The taxpayer has appealed to the Full Federal Court against the decision in Rio Tinto Services Ltd v FCT [2015] FCA 94. The Federal Court had dismissed the taxpayer’s appeal concerning its entitlement to input tax credits (ITCs) for certain acquisitions relating to mining accommodation (employee/contractor housing) in WA.

[LTN 50, 16/3/15]

FJM Note

As I noted last month, the taxpayer might have more success in submitting that the housing the taxpayers provided to their staff was “commercial residential premises” and therefore not ‘input taxed under s40-35 of the GST Act. That in turn would mean that the acquisition of these houses, the acquisition of the land and materials to construct these houses and the acquisition of the ancillary services, were for a ‘creditable purpose’ under s11-15(1)&(2)(a) of the GST Act, allowing ‘input tax credits’ to be claimed.

The argument that the supply of this housing (and ancillary services) was the supply of ‘commercial residential premises’ would hinge on the definition of that term in s195-1 of the GST Act. It could be, for instance, that these premises, in this context (including the work context, location, proximity to other such houses, the size of the development for similar occupants and ancillary services supplied) were “similar to” a “motel” or “caravan park” under paragraphs (a), (e) & (f) of the definition of “commercial residential premises”.

Then, under Division 87 of the GST Act, the taxpayers would only have to pay 50% of the usual GST on the supply of such ‘commercial residential premises’. This 50% discount is only available, however, if the supply to the occupants of the relevant dwelling, was for a continuous period of at least 28 days (which I assume it was).