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Edited version of your private ruling
Authorisation Number: 1012169704465
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Ruling
Subject: sale of commercial property
Questions:
Am I required to be registered for GST?
Is the sale of the commercial property subject to GST?
Answers:
No. You are not required to be registered for the GST.
No. The sale of the commercial property is not subject to GST.
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You and your husband are carrying on an enterprise of leasing commercial property.
Neither you nor your husband is registered for the goods and services tax (GST).
You and your husband do not have any other enterprises at present .
You are not a non-profit body.
Your annual turnover from your enterprise for both current and projected turnover is less than $75,000.
You intend to sell the commercial property that you are leasing.
Reasons for decision
Under subsection 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you are required to be registered under this Act if you are carrying on an enterprise, and your GST turnover meets the registration turnover threshold.
You are carrying on an enterprise of leasing commercial premises. Therefore, you satisfy the first requirement for registration. To satisfy the second requirements, your GST turnover must meet the registration turnover threshold.
Subsection 188-10 (1) of the GST Act states that you have a GST turnover that meets a particular turnover threshold if:
· your current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold; or
· your projected GST turnover is at or above the turnover threshold.
Regulation 23-15.01 of A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) states that the registration turnover threshold for non-profit bodies is $75,000.
You have stated that your current and projected turnover is less than $75,000. Therefore, as your turnover does not meet the GST registration turnover, you are not required to be registered.
For the supply of anything to be a taxable supply under the GST Act, the supply must satisfy all of the provisions of section 9-5 of the GST. This section states:
You make a taxable supply if:
(a) you make the supply for *consideration; and
(b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and
(c) the supply is *connected with Australia; and
(d) you are *registered, or *required to be registered.
However, the supply is not a *taxable supply to the extent that it is *GST-free or *input taxed.
(* Denotes a term that is defined in section 195-1 of the GST Act).
In this case you are neither registered for the GST nor are you, based on the facts you provided, required to be registered. Consequently, the sale of the commercial property you intend to make is not a taxable supply and therefore not subject to the GST.
Please Note:
With the intended sale of the commercial property your projected turnover may exceed $75,000.
Section 188-25 of the GST Act states that in working out your projected GST turnover to disregard any supply made, or likely to be made, by you by way of transfer of ownership of a capital asset of yours. In addition, this section states to disregard any supply made, or likely to be made, by you solely as a consequence of ceasing to carry on an enterprise or substantially and permanently reducing the size or scale of an enterprise.
Thus, even though your projected turnover may exceed $75,000 with the sale of your commercial property, in calculating your projected GST turnover, you must disregard the revenue from such a sale. Consequently, your projected GST turnover will not meet the GST turnover threshold.