How sure are you that your enterprise has not provided the
Commissioner of Taxation ("the Commissioner") with a
windfall gain of overpaid GST over the last four years?
The Commissioner has released the eagerly anticipated
Miscellaneous Taxation Ruling MT 2010/1 ("MT
2010/1") on 15 December 2010 and importantly provides
guidelines on the refund of GST amounts. It has significant
application to transactions that have inadvertently been classified
as subject to GST.
MT 2010/1 primarily deals with the Commissioner views on the
amended section 105-65 of Schedule 1 to the Taxation
Administration Act 1953. This section was amended (with
effect from 1 July 2008) as a result of the KAP Motors1
decision, which forced the Commissioner to refund overpaid GST on
situations where no supply occurred.
Most importantly for all GST registered entities, there has been
a significant "softening" of the Commissioner's
position within MT 2010/1, when compared to that taken in the
earlier draft version. It is now possible to obtain a refund if a
taxpayer can evidence that the overpaid GST was absorbed, rather
than passed on to its clients. The draft ruling imposed significant
hurdles in front of the entity that overpaid the GST, the most
cumbersome being that the overpaid GST must have been firstly
refunded to the recipient of the misclassified supply (your
In circumstances where the error has been made by the supplier,
the notion of refunding GST to the clients before having at least
confirmation that the Commissioner would pay the requested refund
compounds the issue you are facing. The alleged "windfall
gain" would then need to be extracted from the
Commissioner's coffers, otherwise you are out of pocket not
once, but twice. Nothing like placing all bets on
Of course, before seeking a refund, an overpayment must be
identified and the amount must be quantified, usually through the
undertaking of a review process. Once the overpaid GST has been
confirmed, a number of alternatives exist in order to notify the
Commissioner that a refund is due and payable.
The GST Consulting team operating from the Gold Coast office has
been involved in a number of similar processes and is well equipped
to handle the review process and the lodgement of the refund
notification with the Commissioner.
If you would like to discuss the issues raised within MT 2010/1,
or require any further details, please feel free to contact either
Jacques Vorster (GST Director) or Steve Visser (GST Manager) of the
Gold Coast office on (07) 5519 1000.
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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