A New Tax System (Goods and Services Tax) (Simplified Method to Apportion Input Tax Credits for Caravan Park Operators Who Input Tax Supplies of Long-term Accommodation) Determination 2001/1
I, GEOFFREY MILLS, Assistant Commissioner, Goods and Services Tax, and delegate of the Commissioner of Taxation, make this Determination under subsection 11-30(5) of the A New Tax System (Goods and Services Tax) Act 1999.
Dated 23rd August 2001
Signed by Geoffrey Mills
Assistant Commissioner, Goods and Services Tax
Contents
Page
Part 1 Preliminary 2
1.1 Name of Determination 2
1.2 Commencement 2
1.3 Definitions 2
1.4 Information about the simplified method 3
Part 2 Simplified method to apportion input tax credits 4
2.2 Scope of the simplified method 4
2.3 Method to apportion input tax credits 4
Part 1 Preliminary
Do not delete : Division Placeholder
1.1 Name of Determination
This Determination is the A New Tax System (Goods and Services Tax) (Simplified Method to Apportion Input Tax Credits for Caravan Park Operators Who Input Tax Supplies of Long-term Accommodation) Determination 2001/1.
1.2 Commencement
This Determination commences on 1 July 2001.
1.3 Definitions
In this Determination:
GST Act means the A New Tax System (Goods and Services Tax) Act 1999.
Industry factor means 1.75%
Non-capital acquisitions means acquisitions of things that are not capital assets or improvements to capital assets
Short-term accommodation means caravan park accommodation that is not long-term accommodation.
Other expressions in this Determination have the same meaning as in the GST Act.
1.4 Information about the simplified method to apportion input tax credits for caravan park operators who have chosen to input tax supplies of long-term accommodation
Under subsection 11-30(5) of the GST Act, the Commissioner may determine in writing one or more ways in which to work out, for the purpose of subsection 11-30(3), the extent to which a creditable acquisition is for a creditable purpose.
Section 87-25 of the GST Act operates so that a supplier of long-term accommodation in commercial residential premises (for example, a caravan park) may choose not to treat its supplies of long-term accommodation as taxable. If this choice is made, paragraph 40-35(1)(b) of the GST Act treats supplies of long-term accommodation as input taxed.
Caravan park operators, who treat supplies of long-term accommodation as input taxed and who also make taxable supplies (such as short-term accommodation and shop sales), must apportion their inputs as they cannot claim input tax credits for acquisitions relating to the input taxed supplies. Where an acquisition (for example, a general overhead expense) is only partly creditable because it relates to making both taxable and input taxed supplies, the extent of creditable purpose must be calculated.
GST Ruling GSTR 2000/15 provides a number of suggested apportionment methods. However, the methods in that Ruling may not always give a fair result for caravan park operators.
As an alternative to the methods of apportionment in GSTR 2000/15, this simplified method to apportion input tax credits will assist those operators that input tax supplies of long-term accommodation.
Part 2 Simplified method to apportion input tax credits
Some terms in this determination are shown in bold italics when first used. They are explained in the Definitions section.
2.1 Eligibility
A caravan park operator is eligible to use this simplified method to apportion input tax credits if:
- it makes supplies of both long-term accommodation and short-term accommodation in the same premises; and
- it has chosen under section 87-25 of the GST Act, that Division 87 does not apply to any supplies of commercial accommodation that it makes.
2.2 Scope of the simplified method
(1) What is covered by the simplified method
The simplified method provided by this Determination applies to non-capital acquisitions that are partly creditable, that is, those acquisitions that relate to making supplies of long-term accommodation and other supplies including short-term accommodation.
(2) What is not covered by the simplified method
The simplified method provided by this Determination does not apply to capital acquisitions or acquisitions that are not partly creditable.
2.3 Method to apportion input tax credits
For a tax period, input tax credits on acquisitions to which this Determination applies are apportioned under this Determination by ;
- subtracting an amount equal to the income from long-term accommodation multiplied by the industry factor from
- the amount of GST payable on the supply of those acquisitions.
