The ATO on Fri 28.9.2012, released a Decision Impact Statement on the Federal Court decision in ECC Southbank Pty Ltd as trustee for Nest Southbank Unit Trust & Anor v FCT [2012] FCA 795. The Federal Court held that a sub-lease of student accommodation was a supply of commercial premises and that supplies of accommodation to 3 individuals were taxable supplies.
On the facts of this matter, the ATO says it was open to the Court to conclude that the premises met the ordinary meaning of the term “hostel”, or were similar to a hostel, and therefore commercial residential premises. His Honour’s decision focuses upon a specific dictionary meaning of the term “hostel” that is relevant to premises used to provide accommodation to students, the ATO said.
The ATO acknowledged that the decision does not support the preliminary view expressed in Draft GSTR 2012/D1 that it is necessary for occupants to have the status of a guest in order for the premises to satisfy paras (a) or (f) of the definition of “commercial residential premises”. His Honour characterised the premises as a hostel, or similar to a hostel, even though the shared apartments and studio apartments may be occupied by individuals as their principal place of residence.
The ATO considers that the preliminary views expressed in Draft GSTR 2012/D1 in respect to characterising premises as a hotel, motel, and inn are broadly consistent with his Honour’s decision. However, the Commissioner said he will review the preliminary views set out in the Draft Ruling to ensure that the views expressed are consistent with the Court’s decision.
[LTN 189, 28/9]