The ATO, on Thur 9.5.2013, released a Decision Impact Statement on the decision in AAT Case [2013] AATA 136, Re The Private Tutor and FCT.
In that case, the AAT held that a taxpayer was carrying on an enterprise during the relevant period and therefore set aside the Commissioner’s decision cancelling his GST registration.
But the AAT went on to deny the taxpayer’s input tax credit claims, and therefore affirmed the Commissioner’s assessments of the taxpayer’s net amounts for the relevant period, based on the fact that the taxpayer had claimed credits in respect of acquisitions, which were not subject to GST (eg mortgage and loan repayments, private health insurance, food, beverage etc). It was not however, based on s105-65, which the AAT said was not “designed nor drafted” to be used as an authority for “recovering an amount from” a taxpayer.
With respect to this case, the ATO said that:
- on the carrying on an ‘enterprise’ issue, the Commissioner accepts that the decision of the Tribunal was open on the facts of the case.
- However, it said in relation to its approach to s 105-65, it “respectfully maintains the views” as set out in Miscellaneous Tax Ruling MT 2010/1 (which formed the basis of raising the assessments in the case). The ATO considers that s 105-65 is “predicated on examination of individual transactions, rather than on overall net amounts for particular tax periods”.
[LTN 87, 9/5/13]