PRACTICE AND PROCEDURE - new ground raised during the review - ground not part of the objection - application to extend ground made at hearing - argument misconceived - discretion not exercised

TAXATION - goods and services tax - input tax credits - eligibility to claim input tax credits - extension in time to lodge business activity statements - discretion to extend time after the expiration of four years - whether entitlement to input tax credits ceased - decision under review affirmed

A New Tax System (Goods and Services Tax) Act 1999 (Cth), ss31-8, 93-5, 93-10

Taxation Administration Act 1953, ss14ZZK, 155-15, 388-44 Schedule 1

JHKW and Commissioner of Taxation [2022] AATA 2875

Rosebridge Nominees Pty Ltd (In Liq) v Federal Commissioner of Taxation [2019] AATA 426

SE Sedgwick & YE Sedgwick v Federal Commissioner of Taxation [2015] AATA 690

Trustee for the SBM Trust v Federal Commissioner of Taxation [2015] AATA 174

Miscellaneous Tax Ruling 2024/1: tax limits for claiming an input tax or fuel credit

1. Mr Mangini (Applicant) is in dispute with the Commissioner of Taxation (Commissioner or Respondent) over his goods and services (GST) liability for the quarterly periods between 1 July 2016 and 30 September 2018 (Relevant Period).
2. Mr Mangini seeks a review of the Commissioner's decision dated 20 February 2023, to disallow his objection to the amended assessments of net amounts for the Relevant Period. The Applicant argues he is entitled to claim input tax credits (ITCs) for the Relevant Period. The Commissioner says that the four-year period for claiming ITCs under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) expired and his entitlement to ITCs has ceased.

1. The facts in this matter are largely agreed between the Applicant and the Respondent. The facts referred to below are taken primarily from the Tribunal documents.
2. During the Relevant Period, Mr Mangini was registered for GST to account on a cash basis with quarterly tax periods. He was carrying on an enterprise as a driver.
3. On 16 February 2023, Mr Mangini lodged BAS for the Relevant Period claiming ITCs totalling $1550 and reporting GST payable of $2588.[1]
4. On 17 February 2023, the Commissioner issued a notice of amended assessment of net amounts for the Relevant Period (GST Assessment). The GST Assessment reflected that the ITCs claimed by the Applicant had been disallowed by the Respondent and that the GST payable reported for the relevant periods remained payable.[2]
5. On 20 February 2023, Mr Mangini objected to the GST Assessment. In his objection he explained that he was unable to lodge the BAS for the Relevant Periods by the due date as a result of his deteriorating health, financial hardship and other difficult personal circumstances. Mr Mangini contended that he should be granted a retrospective extension in time to lodge the BAS, and the ITCs should be accepted.[3]
6. On 28 April 2023, the Commissioner disallowed the objection. In the reasons for decision, the Respondent advised the Applicant that:[4]
   • a taxpayer's entitlement to an ITC for a creditable acquisition ceases to exist to the extent that it is not taken into account in an assessment within four years after the due date for lodgment of the activity statement to which the credit is attributable;
   • the Commissioner will be taken to have made an assessment of the assessable net amount, and the return is treated as being a notice of assessment issued on the day the activity statement is lodged;
   • the four year period will be extended only where the ITC is for a creditable acquisition that relates to making a supply which is incorrectly treated as input taxed in an assessment, and the assessment is subsequently amended by the Commissioner to be treated as not input taxed, or the taxpayer has requested the Commissioner treat the document as a tax invoice before the end of the four year period and the Commission agrees after that time;
   • the BAS were lodged after the four-year time period and therefore the entitlement to the ITCs ceased. The credits were not claimed in an assessment within four years after the due date for lodgment of the activity statement to which the credit is attributable and the exceptions to the four-year rule do not apply in the Applicant's case;
   • regardless of the circumstances leading up to the failure to include the ITCs in an assessment within the four-year period, the legislation does not include a discretion to extend the period once the entitlement has ceased.
7. On 3 April 2023 the Commissioner notified the Applicant that his GST registration had been cancelled from 1 January 2023 as he was no longer carrying on an enterprise.[5]
8. On 29 June 2023, Mr Mangini lodged an application for review of the objection decision with the Tribunal. In the 'reasons for the application', the Applicant advised:[6]

I CLAIM THE DECISION IS WRONG DUE TO MEDICAL INCAPACITATION & UNABLE TO DO WHAT WAS REQUIRED OF ME BY THE ATO DURING THE YEARS OF C.P.T.S.D & AND CLINICAL DEPRESSION & YEARS OF THERAPY TRYING TO RECOVER FROM MY ILLNESS.

