93‑5 Time limit on entitlements to input tax credits > > (1) You cease to be entitled to an input tax credit for a *creditable acquisition to the extent that the input tax credit has not been taken into account, in an *assessment of a *net amount of yours, during the period of 4 years after the day on which you were required to give to the Commissioner a *GST return for the tax period to which the input tax credit would be attributable under subsection 29‑10(1) or (2). > > Note: Section 93‑10 sets out circumstances in which your entitlement to the input tax credit does not cease under this section. > > (2) This section has effect despite section 11‑20 (which is about entitlement to input tax credits). > > Note: You must hold a valid tax invoice relating to a creditable acquisition to be entitled to have an input tax credit for that acquisition taken into account in working out your assessed net amount for a tax period: see subsection 29‑10(3).

2. An assessment is deemed to have been made upon lodgement of a return.[4] Thus, if no relevant assessment is actually made by the Commissioner, s 93-5(1) takes effect if an ITC is not taken into account in a return lodged in the four-year period after the date on which the return, for the tax period to which the ITC would be attributable, was required to be lodged.
3. Aside from the Further Time issue, it is not in dispute that the applicant did not claim the contested ITCs in a return lodged within the period specified in s 93-5. On seven previous occasions, members of this Tribunal or its predecessor have held that s 93-5 means what it appears to say.[5] That is, once the four-year period has expired without an ITC being claimed in a return and thus taken into account in a deemed assessment (or otherwise taken into account in an assessment), any entitlement to the ITC, that otherwise would have existed, ceases.
4. Notwithstanding that, and the apparently unequivocal terms in which s 93-5 is expressed, the applicant submits that the applicant may establish that it is entitled to the contested ITCs in review proceedings before the Tribunal. Central to the applicant's argument is dicta of Moshinsky J in Coles Supermarkets Australia Pty Ltd v Commissioner of Taxation[6] which the applicant points out either pre-dated or was not brought to attention in the seven earlier Tribunal cases.
5. The Coles case concerned Coles' claim for fuel tax credits under the Fuel Tax Act 2006 (Cth) (Fuel Tax Act) which, by s 47-5, provides, in materially identical terms to s 93-5, for a four-year time limit on fuel tax credit claims. Coles contended that s 47-5, when understood in its historical context, was designed to place a four-year limit on the process of claiming a fuel tax credit in a later fuel tax return but was not intended to affect the objection and appeal processes dealt with in Part IVC of the Taxation Administration Act 1953 (Cth). Thus, Coles submitted, entitlement to fuel tax credits was a proper subject of consideration at objection or on appeal or review and in the context of those processes s 47-5 did not operate to deny an entitlement to fuel tax credits.
6. The historical context referenced is that, when s 47-5 was first introduced, fuel tax, like GST, operated under what has been called a "self-actuating" system. Taxpayers were entitled to a refund of the net fuel amount (or ITCs in the case of GST) reported in their return without the Commissioner assessing their net fuel amount (or net amount for GST). There was no requirement for the Commissioner to issue an assessment unless requested.
7. The parties agreed that the evident purpose of s 47-5 when introduced was to prevent asymmetrical outcomes under which taxpayers could defer fuel tax claims, but not liabilities, until later returns. It did not, Coles submitted, prevent entitlement to a fuel tax credit following an objection because the taxpayer, in order to pursue an objection, would have had to request an assessment and object to that assessment. Accordingly, Coles submitted, the limitation imposed by s 47-5 was intended to be irrelevant to a taxpayer's entitlements determined at objection or on review or appeal.
8. The current self-assessment system was introduced in 2012. The amendments to give effect to the new system included the introduction of s 155-60 in Schedule 1 to the TAA which provides that the Commissioner may amend an assessment at any time as a result of an objection or to give effect to a decision on review or appeal. Having regard to that context, Coles submitted that s 47-5 was not intended to have any work to do in respect of an objection where there is no asymmetry between the Commissioner's recovery rights and the taxpayer's rights to fuel tax credits. Thus, it was argued, once a return has been lodged and objected to, there is no scope for s 47-5 to disentitle a taxpayer to fuel tax credits.
9. Moshinsky J considered that there was "some force" in Coles' contention, observing that:[7]

