TKGY and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered the dispute between TKGY (the Applicant) and the Commissioner of Taxation (the Respondent) concerning the Applicant's eligibility to claim input tax credits. The Applicant, incorporated in 2010 to provide tax accountancy services, had been involved in civil litigation from 2012 to 2017, leading to periods of suspension for its tax lodgements. Following its retrospective reinstatement by ASIC in October 2018, the Applicant lodged 29 Business Activity Statements (BASs) for periods between July 2011 and September 2018, claiming input tax credits totalling $8,497 for periods up to September 2014. The Respondent disallowed these claims, citing the four-year rule under section 105-55 of Schedule 1 to the Taxation Administration Act 1953 (Cth) and Division 93 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), as the claims were lodged outside the statutory time limits.

The Tribunal was required to determine whether the Applicant was eligible to claim input tax credits for the tax periods between 1 July 2011 and 30 September 2014, notwithstanding the lodgement of the BASs outside the prescribed four-year period. This involved considering the Applicant's activities, the operation of the GST Act concerning creditable acquisitions and attribution, and the specific timeframes for claiming input tax credits as stipulated by the relevant legislation. The Applicant contended that an adjustment event in 2017 clarified its entitlement to the input tax credits, and therefore, the four-year rule should be interpreted as commencing from that point, allowing for lodgement until February 2021.

The Tribunal found that while the Applicant was dissatisfied with the conduct of the Respondent's officers, it understood the basis of the Respondent's decision. The Applicant acknowledged that the input tax credits were not attributed to the periods in which they were claimed but rather should have been claimed in 2017. However, the Tribunal noted that the Applicant, as a provider of accounting services, was well aware of GST obligations and the four-year rule. The Applicant's argument that an adjustment event in 2017 meant the credits should be attributed to that year, thereby circumventing the four-year limitation, was not accepted. The Tribunal concluded that the Applicant had not discharged its onus to prove that the assessments were excessive or incorrect.

Accordingly, the Tribunal affirmed the decision under review, meaning the Respondent's disallowance of the input tax credits claimed by the Applicant for the periods between 1 July 2011 and 30 September 2014 was upheld.