Karagounis and Commissioner of Taxation (Taxation and business)
[2024] ARTA 80
•11 December 2024
Karagounis and Commissioner of Taxation (Taxation and business) [2024] ARTA 80 (11 December 2024)
Applicant:Rebecca Karagounis
Respondent: Commissioner of Taxation
Tribunal Number: 2023/5244
Tribunal:General Member J Dunne
Place:Melbourne
Date:11 December 2024
Decision:The Tribunal affirms the decision under review.
.....................................[SGD]...................................
General Member J Dunne
Catchwords
TAXATION – Goods and Services Tax (GST) – input tax credits – whether the Applicant is entitled to claim input tax credits– Applicant filed GST returns and claimed input tax credits more than 4 years late – objection decision affirmed
Legislation
Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024 (Cth), Schedule 16, Part 5.
A New Tax System (Goods and Services Tax) Act 1999 (Cth), ss 9-30(2), 11-5, 11-15(2)(a), 93-5, 93-10, Division 40.
Taxation Administration Act 1953 (Cth), ss 14ZZK, 14ZZL, Schedule 1 ss155-10, 155-30, 155-35, 155-45, 155-50, 155-60(a), 155-60(b), 350-10, Division 286.
Charter of Human Rights and Responsibilities Act 2006 (Vic)
Cases
H&B Auto Repair Centre Pty Ltd and Commissioner of Taxation [2022] AATA 3561
JHKW and Commissioner of Taxation [2022] AATA 2875
Messenger Media and Information Technology Pty Ltd and Commissioner of Taxation [2023] AATA 752
Rosebridge Nominees Pty Ltd (in Liq) and Commissioner of Taxation [2019] AATA 426
SE Sedgwick & YE Sedgwick and Commissioner of Taxation [2015] AATA 690
Secondary Materials
Explanatory Memorandum, Indirect Tax Laws Amendment (Assessment) Bill 2012 (Cth)
Australian Taxation Office, Public Ruling MT 2024/D1
Statement of Reasons
ISSUE
On 23 November 2021, the Respondent (the ‘Commissioner’) disallowed the Applicant’s (‘Ms Karagounis’) objection dated 16 October 2021.[1] Ms Karagounis filed proceedings in this Tribunal on 13 July 2023.[2]
[1] T2, 017 and T18, 149.
[2] T1. This matter was originally filed in the Administrative Appeals Tribunal and has been transferred to this Tribunal, in accordance with Part 5 of Schedule 16 of the Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024 (Cth).
The issue for consideration by the Tribunal is whether Ms Karagounis is entitled to claim input tax credits totalling $10,680 for the goods and services tax (‘GST’) periods from 1 October 2015 to 31 March 2017 (inclusive).
BACKGROUND
Ms Karagounis was registered for GST from 1 July 2010 until 2 July 2023 and accounted for GST on a cash basis. Ms Karagounis operated a cleaning business called Special Cleaning and Painting.[3]
[3] T16, 097.
Ms Karagounis and the Commissioner agree that for the GST periods from 1 October 2015 to 31 March 2017, Ms Karagounis filed her GST returns late. The reason for this delay related to problems with Ms Karagounis’s then tax agent losing material, and health issues Ms Karagounis has suffered. After being approached by the Commissioner following up the late returns, Ms Karagounis contacted the Commissioner several times to explain those issues. The Commissioner has remitted some penalties as a consequence of those issues.[4]
[4] T16, 123 at [19] and as is demonstrable from the Statement of Account filed by the Commissioner on 18 November 2024 pursuant to a direction by the Tribunal.
The following table[5] sets out the periods, when the GST returns were due, when the returns were filed and the lateness of those returns. At the hearing there was no dispute as to these facts.
[5] Adapted from the Commissioner’s Submissions for Hearing on 15 November 2024, the Commissioner’s Statement of Facts, Issues and Contentions at [15], and the Commissioner’s objection decision at T2 [14].