The resultant amount is the extent to which input tax credits can be claimed in respect of the acquisitions for a creditable purpose.
Overview
The A New Tax System (Goods and Services Tax) (Simplified Method to Apportion Input Tax Credits for Caravan Park Operators Who Input Tax Supplies of Long-term Accommodation) Determination 2001/1 was enacted to address the specific issue faced by caravan park operators who input tax their supplies of long-term accommodation while also making taxable supplies such as short-term accommodation and shop sales. This determination was made under subsection 11-30(5) of the A New Tax System (Goods and Services Tax) Act 1999 by Geoffrey Mills, Assistant Commissioner of Goods and Services Tax, and delegate of the Commissioner of Taxation. The policy objective of this legislation is to provide a simplified method for these operators to apportion their input tax credits fairly, as the existing methods in GST Ruling GSTR 2000/15 might not always yield a fair result for them. This determination offers an alternative approach to those covered by GSTR 2000/15, ensuring that caravan park operators can accurately claim input tax credits for their partly creditable acquisitions.
Scope and Application
The A New Tax System (Goods and Services Tax) (Simplified Method to Apportion Input Tax Credits for Caravan Park Operators Who Input Tax Supplies of Long-term Accommodation) Determination 2001/1 applies to caravan park operators who are registered or required to be registered for GST and who have chosen to input tax their supplies of long-term accommodation under section 87-25 of the GST Act. This determination provides a simplified method for such operators to apportion their input tax credits for non-capital acquisitions that are partly creditable, that is, those acquisitions relating to both long-term and other supplies such as short-term accommodation. The simplified method does not apply to capital acquisitions or acquisitions that are not partly creditable. The apportionment is done by subtracting an amount equal to the income from long-term accommodation multiplied by the industry factor from the amount of GST payable on the supply of those acquisitions. The resultant amount is the extent to which input tax credits can be claimed for a creditable purpose. This Determination applies nationally across Australia as it is made under the Commonwealth GST Act.
Key Provisions
The A New Tax System (Goods and Services Tax) (Simplified Method to Apportion Input Tax Credits for Caravan Park Operators Who Input Tax Supplies of Long-term Accommodation) Determination 2001/1 provides a simplified method for caravan park operators to apportion input tax credits for their non-capital acquisitions that relate to making supplies of long-term accommodation and other supplies, such as short-term accommodation (sections 2.2 and 2.3). This method is an alternative to the methods provided in GST Ruling GSTR 2000/15 and is designed to ensure a fair result for operators who input tax their supplies of long-term accommodation.
Caravan park operators who are eligible to use this simplified method must make supplies of both long-term and short-term accommodation in the same premises and must have chosen not to treat their supplies of commercial accommodation under Division 87 of the GST Act (section 2.1). The simplified method applies to non-capital acquisitions that are partly creditable, meaning they relate to both taxable and input taxed supplies. However, it does not apply to capital acquisitions or acquisitions that are not partly creditable (section 2.2).
To apportion input tax credits under this simplified method, the operator must subtract an amount equal to the income from long-term accommodation multiplied by the industry factor (1.75%) from the amount of GST payable on the supply of the partly creditable acquisitions (section 2.3). The industry factor is a percentage determined by the Commissioner and is used to calculate the extent to which input tax credits can be claimed for a creditable purpose.
The Determination does not explicitly outline specific obligations or requirements for the parties it governs. However, by using the simplified method, operators must ensure that they accurately calculate their input tax credits and apportion them according to the method provided in the Determination. Failure to do so may result in incorrect claims or credits, which could lead to penalties or other consequences under the GST Act.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the Determination itself. However, any incorrect claims or credits resulting from the improper application of the simplified method could potentially lead to penalties or other consequences under the GST Act. The maximum penalties for GST-related offences can vary depending on the nature and seriousness of the offence, but they can include fines and imprisonment in some cases. Operators are encouraged to seek professional advice to ensure they are correctly applying the simplified method and complying with their obligations under the GST Act.