that are purchased by consumers and are imported into Australia. In this regard, the Australian Taxation Office (ATO) has issued draft Law Companion Guideline LCG 2017/D2. The draft LCG discusses when a supply of low value goods will be connected with the indirect tax zone, and how to calculate the GST payable on such a supply. It aso addresses the rules to prevent double taxation of goods, to correct errors or deal with changes in the GST treatment of a supply and how the rules interact with other rules.

In addition, the ATO is also consulting on the following aspects of its administration of the new rules:

  • the information requirements for suppliers, or entities treated as suppliers for GST purposes (i.e the actual supplier of the goods, an operator of an electronic distribution platform, or a redeliverer)
  • an alternative method for converting foreign currency amounts to Australian dollars to determine whether supplies are low value goods, and
  • an alternative method for converting foreign currency amounts to Australian dollars when calculating GST payable under the proposed amendments.

ATO reviewing GST and noncommercial activities of charities – benchmark market values

The ATO is currently reviewing its publication, GST and non-commercial rules – benchmark market values. Accommodation supplied by an endorsed charity or gift-deductible entity is GST-free if the consideration received for the accommodation is less than 75 per cent of market value including GST. This publication includes the ATO view of suitable market values for certain supplies of accommodation, meals and employment services. The review will focus on Table 5: Long-term accommodation – weekly figures and Table 6: Employment service fees.

Release of Draft GST legislative determinations

The ATO has released the following Draft GST legislative determinations for comment:

  • WAN 2017/D2: Draft A New Tax System (Goods and Services Tax) Act 1999: Waiver of Adjustment Note Requirement (No XX) 2017 – Decision of a Court or Tribunal
  • PAR 2017/D1: Draft A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Cooling off Periods) Determination (No. 5) 2017
  • PAR 2017/D2: Draft A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Retention Payments) Determination (No. XX) 2017
  • PAR 2017/D3: Draft A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rules for Supplies and Acquisitions made through Agents) Determination (No. 6) 2017  PAR 2017/D4: Draft Goods and Services Tax: Application of Particular Attribution Rules Determinations (Determination (No.08) 2017)
  • PAR 2017/D5: Draft A New Tax System (Goods and Services Tax) Act 1999 (Particular Attribution Rule for Supplies of Gas or Electricity made by Public Utility Providers) Determination (No XX) 2017
  • PAR 2017/D6: Draft Goods and Services Tax: Particular Attribution Rules Devices Determination (No XX) 2017 for Banknote and Coin-operated Machines and Similar
  • PAR 2017/D7: Draft Goods and Services Tax: Particular Attribution Rules Determination (No XX) for Lay-By Sales
  • RCTI 2017/D5: Draft Goods and Services Tax: A New Tax System (Goods and Services Tax) Act 1999 Recipient Created Tax Invoice Determination (No. 0023) 2017 for wholesalers of photographic imaging equipment and related supplies
  • RCTI 2017/D6: Draft Goods and Services Tax: Recipient Created Tax Invoice Determination (No. XX) 2017 for Agricultural Products, Government Related Entities and Large Business Entities
  • RCTI 2017/D7 Draft Goods and Services Tax: Recipient Created Tax Invoices Determination (No XX) 2017 for Demand Side Response Aggregators
  • RCTI 2017/D8 Draft Goods and Services Tax: Recipient Created Tax Invoices Determination (No XX) 2017 for Quarry Operators
  • RCTI 2017/D9 Draft Goods and Services Tax: Recipient Created Tax Invoice Determination (No XX) 2017 for Australian Direct Property Investment Association Inc and their Originating Members
  • WTI 2017/D1: Draft A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No. XX) 2017 – Decision of a Court or Tribunal  WTI 2017/D2: Draft A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No. XX) 2017 – customers of Custom Service Leasing Pty Ltd
  • WTI 2017/D3: Draft A New Tax System (Goods and Services Tax) Act 1999 Waiver of Tax Invoice Requirement Determination (No XX) 20XX for intangible supplies from offshore

AAT considers entitlement to input tax credits

In Eastwin Trade Pty Ltd v Commissioner of Taxation (Taxation) [2017] AATA 140, the Administrative Appeals Tribunal (AAT) has affirmed the Commissioner's decision and held the applicant was not entitled to input tax credits on the purchase of ‘scrap gold’ as it failed to prove that it actually made any ‘creditable acquisitions’ and did not hold any valid tax invoices for such acquisitions. Although the evidence pointed to the fact that there was some kind of acquisition, it was “devoid of any credible details about the identity and reality of the ‘supplier’ and that entity's circumstances and activities".