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ATO Interpretative Decision

ATO ID 2001/645 (Withdrawn)

Goods and Services Tax

GST and the sale of a capital asset
FOI status: may be released
  • This ATO ID is a straight application of the law and does not contain an interpretative decision. Further information on this issue is available in GST and the disposal of capital assets (NAT 7682 - 11.2004)
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the entity, a business, making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it sells a capital asset?

Decision

Yes, the entity is making a taxable supply under section 9-5 of the GST Act when it sells a capital asset.

Facts

The entity is a business. The entity is selling a capital asset in Australia for consideration. The entity is selling this capital asset in the course of an enterprise that it carries on.

The entity is registered for goods and services tax (GST).

Reasons for Decision

Under section 9-5 of the GST Act, an entity makes a taxable supply if:

•
it makes the supply for consideration;
•
the supply is made in the course or furtherance of an enterprise that the entity carries on;
•
the supply is connected with Australia; and
•
the entity is registered or required to be registered for GST.

However, the supply is not a taxable supply to the extent that it is GST-free or input taxed.

From the facts above, the entity is registered for GST and is selling the capital asset in Australia, for consideration in the course of an enterprise that it carries on.

Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act when it sells a capital asset.

Date of decision:  23 October 2001

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   section 9-5
   Division 38
   Division 40

Keywords
Goods & services tax
GST supplies & acquisitions
Taxable supply

Business Line:  GST

Date of publication:  29 November 2001

ISSN: 1445-2782

history
  Date: Version:
  23 October 2001 Original statement
You are here 16 September 2005 Archived

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