CA ANZ has a lodged a submission with the ATO on MT 2024/D1: time limits for claiming an input tax credit (ITC) or a fuel tax credit (FTC). Our submission contends that the draft ruling will defeat the rights of some taxpayers to claim credits in respect of expenditure they have made for business purposes, in the context of ‘partial’ credit claims, such as with an apportionment methodology.

Based on the reasoning of the Full Court in Linfox, in our view, the draft ruling is incorrect. In Examples 3 and 4, a partial input tax credit (of which the unclaimed portion of the credit is a part) was taken into account as an integer in the assessment process. It is not relevant whether, as part of that process, a lesser amount only was included in the assessment.

In substance, the Commissioner’s view centres on whether an amount was actually claimed on a BAS, a view rejected by the Full Court. The Commissioner conflates this with the assessment process itself.

We therefore recommend that the view expressed in the draft ruling relating to partial credit claims be revised to accord with the views expressed by the Full Court in Linfox.