The GST you collected stays payable indefinitely. The GST credits you are owed disappear after four years.

Falling behind on your BAS lodgements looks like an administrative problem. Left long enough, it becomes an expensive one, because the GST you collected and the GST you paid are not treated the same way.

The GST you charge your customers stays payable. If a BAS has never been lodged, no assessment has ever been made, so nothing closes the period off. Those old quarters stay open, and the Commissioner can still assess them.

Your GST credits work differently. The GST law says your entitlement to an input tax credit simply ceases four years after the day the BAS it belongs in was due. Not four years from when you get around to lodging four years from the original due date. Once that day passes, the credit is gone.

What that looks like in dollars

Take a quarter where a business made sales of $55,000, including $5,000 of GST, and spent $55,000 on business costs, also including $5,000 of GST.

Lodged on time, that BAS nets out to nil. Nothing to pay.

Lodged four years and a day late, the $5,000 you collected is still payable, but the $5,000 of credits has evaporated.

A nil BAS has become a $5,000 debt, plus failure to lodge penalties and general interest charge running from the original due date. Do that across sixteen unlodged quarters and the numbers get frightening.

The courts have already looked at this

Taxpayers have argued the point and lost. In one Tribunal case a partnership lodged returns for periods running from 2012 to 2017 in June 2021 and claimed around $16,000 of credits. It said it believed it had been given more time to lodge and had never been told about the four-year limit. The Tribunal accepted that none of that mattered. The entitlement had already ceased, and there is no discretion in the provisions for the Commissioner or the Tribunal to extend it. The ATO confirmed the same strict view in its 2024 ruling on the time limits.

The only real exceptions are where you notified the Commissioner of the entitlement inside the four years, or where fraud or evasion is involved. Being late is not an exception. Neither is a bookkeeper who went quiet or an accountant who did not lodge.

If you have outstanding activity statements, anything still inside the four-year window can be saved. Anything outside it cannot. Please call us before another quarter drops off the end.

t: +61 7 3177 4120
e: advisors@hksrussell.com

Posted on October 12, 2026 by Charisse Russell - Articles