GST and registration of a representative of an incapacitated entity when the incapacitated entity does not, and has never, carried on an enterprise

Is an entity, a representative of an incapacitated entity, required to be registered under subsection 147-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when the incapacitated entity does not, and has never, carried on an enterprise?

No. The entity is not required to be registered under subsection 147-5(1) of the GST Act when the incapacitated entity does not, and has never, carried on an enterprise.

The entity is a representative of an incapacitated entity.

The incapacitated entity is an individual that has been placed into bankruptcy. The incapacitated entity, as an individual, was not registered for goods and services tax (GST) at the time the entity was appointed and has never been required to be registered for GST. The incapacitated entity does not carry on, and has never carried on, an enterprise in its own right.

The incapacitated entity is a partner in a partnership and the partnership is registered for GST.

Whether an entity is required to be registered, in its capacity as representative of an incapacitated entity, is determined by the provisions of subsection 147-5(1) of the GST Act.

Subsection 147-5(1) of the GST Act provides that a representative of an incapacitated entity is required to be registered in that capacity, if the incapacitated entity is registered or required to be registered.

While subsection 147-5(1) of the GST Act is relevant when considering whether the representative of an incapacitated entity is required to be registered in that capacity, section 23-5 of the GST Act sets out the registration requirements for the incapacitated entity.

Section 23-5 of the GST Act provides that an entity that carries on an enterprise and whose GST turnover meets the registration turnover threshold, is required to be registered for GST.

While the incapacitated entity is a partner in a partnership that is registered for GST, the incapacitated entity itself was not registered for GST at the time of the appointment of the entity and has never been required to be registered for GST. The incapacitated entity itself does not carry on an enterprise and as such, under section 23-5 of the GST Act, the incapacitated entity is not required to be registered.

Therefore, as the incapacitated entity is neither registered nor required to be registered for GST, the representative is not required to be registered, in its capacity as a representative of an incapacitated entity, under subsection 147-5(1) of the GST Act. [Note: A partnership is a separate entity for the purposes of the GST Act. The enterprise of a partnership is carried on by the partnership and not by the individual partners. Consequently, the incapacitated entity, as partner, cannot register for GST in relation to the enterprise of the partnership.]