In Multiflex Pty Ltd v. The Commissioner of Taxation (2011) FCA 789 the taxpayer challenged the Commissioner’s ability to withhold goods and services tax (GST) refunds pending the completion of verification or audit activity.

On Friday 9 December 2011, the Commissioner was not granted special leave to appeal to the High Court. This means the original Full Federal Court judgment now needs to be considered to confirm its implications. We will issue a decision impact statement soon.

You may have clients who have GST refunds being held pending the completion of verification or audit activity. We will progressively release all affected activity statement refunds as soon as administratively possible.

We recognise that you will need to keep your clients informed about what this decision means for refunds currently held by us.

What this means for your clients

No further action is required by you or your clients at this stage.

Your clients’ affected activity statement refunds will be released as soon as administratively possible. We will continue to verify and audit these GST refunds where appropriate.

We will continue to undertake audits of refund activity statements where we have concerns about a taxpayer’s entitlement to a refund, although the audits will now often be finalised after the refund is released.

If you have clients who are expecting a refund, it is important to ensure their bank details and lodgments are up to date.

Income tax refunds subject to integrity checks are not affected by the decision.

Our focus

Our focus continues to be on the integrity of the tax and superannuation systems.

We are strongly committed to deterring, detecting and dealing with serious tax evasion and fraud. Firm action will be taken against taxpayers, intermediaries or others who engage in evasion or fraud.

James O’Halloran
Deputy Commissioner
Indirect Tax