The Government has today introduced into Parliament the Taxation Laws Amendment Bill (No. 8) 2000 containing minor and technical changes to improve the operation of the A New Tax System (Goods and Services Tax) Act 1999 and related legislation. As previously announced on 14 September 2000, these changes address issues that have been raised by tax practitioners, industry representatives, the Australian Taxation Office and some States and Territories.
The Bill contains no substantive policy issues, but there are several measures which increase administrative simplicity and compliance that will be welcomed by business. They include measures that:
- increase flexibility to revoke monthly tax period elections;
- change the way debts are offset against Business Activity Statement (BAS) refunds; and
- increase flexibility to cancel GST registrations.
Increased flexibility to revoke monthly tax period elections
Entities will generally lodge GST returns on a quarterly basis, although some entities are required to lodge monthly. Eligible entities may elect to account monthly by applying to the Commissioner of Taxation on the ABN application form. Under current arrangements, once this choice is made, the entity must use monthly tax periods for at least 12 months before it can apply to the Commissioner to revert to using quarterly tax periods. The Commissioner currently has no discretion to reduce this period.
This Bill will allow the Commissioner greater flexibility to revoke the monthly election and allow quarterly tax periods if the entity so requests. The Commissioner may backdate the effect of the revocation to 1 July 2000. This measure will substantially reduce the compliance costs of affected businesses and non-profit bodies by reducing the frequency with which these entities are required to account for GST.
Changes to the way debts are offset against Business Activity Statement (BAS) refunds
This Bill gives the Commissioner the discretion to be able to refund a running account balance surplus or credit rather than apply it against a tax debt (other than a BAS amount) that is due but not yet payable. The changes to the refunding of BAS amounts will ensure businesses benefit from receiving BAS refunds without having them offset against other debts that are due but not payable for up to several months after the BAS is lodged.
Increased flexibility to cancel GST registrations
An entity can choose to register for GST if it carries on an enterprise but its annual turnover is below the registration turnover threshold. Once an entity is registered for the GST, it must apply to the Commissioner if it wishes to have its registration cancelled. Under current provisions, the Commissioner cannot cancel an entity’s GST registration unless it has been registered for at least 12 months at the time of application.
This Bill allows the Commissioner, in certain circumstances, to cancel the GST registration of an entity where an application to cancel its registration has been made before the entity has been registered for 12 months. This measure takes effect from the date of Royal Assent and will avoid increased compliance costs for small businesses and non-profit bodies.