Sales Tax Regulations (Amendment) 1991 No. 239
EXPLANATORY STATEMENT
STATUTORY RULES 1991 No. 239
Issued by the Authority of the Treasurer
Sales Tax Assessment Acts (Nos. 1-4 & 6-8) 1930
Sales Tax Assessment Act (No. 10) 1985
Sales Tax Regulations (Amendment)
Sales tax law previously required sales taxpayers to lodge returns and pay tax within 21 days after the close of the month in which a taxable dealing occurs. Sales Tax Laws Amendment Act (No. 2) 1991 amended the sales tax law to introduce a system of quarterly payments of sales tax for taxpayers whose annual sales tax liability for the previous financial year did not exceed the quarterly remitter threshold for the current year.
A person who is a quarterly remitter has the option of lodging returns and paying tax either on a quarterly or a monthly basis. However, a return must be lodged and all tax owing must be paid within 21 days after the end of a quarter on the taxable dealings that occurred in that quarter.
For various reasons taxpayers may overpay their sales tax and need to claim a refund of the overpaid amount. The Sales Tax Regulations set out the rules for claiming refunds of these amounts. To claim a refund the taxpayer must furnish a written statement to the Commissioner of Taxation. This statement may be furnished at the same time as the monthly return is lodged or within thirty days after the sale of the goods. The taxpayer may deduct the amount of the refund claimed from the monthly payment of tax that is due.
Taxpayers who remit monthly are entitled to claim refunds when they lodge monthly returns. The Sales Tax Regulations (Amendment) has amended the regulations to also allow quarterly remitters to claim refunds when they lodge their returns.
Details of the proposed regulations are as follows:
Regulation 1 provides that the amendments to the Sales Tax Regulations come into effect on 1 August 1991 which is the date the Sales Tax Laws Amendment Act (No. 2) 1991 comes into operation.
Regulation 2 provides that the Sales Tax Regulations are amended as set out in these Regulations.
Regulation 3 replaces subregulation 51(2) with a new subregulation 51(2). Paragraph (a) of that regulation allows a person who is registered for sales tax purposes to claim a refund of tax, where appropriate, at the time of lodging a monthly or a quarterly return. Paragraph 51(2)(b) allows an unregistered person to claim a refund within 30 days after the sale of the goods.
Regulation 52 allows a registered person who is claiming a refund to deduct the amount of the refund from the tax payable in respect of the monthly return with which the refund statement is lodged. Regulation 4 amended this regulation to allow a registered person to deduct the amount of the refund claim from a quarterly return.
Where the Commissioner, a Second Commissioner or a Deputy Commissioner is not satisfied that a refund is necessary or is satisfied that the amount of the refund is incorrect, regulation 54 requires that an adjustment be made by the sales taxpayer in the next monthly return. Regulation 5 amended that regulation to allow a quarterly remitter to make an adjustment in the next quarterly return.
Regulation 6 amended subregulation 55(1) to allow refunds in special cases to be deducted from each monthly return or each quarterly return as the case may be.
Overview
The Sales Tax Regulations (Amendment) 1991 No. 239 was enacted to address the issue of providing quarterly remitters with the flexibility to claim refunds of overpaid sales tax when lodging their returns, rather than being restricted to monthly returns only. This regulation was issued by the Australian Government under the authority of the Treasurer and came into effect on 1 August 1991, the same date as the Sales Tax Laws Amendment Act (No. 2) 1991. The policy objective of these amendments was to simplify the refund process for quarterly remitters, ensuring they could manage their tax obligations more effectively by aligning the refund claiming process with their payment schedule. This change aimed to reduce administrative burdens and provide more flexibility to those taxpayers who were eligible to remit their sales tax on a quarterly basis.
Scope and Application
The Sales Tax Regulations (Amendment) 1991 No. 239 applies to all taxpayers registered for sales tax purposes in Australia, including both businesses and individuals, who are subject to the Sales Tax Assessment Acts (Nos. 1-4 & 6-8) 1930 and the Sales Tax Assessment Act (No. 10) 1985. The amendment is particularly relevant for taxpayers who are classified as quarterly remitters, meaning those whose annual sales tax liability for the previous financial year did not exceed the quarterly remitter threshold for the current year. This regulation extends to the whole of Australia, as it is issued by the authority of the Treasurer and applies to the national jurisdiction. The regulation does not explicitly state any exclusions or exemptions; however, it is understood that unregistered persons may claim a refund within 30 days after the sale of the goods but are not covered by the same flexibility as registered entities in terms of claiming refunds at the time of lodging returns. The application of this Act is further extended and refined through subordinate instruments, which detail the specific processes and timelines for claiming and adjusting refunds.
Key Provisions
The Sales Tax Regulations (Amendment) 1991 No. 239 introduces key changes to the Sales Tax Regulations, primarily focusing on the refund process for sales taxpayers. Section 1 establishes that these amendments come into effect on 1 August 1991, aligning with the operation date of the Sales Tax Laws Amendment Act (No. 2) 1991. Section 2 indicates that the Sales Tax Regulations are amended as outlined in these regulations. Section 3 replaces subregulation 51(2), allowing registered sales taxpayers to claim refunds at the time of lodging either a monthly or a quarterly return. Unregistered persons are permitted to claim refunds within 30 days after the sale of goods (Section 3, paragraph (a) and (b)). Section 4 amends regulation 52 to enable registered persons to deduct the amount of the refund from their tax payable in respect of the monthly or quarterly return with which the refund statement is lodged.
The obligations imposed on taxpayers under these regulations include lodging returns and paying tax within 21 days after the end of a quarter for quarterly remitters or within 21 days after the close of the month for monthly remitters. Registered taxpayers can claim refunds at the time of lodging their returns, while unregistered persons must submit their refund claims within 30 days after the sale of goods. The Commissioner of Taxation retains the authority to assess the necessity and correctness of refund claims, and taxpayers must make any required adjustments in their next return, whether monthly or quarterly. Section 5 amends regulation 54 to allow quarterly remitters to adjust their tax in the next quarterly return if the Commissioner is not satisfied with the refund claim.
Failure to comply with the requirements set out in the Sales Tax Regulations (Amendment) 1991 No. 239 may result in various consequences. If the Commissioner of Taxation is not satisfied with a refund claim or believes the amount is incorrect, regulation 54 mandates that the taxpayer make an adjustment in their next return. For unregistered persons who fail to claim a refund within 30 days after the sale of goods, they may be unable to recover overpaid sales tax. Additionally, if taxpayers do not lodge their returns or pay the tax within the specified timeframes, they may face penalties under the Sales Tax Assessment Acts (Nos. 1-4 & 6-8) 1930 and the Sales Tax Assessment Act (No. 10) 1985. The specific penalties for non-compliance, including fines and interest on unpaid taxes, are governed by these primary Acts and not detailed in the regulations themselves.