The AAT has affirmed the Commissioner’s objection decisions disallowing the taxpayers’ objections to private rulings concerning second-hand aircraft acquired before 1 July 2000. The AAT decisions concerned 2 matters. The AAT noted that although the taxpayers in the 2 matters were different entities, the applications were heard concurrently because of the extensive overlap of the factual and legal issues involved.
Both matters concerned the acquisition of second-hand aircraft and entitlement to GST input tax credits. Specifically, the taxpayers sought to claim input tax credits for the aircraft they acquired before 1 July 2000 under s 66-5 of the GST Act and s 18 of the A New Tax System (Goods and Services Tax Transition) Act 1999.
Essentially, the AAT held the taxpayers had not acquired the aircraft for the purposes of sale or exchange in the ordinary course of their businesses for the purposes of s 66-5. It found the taxpayers’ ordinary course of business was the leasing of aircraft. The AAT also rejected contentions that the application of s 18 of the Transition Act allowed purpose to change over time and that on 1 July 2000, the taxpayers held the aircraft for the purposes of sale or exchange. The AAT said the Transition Act “requires the goods to be held for the purposes of sale or exchange in the ordinary course of business and that they had not previously been held for any other purpose.”
The second matter also dealt with the operation of the GST grouping provisions. However, given the AAT’s findings in the first matter concerning s 18, the AAT also affirmed the Commissioner’s objection decision in the second matter.
(AAT Case [2012]AATA 407; AAT Case [2012] AATA 408, AAT, Ref Nos: 2011/3714 & 2011/4808, Fice SM, 29 June 2012.)
[LTN 126, 3/7]