GST period
Date GST return was due
Date it was filed
Extent to which the GST return is late
1 October 2015 to 31 December 2015
28 February 2016
10 July 2021
5 years, 4 months and 12 days
1 January 2016 to 31 March 2016
28 April 2016
10 July 2021
5 years, 2 months and 12 days
1 April 2016 to 30 June 2016
28 July 2016
10 July 2021
4 years, 11 months and 12 days
1 July 2016 to 30 September 2016
28 October 2016
10 July 2021
4 years, 8 months and 12 days
1 October 2016 to 31 December 2016
28 February 2017
10 July 2021
4 years, 4 months and 12 days
1 January 2017 to 31 March 2017
28 April 2017
10 July 2021
4 years, 2 months and 12 days
Ms Karagounis’s Application for Review, other correspondence and evidence before the Tribunal, and the Applicant’s Closing Submissions dated 18 November 2024 (‘Applicant’s Closing Submissions’) set out an array of serious allegations relating to the Commissioner. At the hearing it was explained to Ms Karagounis that the various allegations of maladministration, acting beyond powers (in terms of what Ms Karagounis described as ‘debt collection tactics’), dishonesty, fraudulent behaviour and corruption, allegations that the Commissioner owed her and breached a duty of care, allegations that the Commissioner did not take into account all relevant circumstances, allegations of abuse of power, issues of procedural fairness and allegations of breaches of natural justice, allegations relating to the management of and decision-making relating to her compensation claims,[6] and all other administrative review allegations are beyond the jurisdiction of the Tribunal. Those comments equally apply to submissions and allegations made in the Applicant’s Closing Submissions relating to procedural fairness, natural justice, duties of care, breaches of human rights etc. Ms Karagounis is encouraged by the Tribunal to seek legal advice and consider her position very carefully on those issues. I comment no further on those matters.[7]
[6] T16.
[7] The Tribunal notes that Ms Karagounis does not believe that the imposition of late lodgement penalties was lawful, and the Tribunal has taken that assertion as an administrative law ground as it related to other allegations about abuse of power. The Tribunal refers Ms Karagounis to Division 286 of Schedule 1 to the TAA which provides for such penalties.
The Tribunal notes that Ms Karagounis has added to her grounds of objection in the Applicant’s Closing Submissions by adding arguments relating to the Charter of Human Rights and Responsibilities Act 2006 (Vic). This legislation is state-based legislation and has no relevance to the application of the GST Act. I accept the Commissioner’s submission that on constitutional grounds alone, Ms Karagounis’s submissions would inevitably be rejected.[8] The Charter of Human Rights and Responsibilities Act 2006 (Vic) does not provide some all-encompassing discretion to either the Commissioner or the Tribunal to apply the federal taxation law differently than it is drafted.
[8] As well as on other grounds - Respondent’s Closing Submissions dated 29 November 2024 (Respondent’s Closing Submissions) [11]-[25].
Further, Ms Karagounis seems to be unaware of section 14ZZK of the Taxation Administration Act 1953 (Cth) (‘TAA’). That provision means that without an order of the Tribunal, Ms Karagounis is limited to the grounds of objection she raised in her objection dated 16 October 2021. The Tribunal has dealt with the Applicant’s Closing Submissions as if she was seeking an order to expand her grounds of objection. The Tribunal does not grant such an order. This is because Ms Karagounis’s submissions have no merit to the manner in which the GST Act operates, and, more particularly, it is beyond the Tribunal’s jurisdiction to consider grounds that are, in reality, administrative law grounds. I also accept the Commissioner’s submission that the Tribunal ought not to allow Ms Karagounis to add to her grounds of objection so late in this matter after the proceedings have ended.[9] I would urge Ms Karagounis to seek some legal advice before continuing to make submissions of this nature in future.
[9] Respondent’s Closing Submissions [3]-[4].
The Tribunal is empowered to review the Commissioner’s Objection Decision dated 23 November 2021 and Ms Karagounis is limited to the grounds of objection she initially raised on 16 October 2021. Ms Karagounis’s burden of proof in the proceedings before the Tribunal is to demonstrate that the assessments that she has objected to are excessive or otherwise incorrect and what they should have been.[10]
[10] Taxation Administration Act 1953 (Cth) s 14ZZK.
