GST and the date of effect of approval of an additional member of a GST group

Can the entity, a proposed additional member of a GST group, have the date of effect of approval of its membership, under section 48-85 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), as the beginning of the tax period in which approval was sought, if it was not registered for goods and services tax (GST) at that time?

No, the entity cannot have the date of effect of approval of its membership, under section 48-85 of the GST Act, as the beginning of the tax period in which approval was sought, if it was not registered for GST at that time.

The entity is a proposed additional member of a GST group. The representative member of the GST group applied to the Commissioner, in the approved form, to approve the entity's membership to the GST group. The representative member applied for this approval during the course of a tax period that applies to the existing members of the GST group.

However, the entity was not registered for GST at the beginning of the tax period for which the representative member applied for the membership approval. The entity registered for GST during the course of the tax period for which the representative member applied for approval.

The GST group is registered for GST.

Paragraph 48-70(1)(a) of the GST Act states that the Commissioner must, if the representative member of a GST group applies in the approved form, approve as an additional member of the GST group, another entity that satisfies the membership requirements for the GST group.

One of the membership requirements, contained in paragraph 48-10(1)(c) of the GST Act, requires the proposed group member to be registered for GST to become a member of a GST group.

Subsection 48-85(1) of the GST Act provides that the Commissioner must decide the date of effect of any approval, or any revocation of an approval, for GST groups. Under subsection 48-85(2) of the GST Act, the date of effect may be before, on or after the day of the Commissioner's decision. However, paragraph 48-85(3)(a) of the GST Act provides that the date of effect must be the beginning of a tax period applying to the members of the GST group.

Since the entity did not become registered for GST until after the beginning of the tax period, it cannot be approved as a member of the GST Group for that period.

The entity will be registered from the beginning of the next tax period and the entity will satisfy the membership requirements for the GST group at that time. However, it is not possible for the entity to become a member of the GST group prior to that time. Note: Paragraph 48-85(3)(a) of the GST Act takes effect from 13 December 2004. Prior to this date, the requirement that the date of effect must be the beginning of a tax period applying to the members was given in subsection 48-85(2) of the GST Act. [HISTORY: This ATO ID was amended on 7 May 2007 for the change to paragraph 48-85(3)(a) of the GST Act which is to take effect from 13 December 2004.]