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  • Litigation

    The Commissioner received favourable or partly favourable decisions in 70% of all GST litigation decisions handed down in 2017–18. The three unfavourable decisions received by the Commissioner concerned property issues, namely:

    • valuation issues as they relate to the operation of the Margin Scheme
    • increasing adjustments required under Division 135 of the GST Act in respect to supplies of going concerns.

    Figure 4: GST litigation completed cases

    As mentioned in the commentary below, current GST litigation cases remain at a relatively low level. This diagram shows the outcome for 2016–17 as: favourable 21%; conceded (whole or in part) 21%; settled 27%; withdrawn by taxpayer 23%; dismissed by court or AAT 5%; and other 3%. In 2017–18: favourable 10%; unfavourable 5%; partly favourable 2%; conceded (whole or in part) 8%; settled 14%; withdrawn by taxpayer 27%; dismissed by court or AAT 29%; and other 5%.

    Matters of interest in 2017–18

    The following items are matters of interest in 2017–18:

    • In historical terms, current GST litigation case numbers remain at a relatively low level. We anticipate the litigation caseload will remain at similar levels moving into 2018–19.
    • On 12 July 2018, the Federal Court handed down an unfavourable decision in the significant Travelex Limited matter. This case arose from a prior GST matter. The taxpayer was successful in seeking a declaration contrary to the Commissioner’s view, regarding the calculation of delayed refund interest. On 6 August 2018, the Commissioner appealed this decision to the Full Federal Court. If the Commissioner is ultimately unsuccessful, there will be significant impacts on payments of delayed refund interest for a large number of taxpayers for prior years as well as on a go forward basis.

    At 30 June 2018, there were 13 current litigation cases relating to disputed gold transactions. These cases mainly involve taxpayer claims for ITCs relating to purported acquisitions of scrap gold and are likely to require ongoing significant litigation resources in 2018–19. The revenue at risk in these matters is significant and the cases are being project managed within the ATO.

    At 30 June 2018, around 14% of GST litigation cases involved property issues, which is a decrease of around 7% from the level at 30 June 2017.

      Last modified: 18 Mar 2019QC 58283