Decision impact statement

Mackay and Commissioner of Taxation


Court Citation(s):
[2011] AATA 593
2011 ATC 10-201
(2011) 82 ATR 256

Venue: Administrative Appeals Tribunal
Venue Reference No: 2009/4899-4910, 4921
Judge Name: SM McCabe
Judgment date: 26 August 2011
Appeals on foot: No.
Decision Outcome: Partly Adverse

Impacted Advice

Relevant Rulings/Determinations:

Subject References:
GST
GST-free
Export of hunting trophies

Précis

Outlines the ATO response to this case that involves the question of whether exported hunting trophies are GST-free.

Brief summary of facts

The applicant ran a hunting safari business supplying all-inclusive hunting expeditions within Australia to foreign clients. The all-inclusive packages included airport transfers, accommodation on Australian properties, meals, the services of a guide and some incidentals. The package also included the right to stalk and shoot at least one animal. At that point the carcass became the property of the client which he or she could take home as a trophy. The trophies were taken home by the clients as checked or carry on luggage and in some cases were transported by a shipping company at the client's expense.

The applicant accounted for the supplies of the hunting packages on the basis the entirety of the supply was a GST-free supply of goods, namely the trophies, for export under section 38-185 of A New Tax System (Goods and Services) Act 1999. The Commissioner disagreed and issued notices of net amount on the basis that all of the hunting packages, or at the very least the majority of the packages, comprised the supply of goods and services in Australia on which GST was payable.

During the proceedings fresh information was provided by the applicant's accountants, which established that there may have been an overstatement of the value of the sales taken into account by the Commissioner in issuing the notices of net amount.

Issues decided by the tribunal

The Tribunal found that section 38-185 did not apply to any of the applicant's supplies as the applicant had not satisfied the strict documentation requirements of the provision.

The Commissioner and applicant agreed that the applicant had overstated the quantum of supplies recorded in his activity statements (and, as a consequence, his assessments of net amount and income tax assessments were excessive).

The Tribunal ordered that those parts of the objection decision which related to the overstatement be set aside and remitted to the Commissioner, but otherwise affirmed the Commissioner's objection decision.

ATO view of Decision

The ATO considers the Tribunal decision in relation to section 38-185 is in accordance with the Commissioner's view of the operation of section 38-185 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

The ATO also accepts that it was open to the Tribunal to make its findings in relation to the applicant's overstatement of supplies. This aspect of the decision was based on the specific facts of the case and will not have any impact on any existing or future litigation proceedings.

Administrative Treatment

Implications for ATO precedential documents (Public Rulings & Determinations etc)

N/A

Implications for Law Administration Practice Statements

N/A

Legislative References:
A New Tax System (Goods and Services) Tax Act 1999
38-185