ATO Targets GST Refund Fraud in WA
The Australian Taxation Office (ATO) is increasing its crackdown on GST refund frauds, with several high-profile investigations already underway in Perth and across Western Australia. Working with the Serious Financial Crime Taskforce and Australian Federal Police (AFP), the ATO has executed multiple search warrants, and a recent case saw a fraudster sentenced to three years’ imprisonment for deliberately claiming false GST refunds.
The message is clear: the ATO has zero tolerance for GST fraud and is actively identifying, investigating, and prosecuting offenders.
What is GST Refund Fraud?
GST refund fraud occurs when a taxpayer deliberately provides false information to the ATO to obtain a refund or other benefit. Unlike accidental errors, this conduct is intentional and deceitful.
Recent cases in WA have involved individuals:
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Registering fake businesses with fraudulent Australian Business Numbers (ABNs).
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Lodging fictitious Business Activity Statements (BAS).
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Claiming false GST refunds they were not entitled to.
Alarmingly, some of these schemes have been promoted online and across social media.
Rules for Claiming GST Credits in Australia
If you are registered for GST, you can only claim credits for legitimate business expenses. The key rules include:
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Business Use Only: You cannot claim GST on private or personal expenses (e.g. food, entertainment).
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Discounts Apply: GST credits must reflect any discounted price paid, even if the discount is not shown on the invoice.
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Hire Purchase Agreements: Credits may only be claimed upfront if your business accounts for GST on a cash basis and the agreement was entered into after 1 July 2012.
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Ineligible Expenses: GST cannot be claimed on items such as bank fees, stamp duty, or transactions within a GST group.
Registering for an ABN or applying for GST refunds when you are not operating a business is fraud.
Red Flags the ATO is Watching
The ATO has sophisticated data-matching systems to detect suspicious behaviour. Warning signs include:
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Backdating business registrations to claim refunds.
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Applying for ABNs without running a genuine business.
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Lodging BAS for fabricated transactions.
The ATO also stresses that it does not offer loans or disaster payments. Any online advertisement suggesting you can obtain an “ATO loan” by registering a fake business is a scam.
Consequences of GST Refund Fraud
Anyone caught engaging in GST fraud must:
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Repay the full amount of any fraudulent refund.
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Face potential criminal prosecution, fines, and imprisonment.
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Risk losing eligibility for other government benefits and payments.
Importantly, liability exists even if you paid a third party to lodge the BAS on your behalf.
Voluntary Disclosure – Act Before It’s Too Late
If you have been involved in a GST refund scheme, it is far better to come forward voluntarily than wait for the ATO to catch up with you. Options may include:
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Revising your BAS.
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Cancelling your ABN and GST registration.
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Entering into a repayment arrangement with the ATO.
How We Can Help
GST fraud is taken very seriously, and early legal advice is crucial. Our experienced Perth based tax lawyers can:
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Assess whether the ATO is likely to pursue criminal prosecution.
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Negotiate with the ATO to minimise penalties.
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Guide you through voluntary disclosure and repayment options.
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Represent you if charges are laid.
At Tax Lawyers, our Perth team has in-depth knowledge of ATO compliance practices, tax law, and the prosecution process. We provide strategic advice and strong representation to protect your interests.
Call to Action
If you are under ATO investigation or have concerns about GST credits and compliance, don’t wait until it’s too late.
This article is general information only. For tailored advice, contact Tax Lawyers
