The AAT has found that a taxpayer has failed to satisfy the burden of proving that she was carrying on an enterprise under s 9-20 of the GST Act for the period 1 August 2008 to 30 June 2010. Accordingly, the AAT affirmed the Commissioner’s decision to deny the taxpayer’s claims for input tax credits, and impose an administrative penalty of 50%.
The taxpayer contended that she was carrying on an enterprise involving a school friend and a “mentor” for the relevant periods with the intention of developing a software package for managing human resource functions of the mining sector. However, she said she was unable to provide any records of the enterprise due to a burglary, which she said also eventually shut down the enterprise as the code for the software package being developed was also stolen.
The Tribunal noted the taxpayer was unable to present any evidence from the “mentor”, school friend, suppliers, and other people in business she had dealt with, to prove that she was carrying on an enterprise. Therefore, the AAT held there were “insuperable obstacles to finding that the taxpayer was carrying on an enterprise”. In conclusion, the AAT confirmed the Commissioner’s decision to deny the taxpayer’s claim for input tax credits for the period 1 August 2008 to 30 June 2010. Additionally, the AAT also agreed that the 50% shortfall penalty imposed by the Commissioner was appropriate.
(AAT Case [2012] AATA 473, Re Campbell and FCT, AAT, Ref No 2011/1169, McCabe SM, 25 July 2012.)
[LTN 143, 26/7]