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Edited version of private advice
Authorisation Number: 1051650306723
Date of advice: 27 March 2020
Ruling
Subject: Application of section 38-250 of the GST Act
Question
Is the sale of residential premises, 'a supply of accommodation' for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act?
Answer
Yes, the sale of residential premises, is a supply of accommodation for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act.
Relevant facts and circumstances
Entity is endorsed as a charity and as a deductible gift recipient. Entity is registered for goods and services tax (GST).
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 (GST Act) subparagraph 38-250(1)(b)(i)
Reasons for decision
Subparagraph 38-250(1)(b)(i) of the GST Act provides that the supply is for consideration that if the supply is a supply of accommodation - is less than 75% of the GST inclusive market value of the supply.
Therefore, it needs to be determined if the supply is a supply of accommodation. Neither the word 'accommodation' or 'supply of accommodation' are defined terms in the GST Act.
Judge Kerr J determined in Melbourne Apartment Project Pty Ltd (As Trustee for Melbourne Apartment Project) and Commissioner of Taxation that 'a liberal construction must be given to the provisions of section 38-250 because it is remedial or beneficial legislation.'
Kerr J also states that 'the High Court has stated on many occasions that the language which has actually been employed in the text of the legislation is the surest guide to legislative intention. I discern nothing in the text of 38-250 itself can support the Commissioner's submission that the expression 'supply of accommodation' is inapt to cover the supply of title to premises, albeit that the purchaser may intend to live or stay in the premises, and instead contemplates only the supply of a right to occupy premises for the time being.'
As such, it is considered that the sale of the residential premises by the entity, is a supply of accommodation for the purposes of subparagraph 38-250(1)(b)(i) of the GST Act.
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