Private ruling: Goods and services tax (GST) by instalments
Date of advice: 16 February 2016
Published: March 2016

Ruling: Q1: Will the Commissioner exercise his discretion under section 162-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to allow the entity (you) to make a late election to pay goods and services tax (GST) by instalments for the financial year ending 30 June 2016? | A1: No, you are not eligible to pay GST by instalments under GST Act and therefore the Commissioner will not allow you to pay GST by instalments for the financial year ending 30 June 2016.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are registered for GST from 1 July 2015. Your GST turnover is less than $2 million. You report GST quarterly. You only have lodged your activity statement for the quarter ended 30 September 2015 You have requested the Commissioner to allow you to make late election to pay GST by instalments for the financial year ending 30 June 2016.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 162-5 | A New Tax System (Goods and Services Tax) Act 1999 Subsection 162-25(3) | A New Tax System (Goods and Services Tax) Act 1999 Section 162-30

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. An entity may make an election to pay GST by instalments if it satisfies the requirements set out in section 162-5 of the GST Act. The election is generally required to be made by 28 October of the relevant financial year. New businesses that become eligible to pay GST by instalments after this date may make an election by the date they are required to lodge a GST return for the tax period in which they become eligible. If an entity does not make an election to pay GST by instalments by 28 October (or later date for new businesses), the Commissioner has a discretion in subsection 162-25(3) of the GST Act to allow the entity to make a late election. While the Commissioner may allow a late election, the law does not give the Commissioner discretion to allow an entity to make an election to pay GST by instalments if the entity does not satisfy the eligibility requirements in section 162-5 of the GST Act. Section 162-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides the eligibility criteria to use option 3. To be eligible to elect to pay GST by instalments an entity must: • be a small business entity or if not a business, must be carrying on an enterprise with a GST turnover of up to $2 million; • not be on monthly tax periods; • have a current GST lodgement record of at least 4 months; • have lodgement of their GST returns up to date; and • not be in a net refund position (NRP). Our records indicate that you are registered for GST from 1 July 2015 and your current GST lodgement record does not cover a four month period. Therefore, you have not satisfied one of the eligibility criteria of option 3. Accordingly you are not allowed to pay GST by instalments for the financial year ending 30 June 2016.