Move Against Scheme Spreading G.S.T Confusion
CCC/A.T.O. Move Against Scheme Spreading G.S.T Confusion
The Australian Competition and Consumer Commission on Friday obtained interlocutory orders from the Federal Court of Australia against Australian Taxation Services, and its Director, Michael Phillip Ivanoff.
The orders restrain a Goods and Services Tax scheme promoted by ATS and Ivanoff, and secures funds paid to the company by businesses in Australia.
The ACCC took its action after the matter was referred to it by the Australian Taxation Office that had previously warned business about the scheme.
On Wednesday (7 July 1999) the ACCC obtained a temporary injunction against Australian Taxation Services, a private company distributing forms seeking businesses to register for the GST and pay a fee.
The forms sent by ATS are double-sided A4 sheets printed on a blue background. The forms provide information about the implementation of the GST under the New Tax System and seek further information from the businesses by asking various questions in white information boxes.
The forms sent by ATS appeared to be issued by the Australian Taxation Office, or some other Government agency, and misled people into believing that it was compulsory to pay ATS the GST Registration Fee of $175 for one year or $295 for two years.
Businesses which received these forms have advised the ACCC that they were misled into believing that the ATS forms were from the Australian Taxation Office because of the similarity between the ATS form and the forms generally used by the Australian Tax Office.
Businesses have advised that the colour of the forms, the logo used by ATS and the use of official words such as 'GST Registrations Fee' and 'Declaration' were characteristics of the form which misled them.
The Australian Taxation Office publicly announced that they had no affiliation with ATS and warned businesses about the ATS forms.
Tax Commissioner, Mr Michael Carmody, said he referred the matter to the ACCC because he was concerned about the potential of the ATS form to mislead taxpayers.
"I would like to reinforce the message that people will not have to pay to register for GST purposes or for GST information issued by the ATO," Mr Carmody said.
"These complaints have come from a number of States and involve serious concerns about businesses being misled about the New Tax System," ACCC Chairman, Professor Allan Fels, said today. "The ACCC has taken immediate action to protect small businesses and to ensure that they are not misled about the implementation of the GST.
"It is very important that businesses are given accurate information about the New Tax System and schemes which spread GST confusion must be stopped as a matter of urgency. The ACCC can, and in this case has, moved very quickly to stop misleading schemes involving the GST and to ensure that businesses do not lose money."
Justice Kiefel of the Federal Court of Australia continued an injunction restraining the company from sending further forms to businesses and consumers within Australia. The Court also ordered a freeze on the company's bank account to ensure that funds gained from the scheme were preserved. If the ACCC is ultimately successful in its action, the frozen funds will be refunded to businesses that were misled by the ATS form.
On 7 July 1999 Justice Kiefel granted the ACCC a temporary injunction effectively stopping ATS from sending the misleading forms and ensuring that cheques sent after that date by businesses could not be processed. The company was ordered to deliver to the ACCC all of the material received to date.