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  • Significant GST decisions

    Rio Tinto Services Ltd v Commissioner of Taxation [2015] FCAFC 117

    Venue - Full Federal Court (24 Aug 2015)

    Issue

    This case raised the following issues:

    • Whether the taxpayer was entitled to claim input tax credits relating to acquisitions made to provide residential accommodation to its employees and contractors in remote areas of Western Australia as part of its mining operations.
    • Were the acquisitions made for a creditable purpose?
    • Potential apportionment issues.

    Outcome

    The taxpayer’s appeal was unanimously dismissed by the Court.

    The Court noted that an acquisition which relates wholly to the making of supplies that would be input taxed is not to be apportioned merely because that supply may also serve some broader commercial objective of the supplier.

    The Court considered that the acquisitions clearly related wholly to the making of supplies that would be input taxed, albeit that they did so for the wider purpose of the enterprise. Section 11–15(2)(a) of the GST Act therefore operated to ‘block’ the taxpayer’s entitlement to input tax credits.

    We issued a Decision Impact Statement on 19 October 2015.

    Investrix Pty Ltd v Commissioner of Taxation [2015] FCA 1427

    Venue - Federal Court (17 Dec 2015)

    Issue

    This case involved a taxpayer’s application for judicial review of an earlier decision of the AAT where the Tribunal had refused to grant the taxpayer an order restricting or prohibiting the disclosure of evidence given before the Tribunal.

    Outcome

    The taxpayer’s application was dismissed by the Court which found no legal error on the part of the Tribunal had been established by the taxpayer.

    Crown Estates (Sales) Pty Ltd v Commissioner of Taxation [2016] FCA 335

    Venue - Federal Court (8 Apr 2016)

    Issue

    This case dealt with a taxpayer’s appeal from an earlier decision of the AAT. The Tribunal had found that the taxpayer, a real estate managing agent, was not entitled to claim input tax credits for property maintenance services because the relevant acquisitions were made by the taxpayer acting as an agent for its various clients.

    Outcome

    The Court dismissed the taxpayer’s appeal. In doing so the Court agreed with the Commissioner that the taxpayer’s appeal was not competent.

    Jamal Charara v Commissioner of Taxation [2016] FCA 451

    Venue - Federal Court (29 Apr 2016)

    Issue

    In this matter the Federal Court allowed the taxpayer’s appeal against an earlier decision of the AAT.

    The Tribunal had dismissed the taxpayer’s application for review on the grounds that the taxpayer had failed to comply with directions given by the Tribunal.

    Outcome

    The Court found that the Tribunal’s decision to dismiss the taxpayer’s application constituted an error at law. The Court held that the Tribunal’s decision was unreasonable and plainly unjust. (The Commissioner had agreed with the Tribunal’s decision to dismiss the application).

    The Court considered that in the circumstances of the case, and particularly where the taxpayer was self-represented, the Commissioner should have exercised caution and restraint. It was the Court’s view it was difficult to avoid the conclusion that the Commissioner had not discharged his obligations as a model litigant.

    Paul J Castan & Son Pty Ltd as trustee for Castan Investments Unit Trust v Commissioner of Taxation [2016] AATA 298

    Venue - AAT (11 May 2016)

    Issue

    GST treatment of supplies of accommodation in commercial residential premises.

    Outcome

    The AAT agreed with the Commissioner’s submissions that the taxpayer had made taxable supplies of commercial accommodation. The AAT held that the hotel operator was clearly acting as the taxpayer’s agent when it provided the accommodation to guests.

    The decision dealt with section 40–35 of the GST Act.

      Last modified: 20 Apr 2017QC 51810