2016 National GST Intensive

Transcription

1 2016 National GST Intensive Session 4B: When Property & GST gets Tricky.and more interesting Written & presented by: Ken Fehily CTA Fehily Advisory Scott McGill CTA Pitcher Partners In reply: Hoa Wood Assistant Commissioner ATO National Division 8 9 September 2016 Four Points by Sheraton, Sydney Ken Fehily, Scott McGill 2016 Disclaimer: The material and opinions in this paper are those of the author and not those of The Tax Institute. The Tax Institute did not review the contents of this paper and does not have any view as to its accuracy. The material and opinions in the paper should not be used or treated as professional advice and readers should rely on their own enquiries in making any decisions concerning their own interests.

2 CONTENTS 1 Overview & References When is residential premises commercial residential premises? Private Binding Rulings, Public Rulings and Ability to Rely on Them Consequences of Incorrect Historical GST Treatment Partnerships Residential Premises & Commercial Residential Premises CASE STUDY: PART Questions CASE STUDY: PART CASE STUDY: PART CASE STUDY: PART GST & Partnerships with Property CASE STUDY QUICK DIVERSION: Quick Question/Straw Poll (we ll come back if there is time) CASE STUDY PARTNERSHIP ISSUES Questions Partnership Dissolution CASE STUDY PARTNERSHIP CONTINUATION? Question - Continuation Appendix Selected Legislation INCOME TAX ASSESSMENT ACT A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT A NEW TAX SYSTEM (GOODS AND SERVICES TAX) REGULATIONS TAXATION ADMINISTRATION ACT SCHEDULE Ken Fehily

3 1 Overview & References The case studies in this paper are intended to extract some issues in dealing with properties that 16 years are not always clear in practice. Whether by shifting sands of interpretation by the courts or ATO, legislative change or simply entrenched practices. The first case studies are driven by Ken Fehily and are focused on the blurring on lines between residential premises and commercial residential premises. Whilst it is perhaps not capable of a bright line test, more defined delineation would be useful. When the GST legislation was written in 2000, a distinction was made between concessionally input taxed residential premises and taxable commercial residential premises. Since then, a new offering has arisen in the marketplace, which is a hybrid or middle of the road being serviced apartments, due to consumer demand, the proliferation of high tower apartments buildings and the escalation of small scale investor landlords. They are like normal residential premises (ie apartments), but available for 1 night stays, and often co-ordinated by an aggregated operator, sometimes acting as agents and sometimes as principals, and with the provision of varying levels of services'. As this new offering can have characteristics anywhere between an individual apartment rented by an individual landlord through to a full service hotel chain, difficulties are arising in determining whether they fall into the category of residential premises or commercial residential premises. To address the emerging offering, and case law over the years, the ATO issued GSTR 2012/6 to replace GSTR 2000/20. The ATO also seems to have moved from a position of the difference being primarily one of physicality, to one of physicality but with greater weighing being given to the level of services and nature of the provider. Consideration must therefore be given to the validity of past private binding rulings, the superseding of the original 2000 ruling in 2012, and the consequences (past 4 years and going forward) of a taxpayer now treating the GST in a manner that is inconsistent with the current ATO views. The second set of case studies are driven by Scott McGill and focus on the specific issues impacting partnerships in a GST context. ATO rulings provide some guidance for both tax law partnerships and general law partnerships, which is sometimes trickier in practice. Is it the rulings or the underlying scheme of the legislation that provides difficulties? These will be an interactive workshop style session - Ken and Scott will present together and will be assisted and kept to account by Hoa Wood to provide the ATO perspective. We may not solve all issues, but hope to generate some healthy discussion, refine the issues and perhaps make some progress toward agreed outcomes. At the very least we will all learn something. All references are to A New Tax System (Goods & Services tax) Act 1999 (GST Act) unless otherwise noted. 1.1 When is residential premises commercial residential premises? a. Background to nature of housing, and changes since 2000 b. Section c. Section definitions of residential premises and commercial residential premises Ken Fehily

4 d. EEC Southbank Decision Impact Statement (to be attached) e. Extracts of GSTR 2002/2 and GSTR 2012/6 (to be attached) 1.2 Private Binding Rulings, Public Rulings and Ability to Rely on Them a. Schedule 1 to Taxation Administration Act 1953 (TAA) Sections , , Consequences of Incorrect Historical GST Treatment a. Sections 93.5, , , , b. TAA Sections ,105.55,105.65, , , c. Also consider Section 129 and Partnerships a. Section 195-1>>s995-1 Income Tax Assessment Act 1997 definition partnership b. Division 184 in particular 184-1(e) and 184-5(1) c. Division 40 A New Tax System (Goods & Services Tax) Regulations 1999 (GST Regs) in particular and Item 10 in the table to (3) and Schedule 7, Part 8, Item 7 to the Table. d. GSTR 2003/13 Goods and services tax: general law partnerships Ken Fehily

5 2 Residential Premises & Commercial Residential Premises 2.1 CASE STUDY: PART 1 Background (5 minutes) Nature of accommodation and living styles, past, present and future. Fact Scenario 1 (15 minutes) Consider a luxury 30 story tower of 130 fully self-contained, 1 and 2 bedroom strata titled apartments. Each is separately metered for water and electricity and each has their own ground floor post boxes. Each apartment has one car space and half have a caged storage area in the basement. There are 3 spaces for the concierge/caretaker and tradespersons. The front entry hallway/lobby sliding doors open automatically by movement sensors between 8.00am and 8.00pm. Card keys are issued for each apartment to the apartment owners to enable access to the particular floor on which their apartment is located, their individual apartments, common property facilities, underground car park and to access the entry hallway/lobby outside the above hours. There are luxurious common property facilities available only to owners and occupants of the apartments, including: gym, pool, 2 individual showers and sauna room (no towels provided) lounge with a library, chairs and lounges, large TV and free tea and coffee making facilities roof deck with chairs, lounges and umbrellas 24-hour concierge/caretaker (more than one, taking shifts) located at a desk located in the front entry hallway/lobby The Owners Corporation pays the wages of concierge/caretaker. Their tasks include: doing or contracting out maintenance, cleaning and repairs (daily and scheduled) of all common property and facilities dealing with complaints or requests in relation to the common property, noise or behaviour of other owners or occupants or those not abiding by the rules of the Owners Corporation maintain a presence at the front desk to greet residents, take messages, receive deliveries or hold things for pick up, and to provide access to the entry hallway/lobby after hours taking calls from apartment owners (each apartment has an intercom that connects to the front desk, but cannot be used to make apartment to apartment, nor external, calls) assisting owners to arrange and allow access for contractors for cleaning services or repairs to owners individual apartments, at owners own expense Since it is in the Gold Coast, half of the owners are permanent owner occupiers. The other half occupy their apartments intermittently or allow their relatives and friends use their apartments. Some rent their apartments out long or short term to the public directly, through an accommodation website, AirBnb or through local real estate agents. The concierge provides card keys to non-owners if requested and pre-arranged by the owner, provides recommendations and brochures about local eateries and entertainment, and makes Ken Fehily

