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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1012987153348

Date of advice: 1 April 2016

Ruling

Subject: GST-free supply of a going concern

Question

Was the supply by Entity A to the Purchaser on completion of the business contract a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Answer

Yes, the supply by Entity A under the terms of the Business Contract was a GST-free supply of a going concern because all the requirements of section 38-325 of the GST Act were satisfied as follows:

Relevant facts

Entity A operated the Business under licence from and using the assets owned by the Entity B, on the terms of the business license.

The business license confirms that Entity B, the owner of the business, has granted entity A an exclusive license to use the assets and to operate the business and a license fee is payable.

The business premises are leased from an unrelated third party.

Under the terms of the business contract, Entity A agreed to sell assets it owns and used in carrying on the Business including its rights under the business licence.

The Entity B agreed to sell the goodwill of the Business and other Licensed Assets and its rights under the Business Licence on the terms set out in the Business Contract.

The Business Contract contains the following clauses:

Completion of the Business Contract occurred on dd/mm/yyyy.

The Entity A operated the business up to the completion date.

The Entity B, Entity A and the Purchaser are all registered for GST.


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