Private ruling: GST and methodology to determine the extent of creditable purpose of acquisitions
Date of advice: 18 December 2019
Published: January 2020
Ruling period: tax periods commencing on or after 1 January 2020

Ruling: The Commissioner issued a revised private ruling that the taxpayer's apportionment methodology is not a fair and reasonable basis for determining the extent of creditable purpose (ECP) of its acquisitions because the methodology does not give a fair and reasonable reflection of the extent of the relevant relationships between acquisitions and supplies made by the taxpayer. | The taxpayer's methodology calculates an ECP rate for a cost centre that is then used as a fundamental building block throughout its methodology and therefore impacts on numerous other aspects of the methodology. Therefore, it is not possible to conclude that the methodology as a whole is fair and reasonable


Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 11 - 5 | A New Tax System (Goods and Services Tax) Act 1999 section 11 - 15 | A New Tax System (Goods and Services Tax) Act 1999 section 15 - 5 | A New Tax System (Goods and Services Tax) Act 1999 section 15 - 10 | Taxation Administration Act 1953 subsection 359 - 55(1) of Schedule 1 | Taxation Administration Act 1953 subsection 359-55(5) of Schedule 1


NOTICE: This is an edited version of a revised private ruling. It replaces the edited version of the private ruling with the authorisation number 66212.