ATO ID 2003/1014: GST and grouping of two individuals
Date of decision: 4 July 2003
Business line: Indirect Tax

Issue
Do entity A and entity B, both individuals, satisfy the membership requirements of a GST group under section 48-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision
No, entity A and entity B do not satisfy the membership requirements of a GST group under section 48-10 of the GST Act, as a GST group cannot consist solely of individuals.

Facts
Entity A and entity B are Australian resident individuals who are registered for goods and services tax (GST). Entity A and entity B have the same tax periods and account for GST on the same basis. Neither entity belongs to any other GST group nor do they have any branches that are registered under Division 54 of the GST Act.

Reasons for decision
Summary: Section 48-10 of the GST Act sets out the membership requirements of a GST group. In relation to an individual, they must: Entity A and entity B are registered for GST, have the same tax periods, account for GST on the same basis, are not members of another GST group and do not have GST branches registered. Therefore, entity A and entity B will satisfy the membership requirements, if they each satisfy the requirements specified in the GST Regulations. Regulation 48-10.04 of the GST Regulations specifies the membership requirements that must be satisfied for an individual to be a member of a GST group. It provides that an individual may be a member of a GST group where it satisfies one of the following requirements: It is clear from this that, for an individual to be a member of a GST group, the group must have at least one member that is a company, a partnership or a trust. The proposed GST group will consist of only entity A and entity B who are individuals. There are no members of the proposed GST group that are a company, partnership or trust. Therefore, entity A and entity B do not satisfy the requirements under regulation 48-10.04 of the GST Regulations. Accordingly, entity A and entity B do not satisfy the membership requirements of a GST group under section 48-10 of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 48-10 Division 54 section 190-5
Subject references: Goods and services tax GST special rules GST branches GST groups GST regulations GST tax periods