Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Amendment Determination (No. 1) 2010

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Legislation au F2010L02954 Not in force Legislative Instrument

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Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Amendment Determination (No.1) 2010

 

Explanatory Statement

 

General Outline of Instrument
1. This instrument is made under subsection 29-10(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 Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Legislative Instrument (No.2) 2008 (F2008L03348).

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the existing legislative instrument includes a reference to paragraph 51-5(1)(c) of the GST Act which has now been repealed. 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 Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Legislative Instrument (No.2) 2008.

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 29-10(3) of the GST Act, the Commissioner may determine in writing that taxpayers may claim input tax credits without holding a tax invoice in certain circumstances.

14. The existing legislative instrument allows a registered entity that holds a Visa Purchasing Card (a cardholder) to claim input tax credits without holding a tax invoice in certain circumstances. One of the requirements that has to be satisfied before a cardholder can attribute input tax credits without holding a tax invoice is that the cardholder must be a qualifying cardholder.

15. The definition of qualifying cardholder in the existing legislative instrument includes a card holder that 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. 

16. 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.

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

Consultation
18. 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: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Amendment Determination (No.1) 2010 was enacted to ensure consistency between the Goods and Services Tax (GST) Act 1999 and the previously established legislative instrument, the Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Legislative Instrument (No.2) 2008. This amendment was necessary because the 2008 instrument contained a reference to a repealed section of the GST Act, specifically paragraph 51-5(1)(c), which previously required entities to seek the Commissioner's approval to form a GST joint venture. The 2010 amendment addresses this by updating the legislative instrument to reflect the 2010 changes in the GST Act, which allow entities to self-assess their eligibility to form a GST joint venture and notify the Commissioner instead of seeking approval. The instrument was made under subsection 29-10(3) of the GST Act by the Commissioner of Taxation and applies retrospectively to avoid disadvantaging taxpayers due to the changes in the GST Act. The policy objective is to streamline the process for entities forming GST joint ventures while ensuring compliance with the tax requirements.

Scope and Application

This instrument amends the Goods and Services Tax: Waiver of Tax Invoice Requirement (Visa Purchasing Card) Legislative Instrument (No.2) 2008 to align it with amendments to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), which came into effect on 1 July 2010. The amendment ensures that the legislative instrument remains consistent with changes to the GST Act, particularly those relating to the self-assessment of eligibility for forming a GST joint venture, which replaced the previous requirement for Commissioner approval. The instrument applies retrospectively to avoid disadvantaging taxpayers due to the legislative changes. It applies to registered entities that hold a Visa Purchasing Card and wish to claim input tax credits without holding a tax invoice, ensuring these entities can continue to meet the criteria for claiming input tax credits under the updated GST Act provisions. The amendments do not substantially change the law but are necessary to maintain the integrity and functionality of the legislative framework governing GST joint ventures and tax invoice requirements.

Key Provisions

The main operative sections of this legislation (subsection 29-10(3) of the A New Tax System (Goods and Services Tax) Act 1999) allow the Commissioner to determine that taxpayers may claim input tax credits without holding a tax invoice in certain circumstances. Specifically, the legislation pertains to the waiver of the tax invoice requirement for registered entities holding a Visa Purchasing Card (referred to as cardholders). Under this provision, a cardholder may claim input tax credits without holding a tax invoice if they meet certain criteria, such as being a qualifying cardholder. The legislation is updated to reflect changes in the GST Act that took effect on 1 July 2010, particularly regarding the self-assessment of eligibility for forming a GST joint venture. The Act imposes several obligations on the parties it governs. Firstly, cardholders must ensure that they meet the criteria for being a qualifying cardholder to claim input tax credits without holding a tax invoice. This includes complying with any requirements related to being nominated as a joint venture operator in a GST joint venture, if applicable. Secondly, entities that form a GST joint venture must now self-assess their eligibility and notify the Commissioner of the joint venture details in the approved form, rather than seeking prior approval from the Commissioner. The legislation is designed to ensure these entities remain compliant with the updated GST Act requirements. Breaching the requirements of this legislation can lead to various consequences. While the explanatory statement does not detail specific offences or penalties, it is reasonable to infer that non-compliance with the GST Act generally can result in penalties. Under the GST Act, penalties can include fines, interest on unpaid GST, and potentially legal action by the Commissioner. The maximum penalties for serious or repeated breaches can be significant, reflecting the importance of adhering to the Act's provisions. Additionally, any failure to correctly claim input tax credits or to notify the Commissioner of GST joint ventures as required could result in audits, investigations, and further enforcement actions by the Australian Taxation Office.

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Commencement Provisions
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