9. Mr Mangini, in support of his review has filed a large number of documents directed to his medical history, financial hardship and challenging personal circumstances. He represented himself at the hearing and did so in a polite and respectful manner. His limited financial resources compounded by his health, work and social challenges precluded him from obtaining legal representation.
10. The Commissioner was represented by junior counsel at the hearing notwithstanding the modest quantum of tax in dispute (approximately $3000), the facts being largely agreed and the issue for determination very narrow.

1. Section 31-8(1) of the GST Act sets out when a taxpayer is required to give the Commissioner a GST return for a quarterly tax period and provides as follows:

When GST returns must be given--quarterly tax periods > > (1) If a tax period applying to you is a * quarterly tax period, you must give your * GST return for the tax period to the Commissioner: > > (a) as provided in the following table; or > > (b) within such further period as the Commissioner allows.

If this day falls within the quarterly tax period ...

Give the GST return to the Commissioner on or before this day:

1. The time limit on entitlements to ITCs is dealt with in Division 93 of the GST Act. Section 93-1 states:

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. Section 93-10 provides that entitlements to ITCs will not cease where the supplier to which the acquisition relates is incorrectly assessed as input taxed and is subsequently assessed as taxable or GST free[7] or the entity has requested the Commissioner treat a document as a tax invoice before the end of the four-year period and the Commissioner agrees after the four-year period has passed.[8]

The Taxation Administration Act 1953 (Cth) (the TAA 53)

1. Section 155-15 of Schedule 1 to the TAA 53 provides when a taxpayer lodges an approved form, which relevantly includes a BAS, the Commissioner is taken to have made an assessment of the net amount worked out from that BAS and the notice of assessment is taken to have been given to the taxpayer on the day the BAS is lodged.
2. Section 388-55 of Schedule 1 to the TAA 53, empowers the Commissioner to defer the time within which an approved form, including a BAS is required to be given to the Respondent. Subsection (2) confirms that a deferral under this section does not defer the time for payment of any amount to the Commissioner.

Practice Statement Law Administration 2011/ 15 (PSLA 2011/15)

1. PSLA 2011/15 is an internal Australian Taxation Office (ATO) instrument that provides instruction to ATO staff on lodgment obligations, lodgement due dates, suspension of lodgment enforcement and deferring lodgement. Taxpayers can rely on the practise statement to provide them with protection from interest and penalties in respect of their tax obligations.
2. At paragraph 25 of the document, it is explained that a suspension does not defer or extend the lodgment date but is an agreement by the Commissioner to suspend lodgement enforcement action by not undertaking compliance action on a specific overdue lodgement for a period of time. A decision to suspend may arise from a taxpayer express request or where reasons given for the late lodgement are not sufficient to allow a deferral.[9] When a suspension applies payment is still required by the due date, and the general interest charge applies to any late payment. Critically, suspension of lodgment enforcement action does not affect the four-year time limit in s 93-5 of the GST Act.
3. This is to be contrasted with a deferral which is the exercise of the discretionary power under the TAA 53 to defer the time within which an approved form is to be given to the Commissioner or another entity. A deferral provides a further period of time to lodge without incurring failure to lodge penalties or other administrative penalties. It does not, however defer the time for payment. [10]
4. PSLA 2011/ 5 sets out the information to be provided by taxpayers in making a deferral request and the circumstances in which the Commissioner can agree to defer lodgment.[11] A deferral moves the lodgement date to a future date and accordingly it does affect the four-year time limit in 93-5 of the GST Act.

