Goods and Services Tax Advice
GSTA TPP 104
Goods and services tax: When is the day of supply of a going concern that constitutes a property development enterprise?
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Please note that the PDF version is the authorised consolidated version of this ruling and amending notices.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Preamble
| This document was published prior to 1 July 2010 and was a public ruling for the purposes of former section 37 of the
Taxation Administration Act 1953
and former section 105-60 of Schedule 1 to the
Taxation Administration Act 1953
.
From 1 July 2010, this document is taken to be a public ruling under Division 358 of Schedule 1 to the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. [ Note : This is a consolidated version of this document. Refer to the Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.] |
Example
Supply of a property development enterprise as a going concern
A contract was signed on September 2003 and settled on January 2004 for the supply of a property development enterprise. The purchaser was given access to the property under a lease dated November 2003. The lease gave the purchaser other limited rights.
Titles, off the plan sales and all planning and development permits were assigned at settlement.
The vendor continued to sell lots and physically develop the land in the period up to settlement.
Answer
The example in this Advice is about property development. If it is assumed that an enterprise is being supplied, the day of supply for this supplier was the day on which -
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- the supplier satisfied all of the obligations under the arrangement that are relevant to the identified enterprise supplied, and
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- the recipient assumed effective control and possession of all of the things necessary for the continued operation of the enterprise.
Explanation
In determining the date of effective control and possession the facts of each case need to be considered in relation to -
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- the particular enterprise being supplied
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- the arrangement between the supplier and recipient
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- the necessary things being supplied, and
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- when these things are supplied.
Paragraph 38-325(2)(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) requires that the supplier carries on, or will carry on, the enterprise supplied under the arrangement until the day of the supply. This is discussed in paragraph 161 of GSTR 2002/5 Goods and Services Tax: when is a 'supply of a going concern' GST-free? Two examples in paragraphs 162 to 165 of the ruling support the discussion.
When granted limited access under the lease, the recipient gained some rights, but not all of the things necessary for the continued operation of the enterprise. When off the plan sales, titles and planning permits were supplied, assuming there were no other things necessary, the recipient got effective control of all things. This was in January 2004.
If the supply is not GST-free as a going concern the normal attribution rules apply to any taxable supplies made by the vendor under the arrangement.
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Application of this GST Advice
This Advice applies [to tax periods commencing] both before and after its date of issue. However, this Advice will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Advice (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). |
Commissioner of Taxation
1 February 2006
Not previously issued as a draft
References
ATO references:
NO 05/3095
Related Rulings/Determinations:
TR 2006/10
GSTR 2002/5
Subject References:
GST-free
GST supply of going concern
GST property and construction
GST sale of real property
GST substantial renovations
Legislative References:
ANTS(GST)A 1999 38-325(2)(b)
TAA 1953 Sch 1 Div 358
| Date: | Version: | Change: | |
| 1 February 2006 | Original ruling | ||
| You are here | 31 October 2012 | Consolidated ruling | Addendum |
| 9 July 2014 | Withdrawn |