The need for ongoing review and management of your GST compliance requirements has been further highlighted by the recent commencement of GST reviews by the ATO. This includes the review of Business Activity Statements (BAS) lodged with the ATO.

Although the ATO has stated that these reviews are not audits, they are designed to enable the ATO to determine what entries should have been included on the full BAS calculation sheet. In conducting the review, the ATO is empowered to review a wide range of documents and information to ascertain whether the BAS has been correctly prepared. The results of the review could lead to a GST audit.

In our experience, the risk areas, which the ATO may focus upon, will include:

	Have your systems and procedures been correctly established and documented to account and record GST? (This will be particularly important for businesses using the simplified "derived from accounts" option to prepare their BAS).
	Can the calculations be backed up with workings?
	Have you correctly applied the GST free and input taxed supply provisions?
	Have you retained the correct documentation? (i.e. tax invoices, adjustment notes)
	Have you attributed GST to the correct tax periods?

	Have you correctly treated adjustments and the different types of supplies?
	Have you correctly applied the transitional provisions and retained adequate documentation? (e.g. the special claim for sales tax credits)

As a result, the ATO will focus on your "audit trail" or workings to demonstrate compliance with the legislative and regulatory requirements. We recommend that all businesses undertake a review of their systems, procedures and transactions to provide a degree of confidence that the numbers being generated for BAS preparation are accurate and that you have an appropriate audit trail.