On 7 October 2009, Tax Laws Amendment (2009 GST Administration Measures) Bill 2009 has been released by the Treasury in response to the Board of Taxation’s review of the legal framework for the administration of the GST.

The Draft Bill introduces the following measures:
  • Introducing a four-year limit on claiming input tax and fuel tax credits
  • Establish a bulky goods export refund scheme for Australian External Territory residents
  • Increase the range of entities entitled to act as principal for GST accounting purposes in the agency provisions
  • Clarifying how the GST law applies to offshore gambling transactions
  • Clarifying the Commissioner’s power to recover overpaid refunds
  • Clarifying the interaction of the GST associate provisions
  • Increasing the adjustment note threshold.

  1. Four year limit

    The period a taxpayer will be entitled to claim an input tax credit or fuel tax credit will be limited to four years. Taxpayers are able to extend the four year limit if they apply or the Commissioner has provided a notice for extension. 

  2. Australian External Territory refund collection system

    The exposure draft will amend the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to expand Division 168 of the GST Act to allow residents of Australia’s External Territories (such as Norfolk, Cocos and Keeling and Christmas Islands) to be entitled to claim refunds under the tourist refund scheme.

  3. Agency provisions

    Currently, only common law agents are able to enter into agreements with principals concerning the supplies and acquisitions that they make for principals.  These supplies and acquisitions can be treated for GST purposes as taxable supplies and creditable acquisitions made by the agent to or from the principal. 

    The new measures are aimed to expand the agency provision to allow other intermediaries that are not common law agents to treat taxable supplies and creditable acquisitions by the principal to or from a third party to have made by the agents to or from the third party.  This means that agents that are non common law agents entering into this arrangement will be able to issue tax invoices for, and be liable for GST payable on taxable supplies they are taken to make from a third party, and be entitled to input taxed credits for creditable acquisitions made.  These acquisitions and supplies will be recorded on the agent’s own Business Activity Statement and principals will be taken to have either make or receive a supply to or from the agent.

    To be eligible for the usage of this Subdivision, the principal and the agent will need to enter into an agreement in writing that the agent will facilitate supplies to third parties, acquisitions from third parties or both on behalf of the principal.  The principal and the agent will be taken, for GST purposes, as acting as separate suppliers and acquirers in relation to the supplies and acquisitions covered by the agreement.  If the principal makes a creditable acquisition that is covered by the agreement from a third party and the agent pays an amount on behalf of the principal to the third party customer, the agent will be taken as having made the creditable acquisition.  Any commission payable by the principal to the agent for the services provided by the agent is taken to be included in the value of the taxable supply made by the agent to the principal.

    For example,



    In this example, Patrick as the paying agent (not a common law agent) has made a creditable acquisition of goods for $110 (GST inclusive) from Jonathan and makes a taxable supply of the same thing for $132 (GST inclusive) to Melissa.  Patrick is entitled to a $10 input tax credit for the acquisition he is taken to make from Jonathan and is liable to pay $12 GST on the supply he is taken to make to Melissa.

  4. Gambling provisions

    Under the current law, the GST payable on gambling is based on a global formula rather than an individual basis.  The total monetary prizes only explicitly exclude prize money paid in relation to supplies that are GST-free if they arise out of gambling events conducted by gift deductible entities or are otherwise GST-free under section 38-270 of the GST Act.  Under the new laws, ‘total monetary prizes’ will be defined to explicitly exclude prize money paid in relation to GST-free supplies.

  5. Recovering overpaid refunds

    The exposure draft will amend the GST Act so that an overpaid refund of GST, luxury car tax credits and fuel tax credits are treated as an amount due and payable from the date of the overpayment.

  6. Associate provisions

    Currently, supplies made to associates for no consideration may be treated as a taxable supply rather than input tax taxed or GST-free supply.  The new laws will amend the GST Act to ensure that these supplies remain input tax taxed or GST-free.  In addition, a supply to an associate would include a sale despite being without consideration.  

  7. Adjustment Threshold

    A New Tax System (Goods and Services Tax) Amendment Regulations 2009 (No.) has been introduced to amend A New Tax System (Goods and Services Tax) Regulations 1999 to increase the threshold from $50 to $75 below which an adjustment note will not be required to be issued for a decreasing GST adjustment and where an adjustment note is not necessary for attribution purposes.