6 bookings for the owners or occupants on their behalf. Take away and delivered food are accepted by the concierge who holds them at the desk for collection, or if not busy, sometimes delivers it to the apartment. All such extras are paid for directly by the owner or occupant. The Owners Corporation has, as part of the common property, its own small kitchenette (for the concierge/caretaker and cleaning contractors to use, and to supply the tea and coffee to the lounge), and a small laundry to deal with and store materials used by the concierge/caretaker and contractors to meet their maintenance, cleaning and repair responsibilities Questions Question 1. Are the premises commercial residential premises? Question 2. Are the rentals by the owners supplies of input taxed residential accommodation, or taxable residential accommodation in commercial residential premises? Assumptions: Most owners own only 1 apartment, but some hold 2 or 3, and a few own between 5 and 10 apartments. The GST registration threshold of $75,000 is met and assume that the owner treats the rental as the carrying on of an enterprise and declares revenue and expenditure for income tax purposes. That is so we keep focus on the issue of whether the premises are commercial residential premises or not. 2.2 CASE STUDY: PART 2 Alternative Fact Scenarios (15 minutes) Would your answer be different if some, or a combination, or all of the following circumstances arose? Most of the front of the ground floor facing the street, with the exception of the entry to the front hallway/lobby to access the apartments and common property, comprises 8 strata titled business premises (dry cleaner, pizzeria, classy restaurant, tour and travel company, Registered Tax Agent, newsagent and an art gallery? There is a separate Owners Corporation for those 8 business premises, and they have no rights or access to the apartment common property or its facilities (except for 2 car spaces each in the underground basement). It can be assumed that the owners and occupants of the apartment tower are regular customers of those businesses, often arranged through the concierge. The costs of all is borne directly by the owners and occupants, but it is likely that the concierge is looked after by those businesses for making referrals (eg maybe a free pizza occasionally or a tip from the owner or occupant). The concierge/caretaker responsibilities of the Owners Corporation are eventually subcontracted out to an experienced service company ( contract provider ) that provides other Owners Corporations, other serviced apartments owners and some hotels with similar services, and has access to better aggregated buying power for materials and contract cleaners and tradesmen ( contract provider ). Ken Fehily

7 The contract provider gradually starts to offer other services, all from the front desk, such as: a. Using its own website to rent out, short and long term, the apartments (and sometimes car spaces) on behalf of the owners. It eventually organises the payments for the rental income as agent of the owner to come through its own account and settles that with the owner monthly, keeping a commission. b. Regular or ad hoc cleaning, maintenance and repair services to the individual apartment owners, as principal, issuing a regular monthly bill c. Arranging services for the owners and occupants, from the businesses downstairs and other local businesses, pays for them as agent and renders a monthly account to the owner, or at the end of the stay by short term occupants, plus a commission often called charge backs on the invoices. An owner of 10 apartments, and an owner of 5 apartments, decide to leave Australia for an extended period, and to rent their apartments to the contract provider, under Residential Tenancy Agreements, for 2 years, plus 2 by 2 year options. Those apartments and associated car spaces are then rented out by the contract provider as principal. Due to demand and full occupancy (by owners and renters) the front desk is replaced by a small expresso bar (sells only coffee and cake) with 2 small table/chair arrangements. The contract provider s business has grown and now provides similar services to 4 other apartments within a 3-minute walk, and has bought the strata title unit from the tour company. The contract provider now operates all of the services from that unit, and no longer has a concierge permanently stationed inside any of the 4 apartment buildings, and when required, a concierge from the unit will walk to the relevant apartment building to assist (the intercoms from the apartments are now diverted to contractor s unit). As the contractor s unit is under and in front of only one of the 4 apartment buildings, is there a different answer for the other 3 apartment buildings? 2.3 CASE STUDY: PART 3 If an apartment owner received a Private Binding Ruling stating that the accommodation it supplied was input taxed residential accommodation in early 2012 (e.g. 2 months prior to the issue of GST 2012/6), could it be protected after the issue of GSTR 2012/6? Same question for the contractor? (5 minutes) 2.4 CASE STUDY: PART 4 If the owner or contract provider does not have a private ruling, what types of consequences could arise for the past 4 years if the supplies of accommodation were incorrectly treated as input taxed (when they are taxable) or incorrectly treated as taxable (when they are input taxed)? (5 minutes) Ken Fehily

8 3 GST & Partnerships with Property To keep things less confusing let us adopt the same facts as for example 2.1 and following 130 rooms in residential apartment complex with 8 commercial units, which will include the classy restaurant that is accessible from the lobby of the building for residents. Let s also assume that the facilities are capable of being run as short term holiday accommodation if a suitable operator was installed. However, they main difference to Ken s examples is that construction is not yet complete, not all core services are in place and occupancy certificate/s have not yet been issued. Ownership of the freehold is held in shares under the Mosque Partnership by Pauline Pantsdown Developments Pty Ltd (PPD) and Climate Change is Real Ltd (CCR), a NFP organisation. An independent building company has been engaged to construct and costs to date are $66million with some $6million in GST claimed by the Mosque Partnership to date. Estimated costs to complete are however modest at $11million including GST, however off the plan sales of the subject Nirvana building have been slow and the Greens Hotels Group has offered to lease or manage all apartments on completion. But all is not well between PPD and CCR and CCR has expressed a desire to exit the development on suitable terms due to the poor rating of the building for energy and renewables. 3.1 CASE STUDY QUICK DIVERSION: A slight diversion from the Partnership issue in a complete sell out of its principles, but to provide urgent funding to complete, PPD agrees to a deal brokered by CCR with The Greens Hotel Group Ltd (Greens) to: Sell 65 of the 130 residential units in one line to the Greens on completion. Make available the remaining 65 residential units to the Greens to be used in their ecoholiday program under an agency agreement for a minimum of two years and requires 6 months notice by either party to terminate. The Mosque Partnership is allowed to sell the retained units, provided the purchaser retains them in the available pool for the 2 years and agrees to similar 6 months notice. It intends to retain these units on the market and sell at what is considered an acceptable price Quick Question/Straw Poll (we ll come back if there is time) Question 1 What is the nature of the supply by sale of 65 of the 130 units in one line? - Does it make a difference if the strata plan is not yet in place? - What if the arrangement includes access to use and control of the reception area, manager s residence, sporting facilities and restaurant for a fixed period? - What if the strata is in place? Ken Fehily

9 Ken Fehily & Scott McGill Question 2 What is the nature of the supply by the Partnership of apartments to be managed for short term hotel style accommodation by Green Hotels as agent? - Does it make a difference if the strata plan is not yet in place? - What if the arrangement includes access to use and control of the reception area, manager s residence, sporting facilities and restaurant for a fixed period? - What if the strata is in place? 3.2 CASE STUDY PARTNERSHIP ISSUES PPD & CCR are on civil terms but as a NFP entity, CCR is keen to realise its interest and apply the funds to urgent works in the Pacific Islands where rising sea levels are causing problems. In principle they work out a deal based on valuing the partnership interests at land $10m plus construction works at cost $60m, less bank facilities and other creditors of $30m. It is noted that there remains $11m including GST to spend to reach completion, however PPD is confident that there are funding options open to them, even if they have to cut a deal with the Greens. CCR wishes to walk away with no further involvement asks that as part of the deal, title is transferred to PPD. The essence of the deal is as follows: The partnership accounts are to be adjusted to reflect this valuation and result in net capital accounts of $20m each. A dissolution agreement is to be drawn up to terminate the partnership on completion of: o Payment of $20m to CCR, being the balance in their capital account o Transfer of title to PPD Suitable indemnities are put in place to protect CCR from creditors and in respect of the bank finance. These facilities are not changed pending the Greens stepping in to save PPD and the Nirvana development Questions Partnership Dissolution Question 1 You have been asked to advise what are the GST consequences and options available on the transfer of property? In providing this advice you should consider: Is this a dissolution? What is the nature of the supply of 50% of the property? Ken Fehily

10 Ken Fehily & Scott McGill Who is making that supply? What is the taxable value? What happens to ITC s already claimed? Future? Question 2 Would it make a difference if PPD was acting as agent for a group of dispirit, faceless investors in the Kaos Partnership? In providing your advice, consider: Can we have a technical dissolution Can the Mosque partnership continue with same ABN/GST? 3.3 CASE STUDY PARTNERSHIP CONTINUATION? PPD decides on your advice that the Mosque Partnership will continue and subsumes the Kaos Partnership members into it. For continuity of the sales process, branding, location of sales office, staff, contractors, building company and building name will remain the same as if there has been no change Question - Continuation You have been asked by the Mosque Partnership to set out the GST consequences of this and advise detail on how they should proceed: You should address and consider: Can they continue to trade with the same TFN, ABN and GST registration? What are the GST consequences of this? What is the nature of the supply of the interests/property? Who is making those supplies? Are there any adjustment events? Can the reconstituted partnership continue to claim ITC s? What is the nature of future supplies? Ken Fehily

