Input tax credits denied due to lodging BASs late

Be aware of the expiry date when lodging BAS in order to claim any input tax credits

The Administrative Appeal Tribunal (‘AAT’) has held that a taxpayer could not claim $91,239 of input tax credits (‘ITCs’) at least partly because it lodged the relevant BASs more than 4 years too late.

Specifically, the GST Act operates such that, if an extension of time to lodge a BAS has not been granted prior to the expiry of 4 years after the day on which it was required to be given to the ATO, the entitlement to ITCs immediately ceases.

The AAT also noted that there is no discretion to circumvent this part of the GST Act, and the ATO cannot provide further time to lodge a BAS retrospectively outside of the relevant 4-year period.

It did not matter that the taxpayer was (for example) involved in a dispute with a franchisor nor that they were impacted by lockdown restrictions.

Therefore, the taxpayer was no longer entitled to claim ITCs in relation to the BASs lodged by the taxpayer 4 years after they were required to have been given (and was also denied other ITCs for BASs that were lodged within the required 4 year period, as a substantial amount of the ITCs claimed remained unsubstantiated by a valid tax invoice).

Depending on your business, BAS can be a fairly complex process and many businesses prefer to delegate it to their accountant to manage. This ensures that they don’t miss receiving any GST deductions and avoid ever missing their BAS statement lodgement and receiving a fine. Read more here or contact Omnis Group’s Business Accountants in Perth on 08 9380 3555.