Miscellaneous Tax Ruling 2024/1: tax limits for claiming an input tax or fuel credit (MT 2024/1)

1. This Ruling explains when and the extent to which a tax credit has been taken into account in an assessment, when the 4-year entitlement period ends and the exceptions to the limiting provisions. Paragraph 18 of the document sets out the Commissioner's view as to the operation of s 93-5 of the GST Act, which adopts the reasoning in JHKW and the Commissioner of Taxation [12] that unless an extension of time to lodge a BAS has been granted prior to the expiry of 4 years after the day on which it was required to be given to the Respondent, the entitlement to ITCs immediately ceases. The provision of further time within which to give a BAS to the Respondent cannot be provided retrospectively outside of the relevant 4-year period.

THE EVIDENCE AND OTHER MATERIAL BEFORE THE TRIBUNAL

1. The Tribunal had the benefit of the following;
   • The Tribunal documents;[13]
   • The Supplementary Tribunal documents;[14]
   • The Respondent's Statement of Facts, Issues and Contentions dated 7 December 2023;
   • Submission to Administrative Appeals Tribunal filed by the Applicant;[15]
   • The oral evidence of Mr Mangini.
2. The Tribunal has also considered the written submissions filed by both parties.[16]

1. Repeated below is the lodgment history of the Applicant from the Commissioners records:

1. A chronology of the communications between the Applicant and the Respondent for the Relevant Period as recorded in the Commissioner's records is set out below.

Details of interaction in Commissioner's Records

Advising that Mr Mangini's Australian Business Number was incorrectly cancelled and has now been reinstated.

'Advised suspension of action has been applied for A/S with due date on 27/06/2018 advised suspension does not stop further correspondence to lodge all outstanding A/S ASAP.

Currently no debt on either IT or ICA. Advised 2017 ITR due on 15/05/2018

A/S Sept 2016-Dec 2017 outstanding with suspension of action.'

'Client requested additional time for lodgments due to experiencing family and personal illness and has had to travel for a family funeral. Client has recently been in a court case with Centrelink for approximately a year. Client requested a deferral for 6 months.

Income Tax return 2017, 2018 Deferral granted until 18/09/2019

Activity Statement SEPT 2016-MARCH 2019 Suspension Granted until 18/09/2019'

Client David Mangini called to ask if the deferral for his Income Tax Returns have been granted and to confirm the due dates. I confirmed with him that the Income Tax returns have been deferred until 18/09/2019 as requested in previous call he made on March 18 2019. I also provided him with the reference numbers for the call made on March 18 2019 and also todays call for his refence.

Please contact us about your overdue obligations. Phone us by 19 April 2022 on 1300 661 508 between 8am &6pm weekdays. It will help if you have you TFN and quote REF#10519734592323 when you call

1. In his statement submitted as part of the broader submission filed in November 2023, Mr Mangini outlined:
   • the history of events and circumstances leading up to the late lodgment of the BAS in February 2023 and establishment of the debt. More specifically his various legal proceedings, health issues, difficult family and other personal circumstances, financial hardship and work history.[17] He explained that as a result of those matters he was unable maintain his tax obligations within the required time;
   • he originally understood that he wasn't required to register for GST or pay any tax as his turnover as an Uber driver was under $70,000 per year and he was still in receipt of Newstart payments;
   • he received notices from the ATO but all he could manage to do at the time was to send letters about his circumstances. He did not receive any further notices for about a year before they started up again; and
   • in November 2022, Mr Mangini was able to focus on the taxation issues without 'constant interruption and distraction...'
2. Included in the documents provided by Mr Mangini were copies of letters he says were sent to the Commissioner on 23 October 2017 and 8 November 2022. Those letters did not specifically request a deferral but did provide details as to the issues he was facing at the time. Documents substantiating his work, health, financial and personal challenges were also provided as part of that submission.
3. At the hearing, Mr Mangini gave evidence that:
   • he commenced working for Uber in 2017. He was unable to obtain alternate employment as a result of a workers compensation case. Uber required him to have an ABN and register for GST. In his view, he registered for GST and was required to participate in the GST system under duress and without his consent. He ceased working for Uber in around 2019;
   • once he was able to afford a tax agent, he engaged one to assist him in bringing his lodgments up to date;
   • in 2017 just before his mother passed away, Mr Mangini went into the Perth ATO office after receiving a notice. He asked the Commissioner to cease and desist from sending any further letters for a period of time. He found the constant notices from the Commissioner distressing. He did not receive a notice for another six months or so; and
   • in addition to that face-to-face attendance at the ATO office, he also wrote a couple of letters to the Commissioner explaining why he was unable to meet his obligations but did not get a response.
   • he was unaware of the operation of the four- year limiting period prior to this dispute with the Tribunal.
4. Mr Mangini was not cross-examined by the Commissioner. He answered the questions of the Tribunal to the best of his ability. The Tribunal accepts the evidence of the Applicant.