The case for the Commissioner
The Commissioner disallowed Ms Karagounis’s objection. The Commissioner relies upon section 93-5 of A New Tax System (Goods and Services Tax) Act 1999 (Cth) (‘GST Act’). That provision reads as follows:
Time limit on entitlements to input tax credits
(1) You cease to be entitled to an input tax credit for a creditable acquisition to the extent that the input tax credit has not been taken into account, in an assessment of a net amount of yours, during the period of 4 years after the day on which you were required to give to the Commissioner a GST return for the tax period to which the input tax credit would be attributable under subsection 29-10(1) or (2).
Note: Section 93-10 sets out circumstances in which your entitlement to the input tax credit does not cease under this section.
(2) This section has effect despite section 11-20 (which is about entitlement to input tax credits).
Note: You must hold a valid tax invoice relating to a creditable acquisition to be entitled to have an input tax credit for that acquisition taken into account in working out your assessed net amount for a tax period: see subsection 29-10(3).
The Commissioner’s case is that Ms Karagounis ceased to be entitled to the input tax credits because the input tax credits had not been “taken into account in an assessment of a net amount” during the period of “4 years after the day that [Ms Karagounis was] required [to file her GST returns].” Ms Karagounis accepted her input tax credit claims were made outside of that period. The Commissioner’s case is that it has no discretion to otherwise allow Ms Karagounis’s claimed input tax credits.
The case for Ms Karagounis
Ms Karagounis’s case relies upon the note at the end of subsection 93-5(1) of the GST Act. She says that the Commissioner’s amended assessments are excessive because the input tax credits that she claimed should have been allowed. That is because section 93-10 of the GST Act applies, and section 93-5 does not apply. Ms Karagounis also suggests that the TAA has an impact on this matter.
Section 93-10 of the GST Act reads as follows:[11]
[11] Ss 93-10(1), (2), (3) of the GST Act are all repealed.
Exceptions to time limit on entitlements to input tax credits
Amendment of assessments in relation to supplies
(4) You do not cease under section 93-5 to be entitled to an input tax credit if:
(a) the input tax credit is for a creditable acquisition that relates to making a supply; and
(b) during the period of 4 years mentioned in subsection 93-5(1), a net amount of yours is assessed on the basis that the supply is input taxed; and
(c) after the end of that 4-year period, the Commissioner amends the assessment of your net amount for the tax period to which the supply is attributable under section 155-35,155-45 or 155-50, or paragraph 155-60(a) or (b), in Schedule 1 to the Taxation Administration Act 1953 on the basis that the supply is not input taxed; and
(d) the input tax credit is taken into account in an assessment of a net amount of yours (the credit assessment):
(i) after the end of that 4-year period; and
(ii) at a time when the Commissioner may amend the assessment of your net amount for the tax period mentioned in subsection 93-5(1) of this Act (whether the credit assessment or another assessment) under Subdivision 155-B in Schedule 1 to the Taxation Administration Act 1953 on the basis that you are entitled to the input tax credit.
Request to treat document as tax invoice
(5) If:
(a) you requested the Commissioner to treat a document under subsection 29-70(1B) as a *tax invoice for the purposes of attributing an input tax credit to a tax period; and
(b) you made the request before the end of the 4-year period mentioned in subsection 93-5(1) in relation to the tax period; and
(c) the Commissioner agrees to the request after the end of the 4-year period;
you do not cease under section 93-5 to be entitled to the input tax credit to the extent that, had the Commissioner agreed to the request before the end of the 4-year period, you would not cease under that section to be entitled to the credit.
Ms Karagounis submitted both at the hearing and in the Applicant’s Closing Submissions that the Commissioner’s decision was wrong in law because sections 155-35,155-45, or 155-50, or paragraph 155-60(a) or (b) in Schedule 1 to the TAA applied.[12]
[12] Para 6(b) of the Applicant’s Closing Submissions.
In the Applicant’s Closing Submissions, Ms Karagounis also referred to section 384-10 and section 14ZZL of the TAA. She also claimed that because a notice of assessment was not given to her pursuant to section 155-10 of the TAA, the Commissioner’s actions were unlawful.[13] The Tribunal assumes that the references to sections 155-10 and 384-10 of the TAA, are references to those provisions in Schedule 1 to the TAA.
