Inland Revenue (“IRD”) has released guidance on the operational approach it will take until the law is amended.
In summary, if a body corporate is already GST registered (and not voluntarily) it will need to continue charging GST on supplies, and filing returns. The GST paid will be refunded when the law is changed. Similarly, a body corporate can continue to claim GST refunds, but with the proviso that these will need to be repaid to IRD when the law changes. The operational statement does not rule out the possibility of use of money interest or penalties applying.
The IRD’s operational position on GST and bodies corporate highlights the prospect of taxpayers having to apply a set of rules which do not (and may not) have any legislative force, and are also contrary to IRD’s better view of the current law. This will leave affected body corporates in an untenable position and confirms our concerns about the unworkability of this retrospective law change.