The Victorian Supreme Court has ordered that interest on refunded stamp duty be paid at the maximum penalty rate under the Supreme Court Act (10%) and not at a lower “market rate” under the Victorian Taxation Administration Act.

See below for further details.

[Tax Month – July 2021]



In March 2021, in 2 related proceedings, the Commissioner of State Revenue was ordered to refund stamp duty. The issue in this case was the rate of interest to be paid on the refunded duty.

The Court agreed with the taxpayers that interest should be paid at the penalty rate of 10% per annum pursuant to s 58 of the Supreme Court Act 1986 (Vic) (SCA) and not, as contended by the Commissioner, at a rate that reflects the market rate under s 25(1)(a) of the Taxation Administration Act 1997 (Vic) (TAA).

This was because the proceedings were under Pt 4 TAA (where no assessment has been issued). If the proceedings had been under Pt 10 TAA (where an assessment has been issued), the rate of interest would have been determined under the TAA and not the SCA.

The Court added that awarding interest pursuant to s 58 SCA at the maximum penalty rate is consistent with the purpose of seeking to encourage early resolution of disputes by all litigants, including the Commissioner.

(Razzy Australia Pty Ltd & Anor v Commissioner of State Revenue [2021] VSC 409, Vic Supreme Court, Delany J, 7 July 2021.)

[LTN 137, 20/7/21]

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