[13] Para 6 of the Applicant’s Closing Submissions.
REASONS FOR DECISION
The Commissioner’s decision is affirmed.
The text of section 93-5 of the GST Act could not be clearer. In evidence before the Tribunal Ms Karagounis agreed that she did not file returns for the relevant periods within 4 years after the day on which she was required to file those GST returns (the ‘entitlement period’). Ms Karagounis acknowledges she did not have input tax credits taken into account in an assessment of a net amount during the entitlement period. Ms Karagounis also did not have an extension of time to file her GST returns granted during that entitlement period.
As a consequence, section 93-5 provides that Ms Karagounis simply ceased to be entitled to those input tax credits.[14] The Tribunal has no discretion to allow otherwise.
[14] The following decisions are completely consistent on this point: Rosebridge Nominees Pty Ltd (in Liq) and Commissioner of Taxation [2019] AATA 426; SE Sedgwick & YE Sedgwick and Commissioner of Taxation [2015] AATA 690; JHKW and Commissioner of Taxation [2022] AATA 2875; H&B Auto Repair Centre Pty Ltd and Commissioner of Taxation [2022] AATA 3561; Messenger Media and Information Technology Pty Ltd and Commissioner of Taxation [2023] AATA 752. The Tribunal also notes that the Commissioner has issued draft guidance on section 93-5 of the GST Act – see MT 2024/D1.
The text of the provision is perfectly clear. There is no need to look beyond that text. For completeness however, even if the text of section 93-5 was unclear, the Explanatory Memorandum to the Indirect Tax Laws Amendment (Assessment) Bill 2012 (Cth) (‘Explanatory Memorandum’) demonstrates that when enacting section 93-5 that a cessation of entitlement to input tax credits after the expiry of the entitlement period was Parliament’s intention. The relevant parts of paragraph 1.35 of the Explanatory Memorandum provide:
1.35 ….[T]axpayers will cease to be entitled to credits if they have not been taken into account in an assessment of the net amount or net fuel amount during the period of four years after the date the return was required to be lodged for the tax period to which the credit would be attributable under subsections 29-10(1) and (2) of the GST Act, and subsections 65-5(1) and (2) of the Fuel Tax Act, subject to the exceptions provided for in Division 93 of the GST Act and Division 47 of the Fuel Tax Act.
In terms of Ms Karagounis’s arguments, they are without any merit. This is for the following reasons:
a.Subsection 93-10(4) applies only where all of paragraphs (a) to (d) are satisfied. This is demonstrable from the use of the word “and” at the end of each of the paragraphs.
b.Paragraph 93-10(4)(a) is satisfied (for the sake of argument). I have assumed that Ms Karagounis’s input tax credit claims relate to acquisitions from other parties that were creditable and related to her taxable supplies in her cleaning business.
c.Paragraph 93-10(4)(b) is not satisfied as during the period of four years after Ms Karagounis’s GST returns were required to be filed, a net amount was not assessed on the basis that any of the supplies made by Ms Karagounis were input taxed. As is noted above, Ms Karagounis admits she did not file the relevant returns during the entitlement period and there were no such assessments of a net amount during Ms Karagounis’s entitlement period. That alone means that paragraph 93-10(4)(b) is not satisfied.
d.There is also no evidence that Ms Karagounis made input taxed supplies. The meaning of input taxed supplies is set out in subsection 9-30(2) and Division 40 of the GST Act. Subsection 9-30(2) says that input taxed supplies are those specified in Division 40 or a supply of a right to receive such a supply. Division 40 of the GST Act sets out an array of supplies that are input taxed. These are financial supplies, the supply of certain premises by way of lease, hire or licence, the sale or long-term lease of residential premises, the supply of precious metals, supplies by school tuckshops or canteens, fund-raising events conducted by charities or gift-deductible entities, and particular inbound intangible consumer supplies covered by a Ministerial determination. Ms Karagounis did not, on the face of the evidence, make any such supplies. She supplied cleaning services. As is noted below, there is a difference between input tax credits and an input taxed supply. They are not the same thing.
