GST and attribution of GST payable upon cancellation of registration when GST was accounted on a cash basis

Under subsection 138-15(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), does the entity, a business operator who accounted for goods and services tax (GST) on a cash basis, attribute GST payable to the tax period in which it cancelled its GST registration, when: • it made a taxable supply under section 9-5 of the GST Act before the cancellation of its GST registration, and • it has not yet attributed the GST payable relating to this taxable supply to a previous tax period?

Yes, under subsection 138-15(1) of the GST Act, the entity does attribute the GST payable to the tax period in which it cancelled its GST registration.

The entity is a business operator that accounted for GST on a cash basis. The entity is no longer required to be registered for GST and has applied to have its GST registration cancelled effective from the end of the current tax period.

In a previous tax period, the entity made a taxable supply under section 9-5 of the GST Act and issued an invoice to the recipient of the supply. As at the date of cancellation, the entity will not have received any consideration for the supply.

Subsection 138-15(1) of the GST Act provides that GST payable by an entity on its taxable supplies is attributable to a particular tax period, and no other, if: • during the tax period, the entity's GST registration is cancelled • immediately before the cancellation, the entity accounted for GST on a cash basis • the GST on the supply was not attributable, to any extent, to a previous tax period during which the entity accounted on a cash basis, and • it would have been attributable to that previous tax period had the entity not accounted on a cash basis during that period.

The entity accounted for GST on a cash basis and cancelled its GST registration effective from the end of the current tax period. The first and second requirements in subsection 138-15(1) of the GST Act are satisfied.

Under subsection 29-5(2) of the GST Act, an entity that accounts for GST on a cash basis can attribute the GST on a taxable supply to a particular tax period only to the extent that consideration for the supply is received in that tax period. The entity has not received any consideration for the taxable supply. Accordingly, the GST payable on the entity's supply was not attributable to any previous tax period and the third requirement in subsection 138-15(1) of the GST Act is satisfied.

Subsection 29-5(1) of the GST Act provides that the GST payable on the taxable supply of an entity who does not account on a cash basis is attributable to: • the tax period in which any consideration is received for the supply, or • if, before any of the consideration is received, an invoice is issued relating to the supply - the tax period in which the invoice was issued.

Although the entity has not received any consideration for the taxable supply, it issued an invoice to the recipient of the supply in a previous tax period. Accordingly, the entity would have attributed the GST payable in the previous tax period had it not accounted on a cash basis. Therefore, the fourth requirement in subsection 138-15(1) of the GST Act is satisfied.

As all the requirements under subsection 138-15(1) of the GST Act are satisfied, the entity does attribute the GST payable on the taxable supply to the tax period in which it cancelled its GST registration. Note. Subsection 27-40(2) of the GST Act provides that if an entity's registration is cancelled, the entity's concluding tax period is at the end of its cancellation day. As the entity's GST registration cancellation is effective from the end of its current tax period, its concluding tax period is at the end of the last day of its current tax period.