Since late 2011, as a result of ATO’s loss in the court case called Multiflex Pty Ltd, the Federal Government has backed tax legislation which would allow the ATO to keep GST refunds for a period of 90 days (and in some cases even longer) in order to conduct “refund verification checks”. The Institute of Chartered Accountants and other professional groups have sought to amend the proposed legislation by suggesting that a 30 day time period was a more appropriate timeframe.
This legislation is even more far-ranging than simply GST refunds and could cause some financing issues for businesses with a transaction of a larger scale.
To minimize delays in receiving large refunds particularly GST refunds, we recommend that you should have all the appropriate documentation relating to the transaction including tax invoices and contracts. This will expedite the ATO’s “verification check” process.