e.Paragraph 93-10(4)(c) is not satisfied. It requires the Commissioner to amend Ms Karagounis’s assessments on the basis her supply is not input taxed. That is not what has happened here – there are no input taxed supplies by Ms Karagounis and that is not the basis of the Commissioner’s action. Ms Karagounis is confused about the difference between an input taxed supply and input tax credits. These are two completely different things as is demonstrated above. An input taxed supply is a specified type of supply under the GST Act. For subsection 93-10(4) to be relevant Ms Karagounis needed to make input taxed supplies. She did not. Input tax credits is a type of tax relief which allows Ms Karagounis to reclaim GST charged to Ms Karagounis for creditable acquisitions in her cleaning business. That is not the same thing as an input taxed supply.
f.Further, paragraph 93-10(4)(c) requires the Commissioner to amend an assessment or assessments under any of sections 155-35, 155-45 or 155-50, or paragraphs 155-60(a) or (b), in Schedule 1 to the TAA “on the basis that the supply is not input taxed”. Ms Karagounis requested that the Tribunal particularly consider the TAA references in paragraph 93-10(4)(c). Those TAA references do not help Ms Karagounis, as paragraph 93-10(4)(c) cannot apply to her. The TAA references are only relevant in that particular context (i.e., relating to input taxed supplies). The following is intended to assist Ms Karagounis’s understanding of the TAA provisions and no more than that. The comments below do not change the position that subsection 93-10(4) of the GST Act is not applicable to Ms Karagounis because she made no input taxed supplies, and as that is the case, the TAA references also do not apply. Section 93-5 is applicable, and Ms Karagounis has no entitlement to the input tax credits she has claimed:
i.Section 155-35 of Schedule 1 to the TAA provides that the Commissioner may amend an assessment within the period of review. The period of review is different to Ms Karagounis’s entitlement period in which she could claim input tax credits. For the Commissioner, the period of review for Ms Karagounis’s GST returns is 4 years from the date that the GST return was filed (up to 9 July 2025). The Commissioner has no power to amend assessments contrary to the law. This power to amend does not include the power to grant an entitlement to input tax credits where Ms Karagounis has ceased to be entitled to them as a result of the application of the GST Act. As stated above, this provision only applies in this context where subsection 93-10(4) of the GST Act applies to Ms Karagounis in any event, and it does not apply to Ms Karagounis because she made no input taxed supplies.
ii.Section 155-45 of Schedule 1 to the TAA provides that the Commissioner may amend an assessment where there has been an application by Ms Karagounis for an amendment in the approved form during the Commissioner’s period of review. This is not what has happened here. Ms Karagounis has objected. In any event, this does not give the Commissioner power to amend assessments contrary to the law nor to disregard the fact that subsection 93-10(4) of the GST Act does not apply to Ms Karagounis.
iii.Section 155-50 of Schedule 1 to the TAA provides that the Commissioner may amend an assessment to give effect to a private ruling. A private ruling is applied for under Division 359 of Schedule 1 of the TAA. There was no private ruling applied for nor issued here. In any event, this does not give the Commissioner power to amend assessments contrary to the law nor to disregard the fact that subsection 93-10(4) of the GST Act does not apply to Ms Karagounis.
iv.Paragraphs 155-60(a) and 155-60(b) of Schedule 1 of the TAA provide the ability for the Commissioner to amend assessments at any time to give effect to a decision on review or appeal or as a result of Ms Karagounis’s objection. The Commissioner has disallowed Ms Karagounis’s objection and there is no Court or Tribunal decision on review or appeal in Ms Karagounis’s favour. These provisions do not apply as a result. The Commissioner is not entitled to amend assessments contrary to the law and the Tribunal must also make decisions consistent with the law. Ms Karagounis’s entitlement to input tax credits has ceased as a consequence of section 93-5 of the GST Act. Neither the Commissioner nor the Tribunal has any discretion to say otherwise. The law is simply not as Ms Karagounis would wish it to be.
g.Paragraph 93-10(4)(d) also does not apply. It applies where the Commissioner took into account Ms Karagounis’s input tax credit claims in an assessment after the end of Ms Karagounis’s entitlement period. That is not what has happened here. Assessments issued by the Commissioner did not take into account those input tax credit claims, because Ms Karagounis ceased to be entitled to them.