there is a persuasive argument that: s 47-5 is intended to prevent an ongoing entitlement to claim credits in a later return where a return has not been lodged or credits not claimed; Div 155 of Sch 1 to the Tax Administration Act provides for a separate dispute resolution mechanism (i.e. objection and review) once a return has been lodged or a default assessment issued; and once a return has been lodged and objected to, there is no scope for the operation of s 47-5 to disentitle a taxpayer to fuel tax credits . . . Acceptance of the Commissioner's submissions would present the difficulty that a taxpayer could lawfully object to an assessment and find that, when a court came to consider the matter outside of the four-year period, an entitlement to a fuel tax credit would be denied, notwithstanding that the credit was attributable to the period to which the assessment and objection related. For example, it may be that, in relation to a contentious issue concerning a fuel tax credit, a taxpayer wishes to self-assess on the basis of the Commissioner's position on the issue, and then object against the deemed assessment. In this scenario, if the Commissioner's submissions are correct, the taxpayer's entitlement to the fuel tax credit would depend on whether or not the matter was determined (by the Commissioner or on review or appeal) within the four year period. Thus, while I accept that s 47-5 is expressed in unqualified terms, consideration of the legislative history, including that it was introduced during the period when a self-actuating system applied, is generally supportive of Coles's contention.[8]

10. The applicant submits, and I accept, that these judicial observations relating to s 47-5 would also apply in relation to s 93-5. As already observed, the provisions are relevantly identical in their terms as is their legislative history. The Commissioner did not submit otherwise. Rather, the Commissioner submitted that his position - that any ITCs to which the applicant would otherwise be entitled were extinguished by the operation of s 93-5 - is, in the context in which the issue arises in this case, "entirely consistent with what the Court said" in the Coles case.[9]
11. It is important to take into account the context in which Moshinsky J's observations were made. Coles did not submit that in any case where s 47-5 would otherwise apply to deny a fuel tax entitlement, the Commissioner at objection, or the Tribunal on review or the Court on appeal, could nevertheless decide the taxpayer is entitled to the fuel tax credits that would otherwise have been extinguished by s 47-5. As the Court noted, "according to [Coles'] contention, it is sufficient that Coles objected to the relevant assessments within the four-year period allowed for objections and claimed the fuel tax credits in its objections".[10]
12. The relevant tax periods to which the fuel tax credits would have been attributable were in the period July 2012 to January 2014. Coles claimed the credits in its objection in 2016. In that context, as the Court effectively observed, if the Commissioner's submissions in the Coles case were accepted, a taxpayer who did not claim credits in a return but met the statutory criteria for entitlement when they objected against the deemed assessment, would be denied that entitlement if the objection or review or appeal process extended beyond the four-year period in s 47-5. That would be so even though the taxpayer lodged the objection claiming the credits well within the four years specified in s 47-5 of the Fuel Tax Act or s 93-5 of the GST Act.
13. The circumstances in the current case are quite different. The tax periods ranged from June 2012 to December 2013. The applicant did not lodge the relevant returns until March 2018, well after the due date for the returns and after the expiry of the four-year period specified in s 93-5. It follows that the applicant also lodged its objection well outside that four-year period although within the period for objections.
14. The applicant's argument is effectively that s 93-5 has no operation in the context of determination of an objection to an assessment or a review of or appeal against an objection decision relating to an assessment. That is, the Commissioner must determine an objection, and the Tribunal or Court must decide a review or appeal, without regard to the four-year time limit on claiming credits.
15. That would be consistent with Moshinsky J's observation extracted above that "once a return has been lodged and objected to, there is no scope for the operation of s 47-5 to disentitle a taxpayer to fuel tax credits" - if viewed in isolation. However, his Honour also observed in the same passage that "s 47-5 is intended to prevent an ongoing entitlement to claim credits in a later return where a return has not been lodged or credits not claimed."
16. In this case, the applicant lodged returns claiming the ITCs but the returns were lodged after the expiry of the four-year period specified in s 93-5. By operation of s 93-5, the applicant was not entitled to claim the ITCs when the returns were lodged. On the applicant's case, the entitlement to claim ITCs, denied by s 93-5 at the time the returns were lodged, would effectively be revived by the lodging of an objection to the Commissioner's amended assessment disallowing the ITCs and the application for review of the objection decision.
17. That is quite different to the circumstances in Coles where, on the premise on which Moshinsky J considered the s 47-5 issue, Coles would have been entitled to the fuel tax credits when it lodged its returns, and its objection, but had failed to claim the credits in its returns. In that regard, Mr Young, who appeared for the applicant, pointed out that the premise of Coles' argument was that, as already noted, it is sufficient that Coles objected to the relevant assessments within the four-year period allowed for objections and claimed the fuel tax credits in its objections. That is a different period to the four-year period specified in s 47-5 and s 93-5.
18. The objection in this case was lodged within the statutory time limit for objections. However, that occurred well outside the four-year period specified in s 93-5 because the returns themselves were lodged, and the resulting deemed assessment was taken to be made, outside that period.
19. Taken literally, Moshinsky J's observations suggest that s 47-5, and therefore s 93-5, have no role to play once an objection claiming the credits has been lodged within the statutory time for objections. However, notwithstanding the points made in Mr Young's submissions, there is no escaping the fact that his Honour's observations do not extend to considering whether on a proper construction s 47-5 would not deny an entitlement to credits raised in an objection where claiming the credits would have been denied when the relevant returns were lodged. That is not the circumstance that arose in the Coles case and nor was that circumstance addressed by his Honour.
20. If the applicant's argument were to be accepted, a taxpayer who failed to lodge returns by the due date could effectively claim ITCs many years, indeed decades, later. By lodging an objection against a deemed assessment or an amended assessment, the taxpayer would, on the applicant's view, effectively become entitled to ITCs. That would be a curious outcome indeed in the face of a statutory provision stating unequivocally that a taxpayer will "cease to be entitled to an input tax credit" that has not been taken into account during the period of four years after the time for lodgement of a return.
21. The task of the Tribunal is to determine whether the applicant has discharged the burden of proving the amended assessments are excessive. I cannot accept that an assessment which disallows ITCs that on any view the applicant was not entitled to when it lodged its return, could be said to be, for that reason, excessive.
22. Such an outcome would be contrary to the clear words of s 93-5. It would also be contrary to the apparent policy of s 93-5 as set out in the Explanatory Memorandum to the Bill[11] for the Act that amended the section as part of the change from the self-actuating system to the system of deemed assessments, which states:

1.124 Section 93-5 of the GST Act is amended to provide that a > > taxpayer loses his or her entitlement to an input tax credit if it has not > > been taken into account in an assessment during the period of four years > > commencing the day after the taxpayer is required to lodge a GST return > > for the tax period to which the input tax credit would be attributable under > > subsections 29-10(1) and (2).

23. The Explanatory Memorandum goes on to give the following example which is indistinguishable from the circumstances of this case:

Example 1.14: Failing to lodge a return > > Emily makes a creditable acquisition on 10 June 2013. On > > 21 July 2013, she fails to lodge a return for the tax period ending > > 30 June 2013. Emily does not lodge a return for that tax period for the > > next four years. > > On 22 July 2020, Emily lodges a return for the tax period ending > > 30 June 2013 on which she claims the input tax credit for the creditable > > acquisition made on 10 June 2013. > > Because more than four years has passed since the return was due, the > > input tax credit entitlement has been lost and may no longer be taken > > into account in any assessment.

24. For these reasons, despite Mr Young's clear and thorough submissions, I am not persuaded that the applicant is entitled to ITCs that were not claimed in the time period specified in

s 93-5 or any further period allowed by the Commissioner.

1. As noted above, s 93-5 operates in relation to "the period of 4 years after the day on which you were required to give to the Commissioner a *GST return for the tax period".
2. The day on which a taxpayer is required to give the Commissioner a GST return for a tax period is determined in s 31-8 of the GST Act. For taxpayers such as the applicant lodging quarterly returns, s 31-8(1) provides that the returns are, effectively, required by the 28th day of the month following the end of the tax period or "within such further period as the Commissioner allows".
3. Therefore, the issue for determination is whether the Commissioner allowed a further period. I accept the submission made by Mr Young that "allow" for this purpose means no more than permit and does not require a formal process. However, I consider that the absence of formality surrounding an alleged allowance of further time, depending on the circumstances may have some relevance to, but is plainly not determinative of, the proper characterisation of the Commissioner's actions.
4. Mr Young submitted that the Commissioner allowed the applicant until 31 July 2015 to lodge the returns. As this aspect of the case came to be argued by the parties, the issue mainly turns on the proper construction to be given to written communications with the applicant after telephone calls between Mrs Barth and an ATO officer.
5. The written communications comprise:

(a) An email dated 4 May 2015; > > (b) An SMS portal printout recording an SMS message also sent on 4 May 2015; and > > (c) An email dated 16 June 2015.

During our discussion you agreed to lodge the following by 30 June 2015. This is not a deferral date, penalties and interest may apply on late lodgments. > > [Followed by a list of outstanding BASs for the December 2011 to the January to March 2015 quarterly tax periods, and the applicant's 2014 income tax return.] > > Most Australians lodge their forms and returns on time and your lodgment agreement is a step towards getting your lodgments back on track. > > Your next steps

• - lodge the listed forms by the above date
• - ensure that all future forms are lodged by their due dates.

You should be aware that further action may be taken if the listed forms are not lodged by the above date.

