The AAT has affirmed the Commissioner’s private ruling that a taxpayer was not entitled to a decreasing GST adjustment as a consequence of it no longer being registered, or required to be registered, for GST.
The taxpayer was registered for GST and acquired land and developed a retirement village in 2000. It then deregistered for GST purposes in October 2006 and the development was sold in April 2007 as new residential premises without GST applying.
In 2011, the taxpayer claimed an entitlement to a decreasing adjustment and lodged a request for a private ruling. The Commissioner issued an adverse ruling indicating that the taxpayer was not entitled to make a decreasing adjustment as it did not have a “tax period” applicable to it as a result of not being registered. Broadly, the taxpayer argued that it did have an adjustment period, which was determined in accordance with s 129-25(1) of the GST Act, while the Commissioner contended that ss 129-20 and 129-25 cannot operate unless there is a tax period.
The Tribunal agreed with the Commissioner that the taxpayer did not have a tax period applying to it at the time of the claims for a decreasing adjustment. It did so on the basis that the taxpayer’s arguments were contrary to the scheme of the GST Act and in its view, Div 129 on its proper construction, cannot have any application to an entity that was neither registered nor required to be registered. Therefore, the AAT affirmed the Commissioner’s ruling that the taxpayer was not entitled to a decreasing adjustment (GST refund).
(AAT Case [2013] AATA 199, Re GOL-HUT Pty Ltd as trustee for the Helensvale Unit Trust and FCT, AAT, Ref No 2012/3670, Hack DP, 5 April 2013.)
[LTN 65, 8/4/13]