Under long-term non-reviewable contracts some supplies
that were previously tax-free became taxable on 1 July 2005. The parties
to these contracts are able to revise the contract price in order to take
account of the supplies becoming taxable.
A GST Assessment dispute arises when a supplier and recipient
cannot mutually agree on a revised price. The supplier is able to commence
an independent arbitration process to work out an appropriate revision
to the contract price.
LEADR is authorised to appoint assessors in accordance
with the requirements for GST assessment disputes. Amendments to Australian
legislation administering GST has meant that contracts which were originally
exempted from GST are now to be brought into the GST scheme. The Australian
Tax Office (ATO) has provided an information brief that outlines the scheme.
The information provided below for this scheme
is not intended to be legal or taxation advice, and should not be taken
as such. It is the responsibility of the parties to ensure that the contract
for which assessment is sought is within the scope of the legislative
scheme. Each party considering making or responding to an Application
should satisfy themselves as to their legal and taxation obligations.
Fees
LEADR Administration Fee: $440 (GST Inclusive),
to be paid at time of application
Assessor’s fees: Hourly rate varies according
to the assessor appointed. The hourly rate can be up to $450 + GST.
The Assessor’s fees are to be paid when the assessment is completed.
The Assessor grants the right to LEADR to hold the Assessor’s
assessment pending the payment of those fees.
Roles
Supplier: the party making the request
Recipient: the other party/parties
to the contract to be addressed
Authorised agency: LEADR is an authorised
agency. LEADR’s role is to appoint assessors in accordance with
the requirements for GST assessment disputes, and, in the administration
of the GST Assessment scheme, to ensure that there is an appropriate flow
of information and procedural fairness.
Assessor: The Assessor’s role
is to produce an assessment with reasons for such an assessment to the
Authorised Agency within the time frames established by the legislation.
Steps that a supplier needs to take to commence the
process
1. Contact LEADR so that an assessor can be appointed
under the scheme.
Copy of contract. If the contract is verbal, the terms of the contract
need to be provided.
Copy of the originating letter of offer
Submissions specifying the impact of the New Tax System Changes on
the cost of supply. Please note that it does not appear to be mandatory
that margins and similar information be disclosed. It may be useful
to include information identifying the components on the costs of supply
and the percentage that these represent as part of the overall cost
supply.
Cover letter requesting the appointment. This letter must be signed
by an authorised officer of the Supplier including the following words:
"In making the attached application we provide
to the Arbitrator, LEADR and the Assessor an undertaking that to the
fullest extent permissible by the law that they will not be pursued
for liability by us for anything done or omitted to be done in good
faith:
(a) in exercising their functions under this request
for or subsequent appointment, or
(b) in the reasonable belief that the thing was
done or omitted to be done in the exercise of their functions under
this request or appointment.
We also recognise that the assessor will charge fees
for the performance of the assessment and grant the right to LEADR
to hold the Assessor's assessment pending the payment of those fees.
Subject to such fees being reasonable for the skills of the assessor
and the time required to complete the assessment.
We also recognise that the assessor may have to,
as part of the function of assessment, make enquiries of us, the recipient
or other persons or firms. "
Steps taken by LEADR after a request for the appointment
of an assessor is received
LEADR will:
1. Notify the Recipient of the Application and will
make the documents provided in the application available to them, if
they have not received a copy.
2. Identify an appropriately skilled assessor
3. Request that the assessor provides confirmation
to LEADR that they have no known conflict of interest in accepting the
appointment.
4. Advise the Supplier and the Recipient of the name
of the assessor. Two business days will be allowed for either party
to indicate any objection to the appointment. Such an objection should
be based on criteria such as conflicts of interest.
5. Advise the parties of the hourly rate of the assessor
and will provide an agreement of appointment form to both parties.
Steps taken by the Assessor once s/he has been appointed
The Assessor will:
1. Seek from the Recipient any submissions that they
may have within 3 business days of the Recipient having been served
with a copy of the Application.
2. Make a reasonable effort to ensure that any requests
for information made of a party to an assessment, and the response to
such requests, are also copied to the other party for comment.
3. Be responsible for setting time lines for responses.
4. Complete the assessment within the time allowed
by the legislation and will provide LEADR with a copy of the assessment.
This includes providing LEADR with the reasons for such assessment.
Steps Taken by LEADR once the Assessment has been completed
LEADR will
1. Collect the Assessor’s fees
2. Release the Assessment to the Supplier once the
Assessor’s fees have been paid in full.