Subject: Your Lodgment Agreement > > You have committed to lodge your overdue forms by 30 Jun. Receipt ID [number omitted]. To further discuss call 1300661508. Australian Taxation Office

2. The 16 June 2015 email is relevantly identical to the 4 May 2015 email, except that the date by which the applicant is said to have agreed to lodge the outstanding forms is 31 July 2015 and the applicant's Taxable Payments Annual Reports for 2013 and 2014 had been added to the list of outstanding forms.
3. The communications in their terms do not allow any further time for lodgement of the returns. They merely record the applicant's agreement to lodge the returns by the specified date. Indeed, the emails expressly state: "This is not a deferral. . ." and the SMS refers to the forms as "overdue" which is inconsistent with their due date having been extended.
4. That Mrs Barth had sought without success to obtain paper BAS forms might have provided some support for an inference that the ATO officer had, in the circumstances, agreed to allow further time for the lodgements. However, it is not surprising that the terms in which the communications were expressed are not consistent with the Commissioner allowing further time for lodgement of the outstanding returns when the broader context in which the communications occurred is considered. The returns were already, by that time, overdue by some years in the case of the returns for the earlier periods. It would be surprising if the Commissioner were to retrospectively allow further time of that order without expressing the decision in clear terms or recording the reasons for what would be a significant administrative decision allowing very substantial departure from the usual requirements of the legislation. There is no evidence of that occurring.
5. In any case, subsequent action by Mrs Barth is inconsistent with an understanding that the due date for the returns was extended on 4 May 2015 to 30 June 2015 and again on 16 June 2015 to 31 July 2015. If that was Mrs Barth's understanding, it is unclear why, based on her affidavit evidence, it was not until January 2017 that Mrs Barth next attempted to lodge the BASs.[12]
6. For completeness, I mention two other submissions raised by Mr Young.
7. The first is that the Commissioner did not raise a failure to lodge penalty assessment. Such penalties apply by force of law under s 286-75 of Schedule 1 to the TAA. Mr Young submitted that the absence of a penalty notice being raised is consistent with the Commissioner having allowed further time for lodgement of the BASs. I agree with the submission to that extent. However, I give it little weight: it is well-known that numerous breaches of taxation laws occur on a daily basis without the Commissioner seeking to recover penalties that are payable under the taxation legislation.
8. The second is an alternative submission that the Commissioner deferred lodgement of the BASs under s 388-55 of Schedule 1 to the TAA. Mr Young characterised the 16 July 2015 email, which referred to the outstanding BASs along with the trust's 2014 income tax and its 2013 and 2014 Taxable Payment Annual Reports, as a "blanket" deferral which he submitted was only authorised under s 388-55. Mr Young also noted that there is a separate power, under s 255-10 in Schedule 1 to the TAA, to defer payment of taxes.
9. There are a number of difficulties with that submission.
10. One is that, as with the alleged allowance of further time under s 31-8, it would be surprising if a decision to defer lodgements for a period of years were not communicated clearly and reasons for a significant decision of that nature recorded. There is no evidence of that occurring.
11. Another is that it is contrary to the express words of the 16 July 2015 email stating: "This is not a deferral date, penalties and interest may apply on late lodgements". That sentence expressly states that the communication is not a deferral. It also refers in the same sentence to late lodgements not late payments, which is consistent with the communication not being a deferral of the lodgement dates. There is no reference at all to payments in the correspondence that would admit of a construction that "This is not a deferral" was intended to refer only to deferral of payment and not lodgement.
12. Further, in the "Your next steps" section, the email distinguishes between the date for lodgement of the outstanding returns - "by the above date" - and the lodgement of all future forms by their "due dates". Again, there is no reference to deferred or extended dates, only the express statement that the email is not a deferral.
13. Additionally, as already noted, the 16 July 2015 email is in similar terms to the earlier email. That email was followed by the SMS message which refers to the returns as "overdue". That is inconsistent with the Commissioner allowing further time or deferring the time for lodgement of the returns.
14. For all of these reasons, I am not persuaded that the Commissioner allowed further time for, or deferred the time for lodgement of, the outstanding returns.

1. In view of the conclusions I have reached regarding the Section 93-5 issue and the Further Time issue, it is not necessary for me to consider the Quantum issue.[13]

1. For the reasons set out above, I am not persuaded that the applicant is entitled to the disputed ITCs. It follows that the objection decision must be affirmed.[14]

[1] The applicant has the burden of proving the relevant assessments of net amount are excessive and what net amounts should have been assessed: Taxation Administration Act 1953 (Cth), s 14ZZK. As the Commissioner has confined the issues in dispute, the applicant may succeed by proving the amount of the ITCs making up the net amount for each tax period. The amount of GST payable on taxable supplies is not in dispute.

[2] This data is extracted from the Further Amended Statement of Issues, Facts and Contentions of the Respondent dated 22 November 2024. The applicant did not take issue with the data: Transcript, 24 February 2025, P-9.