(a) the Tribunal should retrospectively agree to extend the due date for lodgment of the BAS within the meaning of s 31-8(1)(b) of the GST Act, as a result of the extreme extenuating circumstances he was experiencing at the time. He would then be entitled to the ITCs as claimed (Ground One); > > (b) he was forced under duress to comply with Uber's requirements including that he be registered for GST and participate in the GST system. His contract with Uber and by extension the Commissioner is therefore void and he is not liable to pay the GST as assessed (Ground Two); > > (c) the ATO does not exist, the Deputy Commissioner was not validly appointed, the term "taxpayer" and "income" is not properly defined, and Prime Minister Anthony Albanese is being indicted for war crimes. These matters go to the validity of the tax laws, the tax system and obligation to pay tax. He argued that in this context, the laws are invalid and the obligation to pay tax is voluntary. He is therefore not required to pay the GST as assessed (Ground Three).

On an application for review of a reviewable objection decision: > > (a) the applicant is, unless the ART orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and > > (b) the applicant has the burden of proving: > > (i) if the taxation decision concerned is an assessment--that the assessment is excessive or otherwise incorrect and what the assessment should have been; or > > (ii) in any other case--that the taxation decision concerned should not have been made or should have been made differently.

2. Ground Two and Ground Three were not raised by the Applicant in the objection to the Commissioner. The Tribunal understands they were first raised during a conference before a Registrar after the Applicant had filed his submission and the Commissioner had filed his Statement of Facts, Issues and Contentions.
3. At the hearing, Mr Mangini requested the Tribunal exercise it's discretion to expand the grounds of review pursuant to s 14ZZK(a) of the TAA 53, which otherwise limits a taxpayer to the matters raised in their objection.
4. In support of this application, Mr Mangini advised the Tribunal that he wanted the debt to the Commissioner to be expunged and that was his priority. He contended that Ground Two and Ground Three were an alternate path to achieving that outcome. A substantial component of the oral and written submissions provided to the Tribunal and relied upon by Mr Mangini were directed to those grounds.
5. The Tribunal observes that:
   • the Commissioner's powers and obligations are conferred by the taxation legislation and related instruments and are imposed by operation of law. They do not arise by consent, negotiation, contract or agreement between the Commissioner and individual taxpayers;
   • the Tribunal's function in the context of a taxation dispute is to apply the taxation law and not to enforce or give effect to alleged contractual or similar arrangements except insofar as legislation expressly gives effect to such instruments;
   • the Commissioner of Taxation is a statutory officer. The Commissioner has general administration of the taxation laws and taxation disputes and proceedings are conducted in his name. The powers conferred on him by the taxation legislation are delegated through instruments of delegation to the Second Commissioners, Deputy Commissioners and other ATO officers. The ATO is not a separate legal entity;
   • the Tribunal's jurisdiction is confined to conducting merits review of decisions made under the taxation legislation, and it is required to apply that legislation as enacted. The Tribunal is not a court created under Chapter III of the Constitution and does not have power to determine the validity of Commonwealth laws. Questions of validity can only be determined by a court of competent jurisdiction such as the Federal or High Court. To the extent the Applicant asserts the taxation laws are invalid that submission cannot be entertained in these proceedings
6. In the present matter Grounds Two and Three advanced by the Applicant proceed on a misunderstanding as to the nature of the Commissioner's statutory powers and the Tribunal's jurisdiction. As such the proposed grounds are misconceived and the Tribunal declines to exercise a discretion to extend the grounds of review.
7. The issue for determination by the Tribunal is therefore whether the Commissioner's GST Assessments that disallowed the ITCs in each of the returns for the Relevant Period are excessive or otherwise incorrect pursuant to 14ZZK(b)(i) of the TAA 53. This essentially depends on whether the Applicant's entitlement to the ITCs claimed in the BAS for the Relevant Period ceased due to the operation of the four-year time limit prescribed by section 93-5 of the GST Act.

