The Commissioner has appealed to the Federal Court from the AAT decision in STNK and FCT [2021] AATA 3399. The Taxpayer lost the substantive part of the review, but the Tribunal found that the ‘anti-avoidance’ provisions in Div 165 of the GST Act did not apply. It is this aspect of the case that the Commissioner is appealing.
The AAT case is discussed in this related TT Article.
- The taxpayer was unsuccessful in proving that one group of supplies were GST-free under the precious metal refining rules in s 38-385 of the GST Act. There was no proof that the requisite refining had been done. In addition, the taxpayer was unable to prove that it met the definition of a dealer in precious metal. Accordingly, the taxpayer was liable for the GST on the supplies it made – which resulted in penalties being imposed. However, the Tribunal agreed that a second group of supplies were GST-free pursuant to s 38-185, ie as an export.
- The Commissioner was unsuccessful in establishing that the anti-avoidance provisions, in Div 165 did not apply – which meant the taxpayer could claim related input tax credits (ie in relation to the exported goods). It concluded that the taxpayer had discharged the burden of proving that it would not be concluded that any entity had a dominant purpose of securing its entitlement, ie in the whole transaction chain. A key factor seems to be that the taxpayer had few if any dealings with the entities involved in the supply sequence preceding its acquisition of gold. It will be interesting to see if this aspect of the case is argued in the Federal Court.
[Tax Month – October 2021 – Previous Tax Month] 23.10.21 [LTN 203, 21/10/21]