Issue
Can the entity, a business operator, change its election to pay goods and services tax (GST) by instalments to another prescribed method of payment during the same financial year in which it made the election to pay GST by instalments, under Division 162 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Decision
No, the entity cannot change its election to pay GST by instalments to another prescribed method of payment during the same financial year in which it made the election to pay GST by instalments, under Division 162 of the GST Act.
Facts
The entity is a business operator. The entity is registered for GST.
The entity makes an election to pay GST by instalments under section 162-15 of the GST Act. In accordance with subsection 162-25(1) of the GST Act, it makes the election on or before 28 October in the financial year to which the election relates. History: Paragraph amended on 3 June 2003 to insert the words 'of the GST Act' after 'subsection 162-25(1)'.
Reasons for Decision
Under Division 162 of the GST Act, an entity may elect to pay GST by instalments.
Subsection 162-30(1) of the GST Act provides that an entity's election to pay GST by instalments has effect for the whole of the financial year in which the election is made.
As required by subsection 162-25(1) of the GST Act, the entity makes an election to pay GST by instalments under section 162-15 of the GST Act. As such, in accordance with subsection 162-30(1) of the GST Act, the entity's election to pay GST by instalments has effect for the whole of the financial year in which the election is made.
Therefore, the entity cannot, under Division 162 of the GST Act, change its election to pay GST by instalments to another prescribed method of payment, during the same financial year in which it made the election to pay GST by instalments. [Note 1: Subsection 162-30(3) of the GST Act specifies that the election does not cease to have effect if, after making an election, an entity's turnover exceeds the turnover threshold. Note 2: Under subsection 162-30(2) of the GST Act, if the election is made after 28 October in that financial year (pursuant to subsection 162-25(2) of the GST Act), and the entity has already lodged a GST return for one or more tax periods covering that financial year, the election has effect only for that part of the financial year that is not covered by those tax periods.]