h.Because all of paragraphs (a), (b), (c) and (d) of subsection 93-10(4) of the GST Act are not applicable to Ms Karagounis, subsection 93-10(4) does not apply to Ms Karagounis. The point of subsection 93-10(4) is clear.[15] Generally, taxpayers cannot claim input tax credits for acquisitions related to making input taxed supplies as those acquisitions are not ‘creditable’.[16] Subsection 93-10(4) of the GST Act ensures that input tax credits can be claimed in circumstances where the supply was incorrectly self-assessed as input taxed and subsequently amended by the Commissioner to be treated as not input taxed after the end of the taxpayer’s entitlement period. Those circumstances are not applicable here.
i.For completeness, subsection 93-10(5) does not apply to Ms Karagounis either. There was no request by Ms Karagounis relating to tax invoices, and nothing was done by Ms Karagounis during the entitlement period. All of the paragraphs in subsection 93-10(5) are required to be applicable to Ms Karagounis before subsection 93-10(5) would be relevant (as is demonstrable from the use of the word “and” at the end of each of the paragraphs). None of those paragraphs are applicable to Ms Karagounis. This provision is not relevant.
[15] Explanatory Memorandum, Indirect Tax Laws Amendment (Assessment) Bill 2012 (Cth) at [1.129].
[16] A New Tax System (Goods and Services Tax) Act 1999 (Cth) ss 11-5 and 11-15(2)(a).
For those reasons, section 93-10 does not apply to Ms Karagounis, and her arguments have no merit. Section 93-5 applies, and Ms Karagounis has no entitlement to input tax credits.
In terms of the other TAA references in the Applicant’s Closing Submissions these are also of no assistance to her:
a.Section 14ZZL of the TAA applies to require the Commissioner to implement a decision of the Tribunal when it becomes final. The Tribunal’s decision is that the Commissioner is correct. As there are no changes to the Commissioner’s objection decision, and the Commissioner’s decision stands.
b.Section 384-10 of Schedule 1 to the TAA has no relevance to this case – it is about superannuation guarantee education directions. If Ms Karagounis intended to refer to section 284-10 of Schedule 1 to the TAA, this is an objects clause which is about penalties other than late lodgement penalties which are dealt with in a different Division of Schedule 1 to the TAA. [17] It also has no relevance.
c.Section 155-10 of Schedule 1 to the TAA provides a requirement for the Commissioner to give a notice of assessment to a taxpayer “of an assessable amount” as soon as practicable after the assessment is made. An assessable amount includes an amount of indirect tax pursuant to subsection 155-5(2) of Schedule 1 to the TAA.
d.Subsection 155-10(2) of Schedule 1 provides that the Commissioner “may give you the notice electronically if you are required to lodge, or have lodged, the return … electronically”. That is what has happened here. Notice was given electronically.
e.Ms Karagounis says the Commissioner blocked access to her electronic tax records, so the notice was not given to her in that manner. The Commissioner denies this occurred. The evidence on the Tribunal files does not support Ms Karagounis’s position. All I have is her assertions and there is no other evidence. There could be confusion as to the manner of access, there could have been a temporary glitch, and in any event, notice being given requires appearance in Ms Karagounis’s account which I am satisfied occurred on the face of the evidence before the Tribunal. I also accept the Commissioner’s submissions to this effect.[18]
f.Even if it were the case that the Commissioner blocked Ms Karagounis’s electronic access (which is not accepted) or that a hard copy was required, the issue is whether Ms Karagounis was given notice “as soon as practicable” after the assessment was made: I find on the facts that she was.
