Private ruling: GST and tax invoices
Published: June 2013

Ruling: Q1: Can you retain the monthly statements only instead of each of the individual tax invoices? | A1: Refer to the Reasons for decision.

Relevant facts and circumstances: You are a service company for a small group of retailers. You are registered for GST. You are having difficulty with storage for one of the main suppliers to the retailers given the amount of invoices you receive per month per store. The main supplier is ABC Co and each month approximately XXX invoices are received per store with the number of pages per invoice could be up to YY pages. This leaves you with massive amounts of paper work to box up and store considering that it is only from one supplier. ABC Co issues you with a very detailed statement each month for each store. You have assessed the statement against the requirements of a tax invoice and found that the only item missing from the statement is the item purchased and the quantity purchased. You have provided a copy of a monthly statement in support of this.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 subsection 29-70(1). | A New Tax System (Goods and Services Tax) Act 1999 subsection 29-70(1B). | Income Tax Assessment Act 1936 section 262A. | Taxation Administration Act 1953 Schedule 1 section 382-5.

Reasons for decision: Summary: Generally, one of the requirements for a recipient of a supply to claim an input tax credit for a creditable acquisition is that you must hold a tax invoice as evidence of the acquisition when you lodge your activity statement. Subsection 29-70(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) sets out the minimum information requirements for a tax invoice. Subsection 29-70(1B) of the GST Act gives the Commissioner the discretion to treat a document that does not satisfy the tax invoice requirements as a tax invoice. The Commissioner will exercise this discretion on a case by case basis. There are a number of factors that the Commissioner will consider in the exercise of this discretion which are explained in Practice Statement Law Administration PS LA 2004/11. These factors are not exhaustive and there may be other circumstances that are relevant in a particular case. Paragraph 17 of PSLA 2004/11 states that the discretion must be exercised in a balanced way which is consistent with the Taxpayer's Charter and the Compliance Model, and that gives due weight to the importance of tax invoices as key integrity measures. PS LA 2004/11 provides that in order for the Commissioner to exercise the discretion, the ATO must be satisfied that the following conditions have been satisfied: · the recipient has made reasonable attempts to request the tax invoice · it is reasonable to conclude from the available evidence that the recipient has made a creditable acquisition, and · the recipient has a particular document that may be treated as a tax invoice. In your case, at the time of the acquisition, the supplier has issued you with a tax invoice which would enable you to claim the input tax credit in the relevant tax period. As the supplier has provided you with a tax invoice, there would be no need to request the Commissioner to exercise his discretion to treat a particular document, being the monthly statement, as a tax invoice. You have advised that the reason you would like to keep the monthly statement instead of the individual tax invoices is because of the difficulty you face in storing a large volume of tax invoices from your main supplier. You should note that an entity is required to keep business records in accordance with the various taxation laws. The general record keeping provisions are contained in section 262A of the Income Tax Assessment Act 1936 Income Tax Assessment Act 1936 (ITAA 1936) and section 382-5 of Schedule 1 to the Taxation Administration Act 1953 (TAA). Section 262A of the ITAA 1936 requires a person carrying on a business to keep records that record and explain all transactions and other acts engaged in by the person that are relevant for any purpose of the Act. Section 382-5 of the TAA addresses keeping records of indirect tax transactions. Subsection 382-5(1) requires that an entity: keeps records that record and explain all transactions and other acts you engage in that are relevant to a supply, importation, acquisition, dealing, manufacture or entitlement to which the subsection applies; and retain those records for at least 5 years after the completion of the transactions or acts to which they relate. Further, subsection 382-5(3) of the TAA provides that if an entity gives the Commissioner a return that takes into account an input tax credit that is attributable to a tax period the entity must keep records that record and explain all transactions and other acts relevant to the acquisition or importation in question and retain those records for at least 5 years after the return was given to the Commissioner. Section 382-5 of the TAA is similar in effect to section 262A of the ITAA 1936. Accordingly we consider that the general principles of record keeping that applies for income tax purposes are applicable for GST purposes. Taxation Ruling TR 96/7 provides guidance on section 262A of the ITAA 1936. Paragraph 52 of TR 96/7 states: 52. We recognise the difficulties that some persons have in retaining large volumes of paper records and the compliance costs associated with this. They may want to retain the information contained in those records in a more convenient form, e.g., microfilm, microfiche and CD ROM. Section 25 of the Acts Interpretation Act 1901 defines the word 'record', where it appears in any Act, as including information stored or recorded by means of a computer. Taxation Ruling TR 2005/9 provides further guidance on electronic records. In your case, to comply with the requirement to keep adequate records under section 382-5 of the TAA, you must keep the tax invoices for at least 5 years after the tax period in which you claimed the input tax credit. The ATO accepts the imaging of paper records onto an electronic storage medium provided that the electronic copies are a true and clear reproduction of the original paper records. All rulings referred to above are available at the ATO website www.ato.gov.au