Goods and Services Tax: Recipient Created Tax Invoice Amendment Determination (No. 1) 2010

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Legislation au F2010L02949 Not in force Legislative Instrument

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Goods and Services Tax: Recipient Created Tax Invoice Amendment Determination (No.1) 2010  

 

Explanatory Statement

 

General Outline of Instrument
1. This instrument is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act).

2. The purpose of this instrument is to update the existing legislative instrument A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000 (F2006B11580).

3. The instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect
4. The instrument commences on 1 July 2010.

5. The instrument will apply retrospectively.

6. The instrument is amending the existing legislative instrument so that it is consistent with amendments made to the GST Act effective from 1 July 2010.  In particular, the existing legislative instrument includes a reference to paragraph 51-5(1)(c) of the GST Act which has now been repealed. 

7. If the amendments to the existing legislative instrument were not applied retrospectively, then it is possible that some taxpayers may be adversely impacted in that they will not be able to apply the provisions to their circumstances. As such, the instrument applies retrospectively to ensure that taxpayers will not be disadvantaged by the amendments to the GST Act.  The effect of the legislative instrument is to the advantage of affected parties.  Under section 12(2) of the Legislative Instruments Act 2003 this instrument does not adversely affect the rights or liabilities of any person other than the Commonwealth.

What this instrument is about
8. The purpose of this instrument is to update the existing legislative instrument A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000.

9. The GST Act was amended effective from 1 July 2010 to allow entities to self assess their eligibility to form a GST joint venture. Entities must notify the Commissioner of the details of the GST joint venture in the approved form. Prior to this amendment, entities were required to seek the Commissioner’s approval to form a GST joint venture.

10. This instrument amends the existing legislative instrument to ensure it is consistent with the amendments to the GST Act.

What is the effect of this instrument
11. The effect of this instrument is that the existing legislative instrument will be consistent with the GST Act.

12. Compliance cost impact: An assessment of the compliance cost impact indicates that the impact will be minimal for both implementation and on-going compliance costs. The instrument is routine in nature.   

Background
13. Under subsection 29-70(3) of the GST Act, the Commissioner may determine in writing that a 'tax invoice' belonging to a class of tax invoices that may be issued by the 'recipient' of a 'taxable supply' is a 'recipient created tax invoice'.

14. The existing instrument lists classes of tax invoices that may be issued by the recipient of a taxable supply. One of these classes is where the recipient is nominated in an application for approval of a GST joint venture to be the joint venture operator of the joint venture. Under the former paragraph 51-5(1)(c) of the GST Act, entities wanting to form a GST joint venture were required to apply to the Commissioner for approval of the joint venture as a GST joint venture. 

15. Under amendments to the GST Act that apply to tax periods starting on or after 1 July 2010, entities no longer need to seek the Commissioner’s approval to form a GST joint venture. Instead, entities can now agree in writing to the formation of a joint venture as a GST joint venture and the entity nominated in the agreement to be the joint venture operator must notify the Commissioner in the approved form of the details of the GST joint venture.

16. The amendments to the existing instrument are required to make it consistent with the amendments to the GST Act.

Consultation
17. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law. Extensive consultation in relation to the amendments to the GST Act was held prior to those amendments being introduced. As indicated above, this instrument is necessary to ensure that the existing legislative instrument is consistent with the GST Act. However, no other consultation was undertaken in relation to the development of the instrument as it is considered minor or machinery in nature, and does not substantially change the law.

 

Shane Reardon

Deputy Commissioner of Taxation

4 November 2010

 

Legislative references:

 

A New Tax System (Goods and Services Tax) Act 1999

Legislative Instruments Act 2003

 

Overview

The Goods and Services Tax: Recipient Created Tax Invoice Amendment Determination (No. 1) 2010 was enacted to amend the A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 1) 2000, thereby ensuring that the legislative instrument remains consistent with recent amendments to the GST Act. This instrument was introduced to address the gap caused by the repeal of paragraph 51-5(1)(c) of the GST Act, which previously required entities to seek the Commissioner’s approval to form a GST joint venture. The instrument was made under subsection 29-70(3) of the GST Act by the Commissioner of Taxation and aims to ensure taxpayers are not adversely affected by the amendments to the GST Act. The instrument applies retrospectively to 1 July 2010 to prevent taxpayers from being disadvantaged, ensuring that the legislative framework aligns with the updated GST Act provisions.

Scope and Application

The Goods and Services Tax: Recipient Created Tax Invoice Amendment Determination (No.1) 2010 amends the existing legislation to update the classes of recipient created tax invoices that can be issued under the A New Tax System (Goods and Services Tax) Act 1999. This instrument applies to entities that issue tax invoices, particularly those involved in forming a GST joint venture. It has a national reach as it pertains to the Commonwealth and aims to ensure consistency with the GST Act, which was amended effective from 1 July 2010. The instrument applies retrospectively to avoid disadvantaging taxpayers due to the changes in the GST Act. The amendment ensures that entities can now self-assess their eligibility to form a GST joint venture and notify the Commissioner in the approved form, without needing prior approval. This amendment reflects the legislative intent to streamline processes and reduce administrative burdens on entities involved in GST joint ventures.

Key Provisions

The main operative sections of the Goods and Services Tax: Recipient Created Tax Invoice Amendment Determination (No.1) 2010 include the definition of what constitutes a recipient created tax invoice (section 1) and the classes of such invoices (section 2). This instrument updates the existing Classes of Recipient Created Tax Invoice Determination (No. 1) 2000 to align with the amendments made to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) effective from 1 July 2010. Notably, the repeal of paragraph 51-5(1)(c) of the GST Act, which previously required entities to seek the Commissioner’s approval to form a GST joint venture, has been addressed in this instrument. The amendment ensures that entities can now self-assess their eligibility to form a GST joint venture and notify the Commissioner in the approved form. The obligations imposed by this Act on the parties it governs primarily involve ensuring that any recipient created tax invoices issued by entities comply with the updated classes as defined in the Determination. Specifically, entities that form GST joint ventures are required to notify the Commissioner of the joint venture details in the approved form, rather than seeking prior approval. This change streamlines the process for forming GST joint ventures and reduces the administrative burden on entities. Breaching the requirements set out in this Determination could result in various civil and criminal consequences. For instance, if an entity fails to issue a tax invoice that meets the criteria of a recipient created tax invoice as defined, it may be liable for penalties under the GST Act. The penalties can include fines and interest on unpaid tax, with the exact amount depending on the nature and severity of the breach. Additionally, entities that provide false or misleading information when notifying the Commissioner of a GST joint venture may face further penalties, including potential criminal charges for fraud. The maximum penalties for such offences are specified in the GST Act and can be significant, reflecting the seriousness of non-compliance with tax regulations.

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Taxation Law
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Legislative Instrument
Concepts
Commencement Provisions
Repeal & Amendment
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