Did the time limit extinguish the Applicant's entitlement to claim ITCs during the Relevant Period**

1. The Tribunal has considered the operation of the time limit contained s 93-5(1) of the GST Act in a number of cases.[18] The strict and inflexible nature of its application has been specifically observed to relevantly include:
   • there is no obligation upon the Commissioner to advise the taxpayer of the operation of the four-year rule. In a self- assessed system taxpayers are expected to inform themselves as to their relevant obligation;
   • it is not enough that a taxpayer believed or understood that an extension or deferral had been given in respect of the due date for lodgment. The Tribunal must be satisfied on the evidence an extension or deferral was granted as opposed to a suspension of action or no accommodation at all;
   • once the four-year time limit ends, there is no discretion for the Commissioner or the Tribunal to extend the time limit, regardless of the reason. No action after this time revives the entitlement to an ITC;
   • although at times unfair to a taxpayer, there are important policy reasons that underpin the imposition of such a decisive cut-off date.
2. In Rosebridge Nominees Pty Ltd (IN LIQ) and Commissioner of Taxation,[19] Senior Member Lazanas (as she then was) stated

... s 93-5(1) of the GST Act similarly makes it abundantly clear that the entitlement to the ITCs is extinguished in certain circumstances. The use of the word "ceases" is unequivocal in describing the end of the entitlement to claim ITCs, unless certain events have occurred.

3. Once the entitlement has been extinguished, it is not able to be revived for any reason.
4. In the circumstances of this case, it is not in dispute that:

(a) Mr Mangini did not lodge BAS for the Relevant Period until 16 February 2023; and > > (b) the ITC's claimed by the Applicant in the BAS had not previously been taken into account in an assessment of net amount within the meaning of section 93-5 of the GST Act; and > > (c) the exceptions outlined in s93-10 of the GST Act do not arise.

(a) the Commissioner had, prior to the expiry of the period of four years, extended the time for lodgments of the BAS under 31-81 (1)(b) of the GST Act; or > > (b) deferred the lodgment date under section 388-55 of Schedule 1 of the TAA 53 to a date less than four years before the 16th of February 2022

Mr Mangini's entitlement to the ITCs claimed extinguished before the lodgement of the BAS and the Commissioner's decision to disallow them is correct.

