Private ruling: Does a certain enterprise need to be registered for GST?
Date of advice: 15 May 2019
Published: June 2019

Ruling: Q1: Is Entity A required to be registered for GST? | A1: No, Entity A is not required to be registered for GST

Relevant facts and circumstances: Entity A acquired an asset and used it to carry on activities which constituted an enterprise. Entity A anticipated it would earn income which would require it to be registered for GST. Entity A was registered for GST, but made profits in a range of $XX (well below $75,000). Entity A subsequently made a private ruling application to determine if it could deregister.

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 23-15 | A New Tax System (Goods and Services Tax) Regulations 1999

Reasons for decision: Summary: Section 23-5 of the GST Act requires an entity to be registered for GST if the entity is: 1. carrying on an enterprise, and 2. meets the registration turnover threshold The registration turnover threshold is defined in section 23-15 of the GST Act. In this case Entity A satisfies the first requirement of section of 23-5. However, Entity A expects to earn no more than $XX (well below $75,000) through its activities in the coming year. When the requirements of subsection 23-15 (1) are applied as well as the relevant Regulations, the turnover threshold applicable to Entity A is $75,000. Since Entity A is earning substantially less than $75,000 it does not satisfy the second requirement of section 23-5 listed above and consequently it is not required to be registered for GST.