Issue
Is entity A, a receiver, required to register for goods and services tax (GST) under section 147-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it is appointed to control some of the assets of entity B and entity B continues to trade in its own right?
Decision
Yes, entity A is required to register for GST under section 147-5 of the GST Act when it is appointed to control some of entity B's assets and entity B continues to trade in its own right.
Facts
Entity A is a receiver. Entity A is appointed as a receiver to control some of the assets of entity B.
Entity B continues to trade in its own right. Entity B is registered for GST.
Reasons for Decision
Under subsection 147-5(1) of the GST Act, a representative of an incapacitated entity is required to be registered for GST in that capacity if the incapacitated entity is registered or required to be registered for GST.
As such, the issue is whether entity A is a representative of an incapacitated entity. In determining this, it is first necessary to establish whether entity A is a representative. The term 'representative' is defined in section 195-1 of the GST Act. The definition of a representative includes a receiver.
Therefore, as entity A is a receiver, it is a representative.
Next, it is necessary to determine whether entity B is an incapacitated entity. The term 'incapacitated entity' is defined in section 195-1 of the GST Act. An incapacitated entity includes 'an entity that has a representative'.
It has already been established that entity A is a representative. Therefore, since a representative, entity A, has been appointed to control some of the assets of entity B, entity B is an incapacitated entity.
Accordingly, entity A is a representative of an incapacitated entity, entity B.
In this case, as entity B is registered for GST, entity A is also required to register for GST in its capacity as a representative of entity B. [NOTE: If more than one representative is appointed over the assets of an entity, each representative will be required to register in that capacity under section 147-5 of the GST Act where the incapacitated entity is registered or required to be registered.]