Government Announcements
GST and incapacitated entities
06.02.2009
On 6 February 2009 the Assistant Treasurer announced that the Government proposes to amend the GST law, with retrospective effect from 1 July 2000, to ensure that representatives of incapacitated entities are liable for GST on post-appointment transactions.
These amendments will reverse the decision of the Federal Court in DFCT v PM Developments Pty Ltd ([2008] FCA 1886; 2008 ATC ¶20-078) that the GST liability for a transaction occurring during the period of the representative’s appointment is the liability of the company in liquidation rather than the liability of the representative.
The Assistant Treasurer said that the Court’s finding is contrary to the underlying policy intention and the way the law has been administered since the introduction of GST. The proposed amendments are intended to “restore the status quo”.
The amendments will also ensure that refunds are not available where the correct amount of GST has been paid in respect of transactions occurring during the period of the representative’s appointment.
Draft legislation is to be released for consultation.
For the relevant media release of the Assistant Treasurer, click here.
