Commissioner of Taxation v Travelex Limited

• Jurisdiction: Australia Federal only
• Judgment Date: 14 February 2020
• Neutral Citation: [2020] FCAFC 10
• Date: 14 February 2020
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Commissioner of Taxation v Travelex Limited [2020] FCAFC 10

Appeal from:	Travelex Limited v Commissioner of Taxation [2018] FCA 1051
File number:	NSD 1369 of 2018
Judges:	KENNY, DERRINGTON AND STEWARD JJ
Date of judgment:	14 February 2020
Catchwords:	TAXATION – interest on overpayments – GST – where supplies which were GST-free erroneously included in Business Activity Statement – where taxpayer sent correspondence to Commissioner notifying that net amount in period ought to have been less than zero – where Commissioner purported to amend BAS to refund overpaid GST – where Commissioner refunded overpaid amounts – where taxpayer asserts Commissioner is required to pay interest from 14 days after the “effective date” of Commissioner’s “amendment” – whether Commissioner had power to amend BAS – effect of allocating an amount to a Running Balance Account – meaning of “RBA interest day” – whether correspondence to Commissioner a “notification that is required for the refund” under s 8AAZLG of the Taxation Administration Act 1953 (Cth)
Legislation:	A New Tax System (Goods and Services Tax) Act 1999 (Cth) Div 35, ss 17-5, 31-5, 31-8, 31-10, 33-5, 35-5, 35-10, 93-5 Income Tax Assessment Act 1997 (Cth) s 995-1 Taxation Administration Act 1953 (Cth) ss 8AAZA, 8AAZC, 8AAZH, 8AAZI, 8AAZJ, 8AAZLA, 8AAZLB, 8AAZLF, 8AAZLG, 105-10, 105-15, 105-55 Taxation (Interest on Overpayments and Early Payments) Act 1983 (Cth) ss 12AA, 12AD, 12AF Explanatory Memorandum, Taxation Laws Amendment Bill (No.5) 1998 (Cth)
Cases cited:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27 Central Equity Ltd v Federal Commissioner of Taxation (2011) 214 FCR 255 Commissioner of Taxation (Cth) v 4 Doonan Street Collinsville Pty Ltd (in liq) (2016) 332 ALR 349 Damberg v Damberg (2001) 52 NSWLR 492 Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 Federal Commissioner of Taxation v Multiflex Pty Ltd (2011) 197 FCR 580 Simon v Condran (2013) 85 NSWLR 768 Travelex Ltd v Commissioner of Taxation [2008] FCA 1961 Travelex Ltd v Federal Commissioner of Taxation (2009) 178 FCR 434 Travelex Ltd v Federal Commissioner of Taxation (2010) 241 CLR 510 Warner-Lambert Company LLC v Apotex Pty Ltd (No 2) (2018) 355 ALR 44
Date of hearing:	19 February 2019
Registry:
Division:
National Practice Area:
Category:	Catchwords
Number of paragraphs:	173
Counsel for the Appellant:	Mr N Williams SC and Mr C Sievers
Solicitor for the Appellant:	Balazs Lazanas & Welch LLP
Counsel for the Respondent:	Mr J Hmelnitsky SC, Ms L McBride and Mr D Hume
Solicitor for the Respondent:	MinterEllison

ORDERS

		NSD 1369 of 2018
BETWEEN:	COMMISSIONER OF TAXATION Appellant
AND:	TRAVELEX LIMITED Respondent

JUDGES:	KENNY, DERRINGTON AND STEWARD JJ
DATE OF ORDER:	14 FEBRUARY 2020

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondent’s costs of the appeal, as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

KENNY J:

1. I have had the considerable benefit of reading in draft the reasons for judgment of Derrington J and of Steward J. I agree with Steward J that, for the reasons given by him, the appeal should be dismissed with costs.

I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny.

Associate:

Dated: 14 February 2020

REASONS FOR JUDGMENT

DERRINGTON J:

introduction

2. This appeal concerns the manner in which several provisions in different pieces of taxation legislation operate together in relation to the unusual circumstances which have arisen. Of most significance are ss 12AA and 12AF of the Taxation (Interest on Overpayments and Early Payments) Act 1983 (Cth) (Overpayments Act), s 8AAZLG of the Taxation Administration Act 1953 (Cth) (TAA) and s 31-5 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act).

3. In the period leading up to 2010, the respondent, Travelex Ltd (Travelex), had repeatedly lodged its monthly Business Activity Statement (BAS) with the Australian Taxation Office on the basis that currency exchange services provided to persons who had passed through to the departure side of customs barriers at Australian ports of exit were taxable supplies under the GST Act. For the month of November 2009, it lodged a BAS (the November 2009 BAS) reporting that the amount of $37,751 was payable pursuant to ss 17-5 and 33-5(1) of the GST Act, being the amount by which the GST which it was liable to pay on its taxable supplies exceeded the amount of its claimed input tax credits. On 29 September 2010, the High Court handed down its decision in Travelex Ltd v Federal Commissioner of Taxation (2010) 241 CLR 510 where it determined the supplies of foreign currency by Travelex on the departure side of a customs barrier were GST-free supplies. The High Court made declarations in relation to the particular circumstances in issue which, self-evidently, had been agitated in the context of a test case. Necessarily, that decision required there be a reassessment of the taxation rights and obligations as between Travelex and the Commissioner of Taxation under the taxation legislation, to the extent to which that was possible.

4. In this proceeding Travelex sought declarations that it was entitled to be paid interest on an amount of a refund due in respect of the November 2009 tax period from around the date on which it had lodged the November 2009 BAS to 6 July 2012. The Commissioner had apparently accepted that Travelex was entitled to a refund and had paid a sum representing it, $149,020, on that latter date. However, the Commissioner alleged that interest should only run from the date on which Travelex had provided sufficient details from which he could calculate the amount of the refund. In that way the debate before the learned primary judge concerned ascertaining the correct date from which interest commenced to run. Before this Court the Commissioner adopted a different position. He now submits that no interest is payable because Travelex’s entitlement to a refund has never crystallised and that submission is made even though he has paid Travelex a substantial amount representing the amount of the refund.

5. For the reasons which follow, it transpires that the Commissioner’s submission that Travelex’s right to a refund has not yet accrued is correct and, necessarily, the appeal must be...