1. Mr Mangini did not explicitly contend that the Commissioner had granted an extension of time or deferral of the requirement to lodge BAS during the Relevant Period. His evidence was he took steps to inform the Commissioner of the circumstances he was dealing with at the time as he did not wish to receive frequent and persistent notices.
2. In 2017 Mr Mangini attended the office of the Respondent in Perth to request the Commissioner 'cease and desist' from sending notices. Mr Mangini was unable to recall specific details, such as the date, exactly what was discussed or if an extension or deferral was granted. He appropriately conceded he was dealing with various health and personal issues at the time which compromised his memory and accurate recollection his interactions with the Commissioner. The Tribunal finds the Commissioner did not grant an extension or deferral of the requirement to lodge a BAS during this interaction.
3. On 19 March 2018, Mr Mangini spoke to an officer from the ATO. The notes that form part of the evidence before the Tribunal include a reference to suspension of action to 27 June 2018. The Tribunal accepts the notes in the Commissioner's records that although a suspension of action was granted, an extension or deferral under the TAA 53 was not. Even if the Tribunal is wrong in respect to this finding, the four-year entitlement would have expired on 27 June 2022 which is before the Applicant lodged the BAS for the Relevant Period in any event.
4. On 18 March 2019 there was a telephone conversation between Mr Mangini and an officer from the ATO. Whether the Commissioner extended or deferred lodgment of the BAS arising from this conversation is critical as the four-year entitlement would not expire until 18 September 2023 which is after Mr Mangini lodged the BAS.
5. The Commissioner's records of the conversation indicate that Mr Mangini requested a 'deferral for 6 months' and that he was granted a deferral in respect of his income tax returns for the 2017 and 2018 year and a suspension in respect of the BAS lodgments for September 2016 to March 2019 until 18 September 2019.
6. The Tribunal considers the difference in the language used in the note between the income tax returns and the BAS lodgments to be deliberate and indicates an intention to differentiate treatment between the two. PSLA 2011/15 states that a suspension of action may be granted in circumstances where a deferral is not considered appropriate. The Tribunal infers this is what occurred here.
7. The fact a deferral was only granted in respect of the income tax returns is also consistent with other evidence before the Tribunal, including the evidence of Mr Mangini. In a telephone conversation with an officer of the ATO just two months later in July 2018, Mr Mangini called to confirm whether his deferral request had been granted. The ATO officer confirmed it had been granted in respect of the income tax returns. The BAS obligations were not mentioned.
8. The Tribunal accepts the Commissioner's notes and finds that although the Commissioner did agree to a deferral of the income tax returns, he only agreed to a suspension of action in respect of the requirement to lodge a BAS in the telephone call dated 19 March 2018. A suspension does not effect the time limit in s 93-5 of the GST Act.
9. In respect of the letters in evidence dated 23 October 2017 and 8 November 2022, although the Tribunal accepts they were sent to the Commissioner by the Applicant, they do not assist his case. The letters provide details as to his personal circumstances but do not request any specific action from the Commissioner. Mr Mangini also conceded in his evidence that these letters were not acknowledged by the Commissioner.
10. There is no evidence the Commissioner gave Mr Mangini a deferral for his overdue BAS so as to affect the four year entitlement period in s 93-5(1) of the GST Act.
11. The Tribunal recognises and accepts that Mr Mangini was dealing with a number of challenging and difficult circumstances during the Relevant Period which had a significant impact on his physical and mental health. The Tribunal also accepts that these issues impacted on his ability to maintain his taxation affairs and that he advised the Commissioner of this from time to time.
12. Unfortunately, Mr Mangini did not obtain the law makes clear that there is no room for the operation of a discretion in relation to the four-year entitlement, regardless of the surrounding circumstances or detrimental impact to the taxpayer.

(a) Mr Mangini lodged the BAS for the Relevant Period on 16 February 2023; and > > (b) the ITC's claimed by the Applicant in the BAS had not previously been taken into account in an assessment of net amount within the meaning of section 93-5 of the GST Act; and > > (c) the due dates for the BAS are accurately set out in paragraph 22 of these reasons; and > > (d) the exceptions outlined in s93-10 of the GST Act do not arise.

2. Therefore, Mr Mangini's entitlement to the ITCs claimed in the BAS for the Relevant Period ceased due to the operation of the four-year time limit prescribed by section 93-5 of the GST Act. The Applicant has failed to discharge the burden of proving that the GST assessments issued to him by the Commissioner are excessive under section 14ZZK of the TAA.
3. The objection decision is affirmed.

Litigation and Legal Services, Australian Taxation Office

[9] Practice Statement Law Administration 2011/ 15, paragraph 26

[11] Ibid paragraphs 40, 45-55 pf PSLA 2011/5

[12] [2022] AATA 752 at [57]

[15] Exhibit A1 - the submission included a large tranche of documents and a statement of the Applicant

[16] The submissions of the Applicant included videos, the documents received on the day of the hearing and further written submissions received on 28 August 2025

[17] Given the sensitive nature of those matters and the Commissioner did not seek to cross-examine or put into issue those circumstances, the Tribunal has decided not to repeat the detail of those matters in these reasons but has had regard to them.

[18] See for example S.E Sedgwick & Y.E. Sedgwick and Commissioner of Taxation [2015] AATA 690; The Trustee for the SBM Trust and Commissioner of Taxation [2015] AATA 174; JHKW and Commissioner of Taxation [2022] AATA 2875 and H & B Auto Repair Centre Pty Ltd and Commissioner of Taxation. [2022] AATA 3561

[19] [2019] AATA 426 at [44]