11 4 Appendix Selected Legislation 4.1 INCOME TAX ASSESSMENT ACT 1997 SECTION "partnership " means: (a) an association of persons (other than a company or a * limited partnership) carrying on business as partners or in receipt of * ordinary income or * statutory income jointly; or (b) a limited partnership. 4.2 A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 SECTION Sales of residential premises (1) A sale of * real property is input taxed, but only to the extent that the property is * residential premises to be used predominantly for residential accommodation (regardless of the term of occupation). (2) However, the sale is not input taxed to the extent that the * residential premises are: (a) * commercial residential premises; or (b) * new residential premises other than those used for residential accommodation (regardless of the term of occupation) before 2 December 1998 SECTION Refunding the excess GST For the purposes of each * taxation law, so much of the excess from subsection 142-5(1) (the excess GST ) as you have * passed on to another entity is taken to have always been: (a) payable; and (b) on a * taxable supply; until you reimburse the other entity for the passed-on GST. Note 1: If you reimburse the passed-on GST so that this section ceases to apply there will be an adjustment event under paragraph 19-10(1)(b) or (c). You will have a decreasing adjustment (see section 19-55) and the other entity may have an increasing adjustment (see section 19-80). Note 2: Any excess GST you have not passed on will be refunded as described in section in Schedule 1 to the Taxation Administration Act Note 3: While this section applies, paragraph 11-5(b) (about taxable supplies) is satisfied for the corresponding acquisition by the other entity. SECTION When section does not apply Ken Fehily

12 Commissioner satisfied it is inappropriate for that section to apply (1) Treat section as never having applied to the extent that the Commissioner is satisfied that: (a) applying that section would be inconsistent with the principle that excess GST is not to be refunded if this would give an entity a windfall gain; and (b) you have requested a decision under this subsection in the * approved form. Note: Refusing to make the requested decision is a reviewable GST decision (see Subdivision 110-F in Schedule 1 to the Taxation Administration Act 1953 ). (2) The Commissioner must notify you in writing of any decision relating to you made under subsection (1). If there never was a supply (3) Treat section as never having applied to the extent that: (a) you treated the excess GST as payable on a supply, but in fact there never was a supply; and (b) you reimburse the other entity for the * passed-on GST. Note: If you reimburse the passed-on GST, you will be refunded an equivalent amount as described in section in Schedule 1 to the Taxation Administration Act So far as it relates to your creditable acquisitions (4) Section does not apply for the purposes of applying subsection 11-15(2) (about creditable purpose) to you. If the recipient knows you have not paid the excess GST (5) Section does not apply for the purposes of applying a * taxation law to the other entity if, and while, that other entity knows, or could reasonably be expected to have known, that you have not paid the excess GST to the Commissioner. Note: Section still applies for the purposes of applying taxation laws to you. SECTION Working out if GST has been passed on (1) Some or all of an amount of GST may have been passed on to another entity even if: (a) a * tax invoice is not issued to or by that other entity; or (b) a tax invoice issued to or by that other entity relates to that GST, but does not contain enough information to enable that GST to be clearly ascertained. (2) If: (a) you issue a * tax invoice to another entity, or another entity issues a * recipient created tax invoice to you; and (b) the invoice contains enough information to enable some or all of an amount of GST to be clearly ascertained; and (c) in a case where you must pay the * assessed net amount for a tax period to which the invoice relates--you have paid that assessed net amount to the Commissioner; the invoice is prima facie evidence of that part of that GST having * passed on to that other entity. Note: The special rules in this Part mainly modify the operation of Part 2-5, but they may affect other Parts of Chapter 2 in minor ways. SECTION Entities (1) Entity means any of the following: (a) an individual; (b) a body corporate; (c) a corporation sole; (d) a body politic; (e) a * partnership; (f) any other unincorporated association or body of persons; (g) a trust; (h) a * superannuation fund. Ken Fehily

