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Direct crediting of GST refunds

Do you think it should be compulsory for refunds to be direct credited?

Currently most people receive GST refunds through direct credit (about 2/3rds of refunds) or cheque (about 1/3rd). Direct credited refunds are generally available to the customer within 3 – 4 days. Refunds through cheques take about 10 days to become available. The Government proposes that GST refunds only be paid by direct credit, except where the customer would experience undue hardship or payment into an account is not practicable.

Question   

Do you support the proposal that GST refunds should only be made by direct credit into a customer’s nominated bank account unless it would cause undue hardship to a customer or is not practicable?

Comments

Carol Hunter
No I do not agree with the direct crediting of GST refunds to a bank account as some clients have several entities which GST refunds can be offset against anothers GST due - with a cheque if the offset has not bee processed correctly by IRD you can then send the cheque back to Inland Revenue to offset the other entity - which by then will have accrued interest and Late payment penalties.

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6 months ago
Lee S
It should remain at the option of the taxpayer. We are a seasonal business, and what I would like to see is the option of IR keeping any refund in an 'account' for my business, so that when it is time to pay GST in better months, the credit can be offset against what I have to pay, so the cash flow burden is not so heavy.

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6 months ago
Martin Etherington
I support GST refunds only being able to be made by direct credit to a bank account. I also support having an option to hold the refund (to be transferred to another tax period, etc.)

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6 months ago
Jac
We already prefer direct credit; but I don't want to say this should be compulsory because there may be valid reasons other businesses may want to receive cheques instead (not that I can think of any myself). So I would suggest making it the default option, unless a specific request from the customer is received requesting a cheque payment.

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6 months ago
Angus Ogilvie
Yes. Although I don't usually like compulsion, as a tax agent it is becoming increasingly tedious to post out cheques, particularly with such an unreliable postal service these days. Automatic payment will ensure that the client receives the refund in the most prompt fashion.

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5 months ago
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