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Transcript: IndirecTV™ video update – July 2012

The new self-assessment regime

[Stephen Tobias] Welcome back to Deloitte IndirecTV™. In this episode, Heydon Miller looks at the new self-assessment regime and the related provisions enabling the Commissioner to withhold refunds in certain circumstances.

[Heydon Miller] From 1 July this year the new self-assessment regime comes into operation for GST, luxury car tax and wine tax. These taxes are usually reported through the BAS. The new regime will also apply to fuel tax and to the minerals resource rent tax which commences on 1 July as well.  

For most, the new self-assessment regime will not have a significant impact on day-to-day operations, at least in the short term. For most, it will be business as usual and you will continue to lodge your BAS every month, quarter or year depending upon your lodgement cycle.

The lodging of a BAS will be treated as if the Commissioner has made an assessment of the liability and the BAS will be treated as the notice of assessment.

There will be four years to amend an assessment. This can be done by lodging an amended BAS in an approved form. If accepted by the Commissioner, it will be treated as a notice of amended assessment. If it is not accepted the Commissioner will need to make his own amended assessment.

Parallel provisions exist for import declarations and clearance declarations. They give rise to an assessment where GST, luxury car tax or wine tax are paid on importations.     

A feature of indirect tax litigation has been declaratory relief in the Federal Court. This has proved to be quicker and cheaper than going through the assessment, objection and appeal processes. The new provisions have largely eliminated a taxpayer’s ability to seek a declaration on an indirect tax question. This leaves only the avenue of assessment, objection and appeal.  

Another measure that is connected with the new self-assessment regime is the Commissioner’s power to retain refunds arising from the lodgement of a BAS. This will allow the Commissioner to make enquiries, usually of the taxpayer concerned, to satisfy himself that the BAS is correct.

If the Commissioner withholds a BAS refund he must notify the taxpayer before he is required to pay the refund that it is to be withheld. Refunds should usually be paid within 14 days after the refund amount is credited to the taxpayer’s running balance account. If the Commissioner does not notify the taxpayer within this time, he must pay the refund.

The notification that the refund is to be withheld will include a request for further information that the Commissioner considers is likely to satisfy his concerns.

The circumstances in which the Commissioner can take this action are limited. They are mainly where he is concerned about the possibility of fraud or intentional disregard of the tax law.  Such action is not appropriate where there is merely a disagreement with the taxpayer about the tax treatment of an item of revenue or expenditure.

The Commissioner is allowed to hold onto the refund until he is satisfied that there is no longer a risk to the revenue or he issues an assessment. For affected taxpayers, the best solution will be to provide the Commissioner with the information he requests. Anyone who is affected by a decision to withhold a refund should seek advice about how best to satisfy the request for information and avenues of redress.  

This has been a summary of the new provisions. I suggest that you raise any questions you have with your Deloitte tax adviser. Thank you.  

[Stephen Tobias] All taxpayers need to be aware of the changes in the way indirect taxes are to be assessed and how the Commissioner’s new power to withhold refunds will impact them, especially if there is a dispute as to your tax liability.  

As Heydon said, contact Deloitte if you have any questions concerning the new provisions. Thank you for watching.

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