In a positive move, the ATO has released an internal training presentation on the retention of refunds. The presentation can be accessed here.

The presentation addresses the following issues:

• the law and the ATO practices before the decision in Multiflex;
• the decision in Multiflex and its consequences
• the legislation introduced after the decision in Multiflex.

The ATO should be commended for providing access to this document. The retention of GST refunds by the ATO is a controversial and complex issue. Hopefully publishing this document will provide taxpayers and practitioners with a greater insight into the mind of the ATO then it acts to stop the payment of refunds.

Also, on Friday the following legislative instruments were released. The Instruments waive the requirements for recipients to comply with the requirements for tax invoices in certain circumstances:

• A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Acquisitions from or Acquisitions by a Beneficiary of a Bare Trust) Legislative Instrument 2013 
• A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Creditable acquisitions by a Lessee or Sub-Lessee following a Sale of a Reversion in Commercial Premises) Legislative Instrument 2013
• A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Acquisitions where Total Consideration Not Known) Legislative Instrument 2013
• A New Tax System (Goods and Services Tax) Waiver of Tax Invoice Requirement (Offer Documents and Renewal Notices) Legislative Instrument 2013
  

The Legislative Instruments are made by the Deputy Commissioner of Taxation under s 29-10(3) of the GST Act. Each of the Legislative Instruments commence on 1 July 2010 and apply to net amounts for tax period commencing on or after 1 July 2010.

The Legislative Instrument dealing with the sale of a reversion in commercial premises is interesting. The Explanatory Statement at [17] states as follows:

The purchaser of a reversion in commercial premises (the current owner in the context of this instrument) makes a supply to the lessee under paragraph 9-10(2)(g) by way of entering into an obligation to honour the terms of the lease. Where the requirements of section 9-5 are satisfied, this supply is a taxable supply. [4].

[4] Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty Ltd (2006) 152 FCR 461. See also Goods and Services Tax Determination GSTD 2012/2 Goods and services tax: what are the goods and services tax consequences following the sale of commercial premises that are subject to a lease? for the Commissioner’s views on the GST consequences following the sale of commercial premises that are subject to a lease.

This part of the Explanatory Statement appears to be in direct conflict with the decision of the Full Federal Court in South Steyne Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 155, where each of the three judges found that the sale of three apartments subject to a lease did not constitute a new or a further supply (see Finn J at [3], Emmett J at [34], Edmonds J at [76]). Edmonds J was the only judge to refer to the early decision of the Full Federal Court in Westley Nominees (in which he sat). These findings were adopted by Griffiths J in MBI Properties Pty Ltd v Commissioner of Taxation [2013] FCA 56 which dealt with a subsidiary issue arising out of South Steyne (the taxpayer has appealed that decision to the Full Federal Court).

While this paragraph in the Explanatory Statement does not impact on the Legislative Instrument, it does appear to reflect the continued view  of the Commissioner that the view of the Full Federal Court in Westley Nominees reflects the legal position where an entity acquires a reversionary interest in commercial premises, notwithstanding the clear findings of three judges of the Full Federal Court in a later decision.