Other GST matters

GST SPECIAL RETURNS

Clause 11

Submission
(Ernst & Young)

That the provision should apply prospectively only or, alternatively, there should be an amnesty from use of money interest and penalties for taxpayers who pay all outstanding amounts within one month of enactment of the current bill.

Comment

Officials consider this is a clear case where retrospective application is justified. The amendment is simply designed to clarify a due date for payment and correct an obvious legislative oversight. As the submitter has conceded, the current provision does not remove a creditor’s liability to pay the GST – its “failing” is that it arguably does not specifically state the due date for such a payment.

The practice of filing special returns and paying the appropriate GST has, so far as officials are aware, always been applied by taxpayers in a manner consistent with the policy intent of the provision – an intent that this amendment will reinforce. Given that officials are not aware of anyone actually being adversely affected by the retrospective nature of this provision, it is considered appropriate that the proposed application date be kept to provide clarity in the legislation through all tax periods.

Recommendation

That the submission be declined.

AMENDMENT TO THE REVERSE CHARGE PROVISION

Clause 7

Submission
(PricewaterhouseCoopers)

That the references to “use” should be to “taxable use” if the provision is to achieve the desired outcome.

Comment

The provision refers to “percentage intended use” and “percentage actual use”. These terms are defined in the bill and those definitions incorporate the notion of “taxable use”. Any change would take the words in the provision outside of the defined terms and potentially cause more confusion.

Recommendation

That the submission be declined.

RELATIONSHIP BETWEEN GST AND INCOME TAX

Clauses 25, 29 and 35

Submission
(Russell McVeagh)

That the clauses do not achieve their stated policy intent in every instance.

Comment

Officials agree that certain aspects of the clauses may make them difficult to apply in certain circumstances. Officials do not agree with all the suggested wording provided in paragraph 5.5 of the submission, but have worked with the submitter to produce revised drafting that should be universal in its application.

Recommendation

That the submission be accepted to the extent necessary to reflect the desired policy intent of the provisions.