Under reforms contained in a new exposure draft, the Commissioner will have up to 60 days to hold activity statement refunds – including other indirect taxes such as luxury car tax, wine equalisation tax, etc - while verifying the claims made.
The Government is planning to rush these amendments through as quickly as possible following the Full Federal Court decision in the Commissioner of Taxation v Multiflex Pty Ltd  FCAFC 142). In this case, the Court held that the GST law does not allow the Commissioner extra time to investigate whether a refund is payable to the taxpayer.
The new rules provide the Commissioner with the discretion to retain refunds for a period of time in order to verify the refunds being claimed.
Certain criteria need to be met before the Commissioner can withhold the refunds. The proposed changes will apply to GST refunds as well as other indirect tax refunds that would normally be claimed through activity statements.
These changes are expected to apply from the date of royal assent.
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Last updated March 2012. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.