Private ruling: GST and requirement to register for GST
Date of advice: 20 November 2018
Published: March 2019
Ruling period: None
Date scheme commenced: None

Ruling: Q1: Are you required to be registered for goods and services tax (GST) in relation to the activities of selling women clothes at various market stalls and supplying holiday accommodation? | A1: You are required to be registered for GST if your GST turnover meets the turnover threshold from your activities of selling women clothes at various market stalls and supplying holiday accommodation. Please refer to the reasons for decision.

Relevant facts and circumstances: Taxpayer is carrying on an enterprise of providing holiday accommodation and selling clothes at market stalls. Taxpayer is not registered for goods and services tax (GST). Taxpayer provides holiday accommodation by using their own properties and occasionally on behalf of one or two other owners. Meals are not provided and the property is advertised as holiday accommodation and pet friendly. The taxpayer markets the properties through their own website and other websites. The taxpayer also engaged in selling women clothes at various market places. The selling of women clothes has been restricted to some extent in the last couple of years due to the taxpayer’s health issues. The annual turnover from both activities is close to $XXX.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 188-10

Reasons for decision: Summary: Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you are required to be registered for GST if: (a) you are carrying on an enterprise; and (b) your GST turnover meets the registration turnover threshold. (The current registration turnover threshold is $75,000) In this case, the taxpayer is carrying on an enterprise of providing holiday accommodation and selling women clothes. Therefore, paragraph 23-5(a) of the GST Act has been satisfied. It should be determined whether the turnover from these enterprises carried on by the taxpayer would meet or exceed the GST registration turnover threshold of $75.000. Section 188-10 of the GST Act provides that you meet the GST turnover threshold if: ● your ‘current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your ‘projected GST turnover’ is below the turnover threshold; or ● your ‘projected GST turnover’ is at or above the turnover threshold. Paragraphs 11 and 12 of Goods and Services Tax Ruling: GSTR 2001/7 explains that ‘current GST turnover’ at any time during a particular month is the sum of the values of all the supplies that you made or likely to make during the current month and the preceding 11 months. And the ‘projected GST turnover’ at a time during a particular month is the sum of the values of all the supplies that you made or are likely to make, during that month and the next 11 months. The taxpayer is required to include all the supplies made in relation to their enterprises to calculate the GST turnover threshold. Based on the facts provided, the taxpayer may meet the GST turnover threshold of $75,000 from the supplies made in carrying on the enterprise of providing holiday accommodation and selling women clothes at various markets. Therefore, the taxpayer may be required to be registered for GST. Paragraph 16 of the GSTR 2001/7 states: 16. Whether you have a GST turnover that meets or does not exceed a particular turnover threshold depends on an objective assessment of your projected GST turnover and current GST turnover. An 'objective assessment' is one that a reasonable person could be expected to arrive at having regard to the facts and circumstances which apply to your enterprise at the relevant time. The Commissioner will accept your assessment of these turnovers unless he has reason to believe that your assessment was not reasonable. Under the GST Act there are obligations if a taxpayer meets or exceeds the GST registration turnover threshold. Therefore, the taxpayer should be aware of the relevant thresholds likely to affect the taxpayer and consider whether the taxpayer’s turnover may be sufficiently close to the relevant threshold to make a review prudent.