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  • Litigation

    The number of GST-related litigation matters has continued to decrease, mainly due to the early dispute resolution approach we introduced last year. GST-related litigation cases are at record lows. Current case numbers have decreased by 18% on last year, with 77 current cases at 30 June 2016. Nearly all of these cases are from the micro and small to medium enterprises business market segments.

    In 2015–16, we received 67 new matters and completed 84 cases.

    Figure 21: On hand GST litigation cases at 30 June

    Figure 21 - Current GST litigation cases at 30 June As mentioned in the previous commentary, current GST litigation cases are at the lowest level since 2005. This diagram provides the case numbers for each financial year from 2005–06 to 2015–16, being: 111, 193, 175, 157, 155, 127, 157, 151, 131, 94, and finally 77 in 2015–16.

    There were 11 GST-related decisions involving the Commissioner (non-debt) delivered by the courts and the Administrative Appeals Tribunal (AAT) during the year with 10 supporting the Commissioner’s position and one not supporting it. This represents a success rate of around 91%. In 2014–15, around 83% of the decided cases supported the Commissioner’s position.

    Important decisions during 2015–16 dealt with the following issues:

    • input tax credits (ITCs) for remote mining workers’ accommodation
    • time limits for claiming ITCs
    • sham transactions in relation to labour hire activities
    • agency issues
    • administrative law matters involving disclosure of evidence, procedural fairness and alleged bias
    • supply of commercial accommodation in commercial residential premises
    • penalties and onus of proof.

    At 30 June 2016, around 16% of GST litigation cases involved property-related issues, which is slightly lower than the previous year. Nearly 65% of cases dealt with largely non-technical issues where taxable supplies had been under-stated or input tax credits over-claimed. These cases arise largely from serious evasion, refund integrity and cash economy audits.

    Of the cases as at 30 June 2016, 96% were before the AAT. Of these cases, 79% involved micro enterprises, and 18% involved small and medium enterprises. Only 3% of cases involved large business enterprises and government entities.

    Figure 22: GST litigation by issue as at 30 June 2016

    Figure 22 – GST litigation by issue as at 30 June 2016 diagram GST litigation for the month ending 30 June 2016 broken down by issue: Substantiation  64.9%, property  15.6%, enterprise  6.5%, penalty-only  2.6%, income tax  3.9%, TAA issues  3.9%, Miscellaneous matters  2.6%.

      Last modified: 20 Apr 2017QC 51810