13 Note: The term entity is used in a number of different but related senses. It covers all kinds of legal persons. It also covers groups of legal persons, and other things, that in practice are treated as having a separate identity in the same way as a legal person does. SECTION Supplies etc. by partnerships and other unincorporated bodies (1) For the avoidance of doubt, a supply, acquisition or importation made by or on behalf of a partner of a * partnership in his or her capacity as a partner: (a) is taken to be a supply, acquisition or importation made by the partnership; and (b) is not taken to be a supply, acquisition or importation made by that partner or any other partner of the partnership. Note: Section in Schedule 1 to the Taxation Administration Act 1953 deals with the liability of partners for the obligations imposed on a partnership under the GST law. SECTION "commercial residential premises " means: (a) a hotel, motel, inn, hostel or boarding house; or (b) premises used to provide accommodation in connection with a * school; or (c) a * ship that is mainly let out on hire in the ordinary course of a * business of letting ships out on hire; or (d) a ship that is mainly used for * entertainment or transport in the ordinary course of a * business of providing ships for entertainment or transport; or (da) a marina at which one or more of the berths are occupied, or are to be occupied, by * ships used as residences; or (e) a caravan park or a camping ground; or(f) anything similar to * residential premises described in paragraphs (a) to (e) "partnership " has the meaning given by section of the * ITAA "residential premises " means land or a building that: (a) is occupied as a residence or for residential accommodation; or (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation;syd (regardless of the term of the occupation or intended occupation) and includes a * floating home. 4.3 A NEW TAX SYSTEM (GOODS AND SERVICES TAX) REGULATIONS TAXATION ADMINISTRATION ACT SCHEDULE 1 SECTION Time limit on recovery by the Commissioner (1) Any unpaid * net amount, * net fuel amount or amount of * indirect tax (together with any relevant * general interest charge under this Act) ceases to be payable 4 years after it became payable by you. (2) If: Ken Fehily

14 (a) an amount was paid to you, or applied under Division 3 of Part IIB of this Act, as: (i) a refund in relation to a * net amount, * net fuel amount or amount of * indirect tax; or (ii) an amount of indirect tax that was overpaid or wrongly paid; and (b) that amount exceeded the amount (if any) that you were entitled to be paid, or to have applied under Division 3 of Part IIB of this Act; the amount of the excess (together with any relevant * general interest charge under this Act) ceases to be payable 4 years after it became payable by you. (3) However, subsection (1) does not apply to an amount, and subsection (2) does not apply to an amount of an excess, if: (a) within those 4 years the Commissioner has required payment of the amount or the amount of excess by giving a notice to you; or (b) the Commissioner is satisfied that: (i) the payment of the amount was avoided by fraud or evaded; or (ii) the payment of the amount of excess, or its application under Division 3 of Part IIB of this Act, was brought about by fraud or evasion. Sunsetting provision (4) This section applies in relation to payments and refunds that: (a) relate to * tax periods, and * fuel tax return periods, that start before 1 July 2012; or (b) do not relate to any tax periods or fuel tax return periods, but relate to liabilities or entitlements that arose before 1 July Note: This section will be repealed on 1 January 2017: see Part 2 of Schedule 1 to the Indirect Tax Laws Amendment (Assessment) Act SECTION Time limit on refunds etc. from the Commissioner (1) You are not entitled to a refund, other payment or credit to which this subsection applies in respect of a * tax period or importation unless: (a) within 4 years after: (i) the end of the tax period; or (ii) the importation; as the case requires, you notify the Commissioner (in a * GST return or otherwise) that you are entitled to the refund, other payment or credit; or (b) within that period the Commissioner notifies you (in a notice of assessment or otherwise) that you are entitled to the refund, other payment or credit; or (c) in the case of a credit--the credit is taken into account in working out: (i) a * net amount or * net fuel amount that the Commissioner may recover from you only because of subparagraph (3)(b)(i); or (ii) an amount of excess referred to in subsection (2) that the Commissioner may recover from you only because of subparagraph (3)(b)(ii). Note: Division 93 of the GST Act puts a time limit on your entitlement to an input tax credit. Division 47 of the Fuel Tax Act 2006 puts a time limit on your entitlement to a fuel tax credit. (2) Subsection (1) applies to: (a) a refund in relation to a * net amount or * net fuel amount in respect of a particular * tax period; or (aa) another payment that represents some or all of an amount: (i) that you paid as an amount of * indirect tax payable by you in respect of a particular tax period; and (ii) that exceeded the amount (if any) of such tax that you were liable to pay in respect of that tax period; or (b) an * input tax credit or * fuel tax credit that is attributable to a particular tax period; or (c) a * wine tax credit the amount of which could have been included in a reduction of your * net amount for a tax period under section of the * Wine Tax Act; or Ken Fehily

15 (d) a refund of an amount of * indirect tax relating to an importation. (2A) A request by you to the Commissioner to treat a document as a * tax invoice for the purposes of attributing a credit to a * tax period is taken to be a notification, for the purposes of paragraph (1)(a), of your entitlement to the credit if: (a) you made the request within the 4 year period referred to in that paragraph in relation to the credit; and (b) the Commissioner agrees to the request (whether or not within that period). Fuel tax--non-business taxpayers (3) If you are neither * registered for GST nor * required to be registered for GST, you are not entitled to a refund, other payment or * fuel tax credit to which this subsection applies in respect of a * fuel tax return period, acquisition, manufacture or importation unless: (a) within 4 years after: (i) the end of the fuel tax return period; or (ii) the acquisition, manufacture or importation; (as the case requires) you notify the Commissioner that you are entitled to the refund, other payment or credit; or (b) within that period the Commissioner notifies you (in a notice of assessment or otherwise) that you are entitled to the refund, other payment or credit; or (c) in the case of a fuel tax credit--the credit is taken into account in working out: (i) a * net fuel amount that the Commissioner may recover from you only because of subparagraph (3)(b)(i); or (ii) an amount of excess referred to in subsection (2) that the Commissioner may recover from you only because of subparagraph (3)(b)(ii). Note: Division 47 of the Fuel Tax Act 2006 puts a time limit on your entitlement to a fuel tax credit. (4) Subsection (3) applies to: (a) a refund in relation to a * net fuel amount attributable to a * fuel tax return period; or (b) a * fuel tax credit for * taxable fuel that you acquire, manufacture or import. (5) To avoid doubt, if, under subsection (3), you are not entitled to a * fuel tax credit, then you are not entitled to a refund or other payment in relation to the credit. Sunsetting provision (6) This section applies in relation to payments and refunds that: (a) relate to * tax periods, and * fuel tax return periods, that start before 1 July 2012; or (b) do not relate to any tax periods, or fuel tax return periods, but relate to liabilities or entitlements that arose before 1 July Note: This section will be repealed on 1 January 2017: see Part 2 of Schedule 1 to the Indirect Tax Laws Amendment (Assessment) Act SECTION Restriction on GST refunds (1) The Commissioner need not give you a refund of an amount to which this section applies, or apply (under Division 3 or 3A of Part IIB) an amount to which this section applies, if: (a) you overpaid the amount, or the amount was not refunded to you, because a * supply was treated as a * taxable supply, or an * arrangement was treated as giving rise to a taxable supply, to any extent; and (b) the supply is not a taxable supply, or the arrangement does not give rise to a taxable supply, to that extent (for example, because it is * GST-free); and (c) one of the following applies: (i) the Commissioner is not satisfied that you have reimbursed a corresponding amount to the recipient of the supply or (in the case of an arrangement treated as giving rise to a taxable supply) to an entity treated as the recipient; (ii) the recipient of the supply, or (in the case of an arrangement treated as giving rise to a taxable supply) the entity treated as the recipient, is * registered or * required to be registered. Ken Fehily