g.As is demonstrable from the T documents, Notices of Amended Assessment were issued on 6 August 2021. As the returns were filed on 10 July 2021 and self-assessments issued as at that date, [19] the Notices of Amended Assessment dated 6 August 2021 were issued as soon as practicable. Ms Karagounis’s position is that the notices were not given to her at that time. There is no requirement for immediacy, merely as soon as practicable. Section 155-10 of Schedule 1 of the TAA appears in context with section 155-30 which refers to the ability for taxpayers to formally request the notice of assessment by written notice if it is not given to that taxpayer within 6 months of its issue. That context demonstrates that 6 months is outside the concept of as soon as practicable. The Tribunal does not have direct evidence of the exact date Ms Karagounis became aware of the detail of the Notices of Amended Assessment which could equate to when they were given to her. However, the T documents and Ms Karagounis’s correspondence demonstrate she was aware of the Notices of Amended Assessment at the latest by the time she filed her objection on 16 October 2021 – just over two months later (at worst case). I find that this delay would not be problematic for the Commissioner had written Notices of Amended Assessment been required, and this means section 155-10 of Schedule 1 of the TAA has been satisfied.[20]
h.Finally, the existence of a notice of assessment is conclusive proof it was properly made, pursuant to section 350-10 of Schedule 1 of the TAA.
[17] The Tribunal notes that Ms Karagounis does not believe that the imposition of late lodgement penalties was lawful, and the Tribunal has taken that assertion as an administrative law ground as it related to other allegations about abuse of power. The Tribunal refers Ms Karagounis to Division 286 of Schedule 1 to the TAA which provides for such penalties.
[18] Respondent’s Closing Submissions at [6].
[19] By virtue of subsection 155-15(4) of Schedule 1 to the TAA this self-assessment meets the requirements in section 155-10 of Schedule 1 to the TAA.
[20] As is noted above I do not accept Ms Karagounis was not given the notices of amended assessment electronically in any event.
The Tribunal’s view is that Ms Karagounis misunderstands the GST law. As is noted above, she has confused input taxed supplies with input tax credits when they are different things. In various documents filed at the Tribunal, Ms Karagounis has asserted that “[t]he ATO did not request any evidence from me showing that I have collected the GST on my invoice from my clients and I owe it to them” and maintains that the Commissioner moved GST “from purchases to sales.” [21]
[21] T1, 002.
For GST to be owing to the Commissioner, Ms Karagounis does not have to “pass on” GST in her invoices or collect GST from her clients. Suppliers may or may not add GST to their invoices to their clients and it is not a legal requirement that they do so. A liability for GST arises where there are taxable supplies (such as Ms Karagounis’s supply of cleaning services), and that liability arises no matter how the supplier chooses to invoice their clients.
Further, on the comment that the Commissioner moved GST from purchases to sales, clarification is needed. Taking a simple (but unreal) example, if Ms Karagounis obtained a GST input credit that was calculated at $20, her overall GST (say, $100) would reduce by that credit to $80 of GST. If that $20 was not actually available to Ms Karagounis, Ms Karagounis should have paid $100 GST (whether she passed on that GST to her clients in her invoices or not). In those circumstances the Commissioner will seek to claim the $20 from her. That is what has happened here. The Commissioner has disallowed input tax credits that Ms Karagounis is not entitled to, and that increases the GST payable by Ms Karagounis.
The Tribunal acknowledges Ms Karagounis’s circumstances have been difficult for her. The tax law can be confusing, and Ms Karagounis’s health issues have impacted her and her management of her tax issues adversely. The Tribunal encourages Ms Karagounis to continue to take the steps forward she has already taken to recover from these challenges. From the material before the Tribunal, it is clear that the Commissioner has tried to assist Ms Karagounis (including by penalty remissions) but may not have always given clear guidance to Ms Karagounis from her perspective. This has resulted in dissatisfaction.
The Tribunal has concluded that Ms Karagounis’s arguments have no merit and affirms the Commissioner’s objection decision. The Tribunal encourages Ms Karagounis not to ignore this matter and to instead continue to take steps to finalise it. With that in mind, Ms Karagounis and Respondent are encouraged by the Tribunal to engage with each other to discuss payment arrangements and for Ms Karagounis to be advised of other administrative processes (such as penalty or interest remission requests) to assist to finalise this matter.
DECISION
The Commissioner’s objection decision is affirmed.
I certify that the preceding 28 (twenty-eight) paragraphs are a true copy of the reasons for the decision herein of General Member J. Dunne
……………………[SGD]…………………………….
AssociateDated: 11 December 2024
Date of hearing: 15 November 2024 Applicant: Self-Represented Solicitors for the Respondent: Christopher Lee and Emily Keskovski, Australian Taxation Office
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