Tribunal hands down decision on “increasing adjustments” under Division 135 on the purchase of apartments

The decision of the Federal Court earlier this year in MBI Properties Pty Ltd v Commissioner of Taxation could be described as the “son of South Steyne”. Yesterday the Tribunal handed down its decision in The Hotel Apartment Purchaser and Commissioner of Taxation [2013] AATA 567 which involves the same apartment complex  and a decision which could be described a the “grandson” of South Steyne.

The case involved the taxpayer’s liability to “increasing adjustments” under Division 135 of the GST Act with regards to the purchase of two apartments in the Sebel Manly Beach Complex. The purchase was treated as a going concern and the Commissioner claimed that the taxpayer had increasing adjustments because of continuing input taxed supplies made in relation to the apartments. A further issue was whether the Commissioner was too late in making the assessment (the Notice to Pay was issued more than four years after the end of the tax period, but before the date of lodgement of the BAS). The Tribunal affirmed the Commissioner’s decision.

The Tribunal also briefly discussed the ability of a “partnership” (being an entity for the purposes of the GST law) to apply for review under Part IVC of the TAA.

My analysis of the decision can be accessed here.

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