16 Note: Divisions 3 and 3A of Part IIB deal with payments, credits and RBA surpluses. (2) This section applies to the following amounts that relate to a * tax period starting on or before the day the Tax Laws Amendment (2014 Measures No. 1) Act 2014 receives the Royal Assent: (a) in the case of a * supply: (i) so much of any * assessed net amount or amount of * GST as you have overpaid (as mentioned in paragraph (1)(a)); or (ii) so much of any assessed net amount that is payable to you under section 35-5 of the * GST Act as the Commissioner has not refunded to you (as mentioned in paragraph (1)(a)), either by paying it to you or by applying it under Division 3 of Part IIB of this Act; (b) in the case of an * arrangement: (i) so much of any assessed net amount or amount of GST to which subparagraph (a)(i) would apply if the arrangement were a supply; or (ii) so much of any assessed net amount to which subparagraph (a)(ii) would apply if the arrangement were a supply. Note: Division 3 of Part IIB deals with payments, credits and RBA surpluses. (3) The Commissioner must notify you in writing of any decision relating to you made under subsection (1) after the day mentioned in subsection (2). (4) You may object, in the manner set out in Part IVC, against a decision you are dissatisfied with that was made under subsection (1). Note: This section will be repealed on 1 July 2018: see Part 3 of Schedule 2 to the Tax Laws Amendment (2014 Measures No. 1) Act SECTION When rulings are binding on the Commissioner (1) Subject to subsection (5), a ruling binds the Commissioner in relation to you (whether or not you are aware of the ruling) if: (a) the ruling applies to you; and (b) you rely on the ruling by acting (or omitting to act) in accordance with the ruling. (3) The * GST payable on a * supply or importation is the amount worked out in accordance with a ruling (if any) that: (a) relates to the GST payable on the supply or importation; and (b) binds the Commissioner in relation to the supplier or importer. SECTION Commissioner may apply the law if more favourable than the ruling (1) The Commissioner may apply a relevant provision to you in the way it would apply if you had not relied on a ruling if: (a) doing so would produce a more favourable result for you; and (b) the Commissioner is not prevented from doing so by a time limit imposed by a * taxation law. (2) The Commissioner does not have a duty to consider whether to apply subsection (1) to you, whether he or she is requested to do so by you or by any other entity SECTION Inconsistent rulings (1) The rules in this table have effect if: (a) a ruling and a later ruling both apply to you; and (b) the 2 rulings are inconsistent. However, the rules in the table only apply to the extent of the inconsistency, and do not apply to * indirect tax or excise rulings. Inconsistent rulings (other than indirect tax or excise rulings) Ken Fehily

17 Item If the earlier ruling is: And the later inconsistent ruling is: The result is: 1 A * public ruling Any ruling You may rely on either ruling. 2 A * private ruling or an * oral ruling A private ruling or an oral ruling If you informed the Commissioner about the existence of the earlier ruling when you applied for the later ruling, the earlier ruling is taken not to have been made. Otherwise, the later ruling is taken not to have been made. 3 A * private ruling or an * oral ruling A * public ruling The earlier ruling is taken not to have been made if, when the later ruling is made: (a) the income year or other period to which the rulings relate has not begun; and (b) the * scheme to which the rulings relate has not begun to be carried out. Otherwise, you may rely on either ruling. (1A) If: (a) 2 inconsistent * indirect tax or excise rulings apply to you; and (b) the rulings are both * public rulings; then, to the extent of the inconsistency, you may rely on either of the rulings. (1B) If: (a) 2 inconsistent * indirect tax or excise rulings apply to you; and (b) at least one of the rulings is not a * public ruling; then, to the extent of the inconsistency: (c) the later ruling is taken to apply from the later of: (i) the time it is made; and (ii) the time (if any) specified in the ruling as being the time from which it begins to apply; and (d) the earlier ruling is taken to cease to apply at that later time. (2) If 3 or more rulings apply to you and the rulings are inconsistent, apply the rules in this section to each combination of 2 rulings in the order in which they were made. Ken Fehily