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When an indemnity request fails to meet the minimum standards then the Deputy Commissioner of Taxation (DCT) will notify to the insolvency practitioner stating that the indemnity has been rejected.
The reasons behind this rejection are not reviewable decisions and the DCT does not have any obligation to offer grounds for rejection. Nevertheless, DCT needs to provide reasons for the rejection, unless the
DCT believes that giving reasons could lead to breach of privacy or secrecy laws or if the Commonwealth states not to provide the reasons.
Where an insolvency practitioner considers that the proposed activity has great legitimacy and prospects of success and recovery, in this situation DCT may reject an indemnity. Such situations may come up from time to time for reasons which include: