Annotated GST Act – Chapter 2 – Part 2-2 – Division 9

Division 9 – Taxable supplies

Subdivision 9-A – What are taxable supplies

Cases

Lighthouse Financial Advisers (Townsville) Pty Ltd [2014] AATA 301 – whether settlement of legal matter involved a taxable supply – whether payment was consideration for release from restraint clause or surrender of right to sue

ATS Pacific Pty Ltd v Commissioner of Taxation [2014] FCAFC 33 – characterisation of the supply by Australian travel agents or tour operators to non-resident travel agents or tour operators in booking or arranging accommodation, goods and services for the customers of the non-resident travel agents or tour operator (Case analysis) – first instance [2013] FCA 341 (Case analysis)

AP Group Limited v Commissioner of Taxation [2013] FCAFC 105 – whether GST payable on various motor vehicle incentive payments received by car dealers from car manufacturers – whether taxable supply by car dealers (Case analysis) – first instance [2012] AATA 617 – decision on principles – [2012] AATA 409

Commissioner of Taxation v Qantas Airways Ltd [2012] HCA 41 – taxpayer made taxable supply to passengers where the passengers did not show for flight – at [33]: the taxpayer supplied to customers at least a promise to use best endeavours to carry the passenger and baggage, having regard to the circumstances of the business operations of the airline – this was a a “taxable supply” for which the consideration, being the fare, was received – appeal [2011] FCAFC 113 – tribunal [2010] AATA 977

Commissioner of Taxation v Secretary to the Department of Transport (Victoria) [2010] FCAFC 84 – the Department made a creditable acquisition in respect of payments made under a statutory taxi program which provided subsidised fares for disabled passengers – at [39]: the arrangement can be seen as tripartite (involving the taxi-cab operator, the member and the DOT), whether there is a taxable supply from the taxi-cab operator to the DOT, for which the DOT gives consideration, calls for a different analysis from the question whether there is a taxable supply by the taxi-cab operator to the member, for which the member gives consideration. The answer to the one enquiry is not necessarily determinative of the answer to the other – at [56]: there were two supplies by the taxi-cab operator, the supply of transport to the member and the supply to the DOT of the transport of the member – the payments by DOT were “in connection with” that supply

Waverley Council and Commissioner of Taxation [2009] AATA 442 – credit card administration fee not a taxable supply where the underlying supply not taxable because it was not subject to GST as a Division 81 charge – at [42]: the administration fee was not a stand alone fee, but was correctly characterised as part of the fee for the underlying supply – there was one payment, and in a practical sense there was one supply

AXA Asia Pacific Holdings Limited v Commissioner of Taxation [2008] FCA 1834 – at [98]-[101]: input taxed supplies and GST-free supplies are taken into s 9-5 by being included in the definition of “supply” in s 9-10 and then taken out of s 9-5 by the proviso at the end of the section

Commissioner of Taxation v Reliance Carpet Co Limited [2008] HCA 22 – vendor made a taxable supply where the purchaser of real estate defaulted and the contract was rescinded and the deposit was forfeited to the vendor – at [41]-[42]: where a contract proceeds to completion there is not a second “taxable supply” as the deposit is applied as consideration for the supply on completion

AGR Joint Venture and Commissioner of Taxation [2007] AATA 1870 – whether a transaction for the supply of coin blanks by the applicant constituted a single taxable supply or two separate supplies, with the first supply the input taxed supply of credit to customer’s metal account and the second supply the service of fabricating the metal into coin blanks – at [34]: in ascertaining whether a transaction should be regarded as several distinct supplies as opposed to one composite supply, it is necessary to consider the true and substantial nature of the consideration given in return for the payment

Food Supplier and Commissioner of Taxation [2007] AATA 1550 – the supply of “free” promotional items with coffee is not GST-free but a separate taxable supply

Saga Holidays Limited v Commissioner of Taxation [2006] FCAFC 191 – whether supply to be characterised by reference to separate components or “essential character” – at [48]: whether the supply of the accommodation was incidental to the supply of the tour

Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty ltd [2006] FCAFC 115 – first instance – [2005] FCA 839 – at [59]-[61]: the Full Court disagreed with the primary judge who found that the rent payable under a shopping centre lease was consideration only for the supply of the premises and the annual percentage rental and contributions to outgoings of the centre was not consideration for that supply – the consideration included the rent and the contribution to outgoings – determining whether expenditure secures an ancillary and incidental separate and discrete supply from the main supply or whether it forms part of the consideration for a single supply reference is to be done by reference to what the expenditure is calculated to effect from a practical and business point of view, rather than upon the juristic classification of legal rights secured, employed or exhausted in the process: referring to Hallstroms Pty Ltd v Federal Commissioner of Taxation (1946) 72 CLR 634 at 648.

Commissioner of Taxation v DB Rreef Funds Management Limited [2006] FCAFC 89 – at [76]: the lease of premises involving office space, store rooms and car parks was a single supply of premises and the consideration for that supply comprised the rent together with the contributions to operating costs

Body Corporate, Villa Edgewater and Commissioner of Taxation [2004] AATA 425 – whether GST payable in respect of contributions by members to body corporate – whether a taxable supply by body corporate to members

International Cases

United Kingdom

Gray & Farrar International LLP v Revenue and Customs [2021] UKUT 293 – matchmaking services – characterization of supply – whether “services of consultants” and/or “the provision of information” – appeal allowed

Revenue and Customs v Tower Resources PLC [2021] UKUT 123 – holding company providing services to subsidiaries – whether FTT failed to make complete findings of fact – whether supplies were made for consideration – whether supplies amounted to an economic activity

Polo Farm Sports Club v Revenue and Customs [2021] UKFTT 360 – whether payment was consideration for the grant of a lease – yes – whether agreement for lease, lease, counterpart lease and counterpart underlease fall to be treated as single transaction – Mydibel and Balhousie Holdings considered – yes – appeal dismissed

All Answers Ltd v Revenue and Customs [2020] UKUT 236 – Whether supply of academic work made by Appellant – agency – commercial and economic reality

Tower Resources Plc v Revenue and Customs [2019] UKFTT 442 – Oil exploration and production in sub-Saharan Africa – Activities undertaken through local subsidiaries – Provision of technical services by Plc – Financed through additions to intercompany loans – Whether supply for consideration – Whether supply made in the course of economic activity – Appeal allowed

All Answers Limited v Revenue & Customs [2018] UKFTT 701 – whether, in principle, the respondent could properly assess the appellant in respect of VAT on 100% of sums of money paid by various students/clients (or others) to it or whether the assessment should have been limited to the appellant’s share (commission) of each gross sum paid

Adecco Uk Ltd v Revenue & Customs [2018] EWCA Civ 1794 – whether Adecco was liable to pay VAT on the full charge paid by its clients for the services of non-employed temps provided by Adecco to those clients or only on the element of the charge retained by it (i.e. the commission or gross profit element) – whether Adecco supplied the temps to its clients or only the service of introducing the temps – appeal dismissed

ASOS Plc v Revenue & Customs [2018] UKFTT 353 – Cancellation – single supply of delivered goods rather than multiple supply – return of goods and refund – retained delivery charge – consideration for supply – liability to VAT – appeal dismissed

Glasgow School of Art v Revenue & Customs [2018] UKFTT 276 – one building or two – one supply or two – in both cases one – economic activity – taxable supply – insufficient link between rental income and supply – appeal dismissed

Mariott Rewards LLC and Whitbread Group PLC v Revenue and Customs [2018] UKUT 129 – “points” based rewards scheme – whether payments made to redeemers third party consideration for supply of rewards – no – whether redeemers made separate supplies to operator of scheme – yes – whether those separate supplies relate to immovable property or constitute advertising services – no – appeals dismissed

Harley-Davidson Europe Ltd v Revenue & Customs [2017] UKUT 873 – VAT – single or multiple supplies – whether subscriptions paid by members of the Harley Owners Group are consideration for a supply of membership or for multiple supplies comprised of the individual benefits conferred – held multiple, not single, supplies

Revenue and Customs v Metropolitan Intenational Schools Ltd [2017] UKUT 431 – distance learning courses – classification of supply – whether supply of books within item 1 Group 3 Schedule 8 VATA 1994 – whether single supply of educational services

Revenue and Customs v Wheels Private Hire Ltd [2017] UKUT 51 – rental of taxis – optional insurance – whether insurance transaction for VAT purposes – yes – whether single supply of leasing of insured vehicle or separate supplies of vehicle and insurance – separate supplies – appeal dismissed.

General Healthcare Group Ltd v Revenue and Customs [2016] UKUT 315 – whether the supply to patients of medical or surgical appliances such as artificial hips and pacemakers a single composite supply of exempt medical services or separate supplies of zero rated prosthesis and exempt medical services – appeal dismissed

Friends of the Earth Trust Ltd v Revenue and Customs (2016) UKFTT 411 – whether payments made by supporters of appellant were donations or consideration for supply of magazine and other benefits – (street fund-raisers engaged by appellant charity to sign up passers-by on street to make regular direct debit payments to appellant) – payments were donations not consideration for supply – appeal dismissed

Blue Chips Hotels Ltd v Revenue and Customs [2016] UKFTT 309 – supply of premises for civil wedding ceremony as part of “wedding package” by hotel – single exempt supply of land or standard rated composite supply of wedding package – held –– hire of licensed premises separate supply – not exempt supply of land – appeal dismissed.

Revenue and Customs v Mercedes/Benz Financial Services UK Ltd [2015] EWCA Civ 1211 – whether hire purchase contracts between the applicant and customers with respect to the supply of vehicles was a supply of services or a supply of goods

Cavenbridge Ltd v Revenue & Customs [2015] UKFTT 536 – single or multiple supply – whether dabber/marker pens supplied by bingo hall owner and used to mark paper bingo books integral part of exempt supply of bingo – no – separate supply of goods – appeal dismissed

Metropolitan International Schools v Revenue and Customs [2015] UKFTT 517 – whether the provision of distance learning courses involved a single supply of zero-rated books or standard rated education – case analysis

Wheels Private Hire Ltd v Revenue & Customs [2015] UKFTT 363 – Rental of taxis – optional insurance – whether separate and exempt supply – Yes – VATA 1994, Section 31 and Schedule 9, group 2 – Appeal allowed

Royal Troon Golf Club v Revenue & Customs [2015] UKFTT 121 – VAT – whether a supply by an unincorporated association to its members is a taxable supply by a taxable person – yes – whether an unincorporated association is distinguishable from its members when making supplies –yes – whether supplies are non-taxable because consumed by members of an unincorporated association in a private capacity – no.

Church of Scientology Religious Education College Inc v Revenue & Customs [2014] UKFTT 1064 – VAT – supplies of services by mother church of Scientology religion to churches in the UK – whether single supply or multiple supplies – whether exempt as educational services or standard rated as governance and ecclesiastical management services

Colainagrove Ltd v Revenue & Customs [2015] UKUT 2 – whether veranda sold with a static caravan is zero-rated as part of a single supply – appeal allowed

Finnamore (trading as Hanbidge Storage Services) v HMRC [2014] UKUT – the appellant granted customers a lease or licence over a small area of an open storage depot to customers, whilst also hiring out a shipping container, resting on the relevant small area of land, so that the customer could keep goods securely, and protected from the weather, in such containers – the overarching description of the supply was of the provision of storage services, and that was so regardless of whether the charge for the lease of the land, and the importance of that element, exceeded the charge for the container

Revenue & Customs v Secret Hotels2 Ltd [2014] UKSC 16 – whether company which markets and arranges holiday accommodation though an on-line website and the essential question was whether the appellant was acting as a principal, or as an agent, when making the supplies of hotel accommodation – Case analysis

Director General, Mauritius Revenue Authority v Central Water Authority (Mauritius) [2013] UKPC 4 – whether Central Water Authority entitled to input tax credits for acquisition of water meters to fit in customers’ properties – whether CWA makes a single taxable supply of water or separate input taxed supply of the supply of water meters – Case analysis

Borough Council of King’s Lynn and West Norfolk v Revenue & Customs [2012] UKFTT 671 – Overpayment – Whether consideration for a supply – No – No VAT charge on overpaid amounts – Appeal allowed

David Baxendale Limited v Revenue and Customs [2009] EWCA Civ 831; [2009] STC 2578 – sale of weight loss programme, whether single supply of food packs or single supply of services – judgment appealed from – [2009] EWHC 162

A1 Lofts Ltd v Revenue and Customs [2009] EWHC 2694 – whether taxpayer made a single supply of complete loft conversion or separate supplies of project management services with the tradesmen making separate supplies to the homeowner

Revenue and Customs v Weight Watchers (UK) Ltd [2008] EWCA Civ 715 – weight watcher classes, whether single supply of weight loss programme or separate supplies of printed material and other supplies

Birkdale School v Revenue and Customs [2008] EWHC 407 – fee paid by parents to school for scheme whereby refunds of fees could be claimed in certain circumstances, whether part of single supply of education or separate supply of the right to obtain refunds

Holland v Revenue & Customs [2008] EWHC 2621 – supplies to self-employed hairdressers, whether single supply or composite supplies including the “leasing or letting of immovable property”

Ford Motor Company Ltd v Revenue and Customs [2007] EWCA Civ 1370 – offer of free insurance and breakdown service to buyers, whether separate supply of insurance or single supply of car

Tumble Tots (UK) Ltd v Revenue and Customs [2007] EWHC 103 – fee paid by parent to franchisor to enrol in pre-school classes, whether consideration for single supply of right to receive classes or mixed supply

Level Verzekeringen & OV Bank [2006] STC 766 – a supply to an insurance company of a pre-existing software program, coupled with the supply of considerable services in tailoring the software specifically to meet the customer’s particular requirements, was a supply of services, notwithstanding that the provision of the software in isolation would have been a supply of goods was based on the observation that the customisation services were the predominant element of the supply

Bookit Ltd v Revenue and Customs [2006] EWCA Civ 550 – service provided to cinemagoers, whether single supply of cinema seat booking services or multiple supplies

Byrom, Kane & Kane (t/a Salon 24) v Revenue and Customs [2006] EWHC 111 – he appellant supplied a lease or licence of a room in a building described as a massage parlour to ladies, and also provided various massage parlour services to the ladies – there was a single supply and that the supply was of massage parlour services on the basis that “massage parlour services” was the overarching description that aptly described the totality of the supplies.

Revenue and Customs v Compass Contract Services UK Ltd [2006] EWCA 730 – whether sale of cold prepared food zero rated as supplies of food, whether supplies in the course of catering

Revenue and Customs v Debenhams Retail plc [2005] EWCA Civ 892 – VAT treatment of fee for “card handling service” for purchase of goods, whether single supply or separate supply of service

College of Estate Management v Commissioners of Customs and Excise [2005] UKHL 62; [2005] 4 All ER 933 – supply of education, whether single supply of education services or separate supply of books – judgment appealed from – [2004] EWCA Civ 1086

Beynon and Partners v Commisisoners of Customs & Excise [2004] UKHL 53; [2004] 1 WLR 3172; [2004] 4 All ER 109 – administration of drug to patient, whether single supply of medical services or supply of drug and service of administering drug – judgment appealed from – [2002] EWCA Cic 1870

Talacre Beach Caravan Sales Ltd v Customs and Excise [2004] EWHC 165 – sale of caravan, whether single zero-rated supply of caravan or supply of caravan plus separate taxable supplies of removable contents, whether ancillary supplies or multiple supplies

Ringside Refreshments v Customs and Excise [2003] EWHC 3043 – supply of fast food through outlets controlled by company by staffed by self employed individuals, whether two separate supplies or one supply by individuals as agents of company

Telewest Communications Plc v Customs and Excise [2003] EWHC 3176 – provision of television listing magazines to cable television subscribers, whether single supply of television services or separate supply of magazine, whether ancillary or multiple supplies

Customs and Excise v Plantifor Ltd [2002] UKHL 33; [2002] 1 WLR 2287 – whether seller of goods by mail order liable for tax on postage charges paid by its customers – whether amounts for postage received as agent of the customers or as consideration for a service – found that the seller was acting as a principal and received consideration for providing a service of arranging delivery of the goods

Card Protection Plan Limited v Commissioners of Customs and Excise [2001] UKHL 4; [2001] 2 All ER 143; [2001] 2 WLR 329 – VAT treatment of card fee, whether separate supply or single supply of insurance

Commissioners of Customs and Excise v British Telecommunications Plc [1999] UKHL 3; [1999] 3 All ER 961; [1999] 1 WLR 1376 – acquisition and delivery of motor vehicles, input tax credits on transport costs, whether separate supplies

Neil Gwynn House Maintenance Fund v Commissioners of Customs and Excise [1998] UKHL 50; [1999] 1 All ER 385; [1999] 1 WLR 174 – whether VAT payable on services provided by Maintenance Fund to tenants in return for a maintenance contribution

Canada

Canadian Legal Information Institute v The Queen 2020 TCC 56 – whether CANLII makes a taxable supply by operating its virtual library – whether CANLII makes a supply for consideration or for no consideration – whether entitled to input tax credits – meaning of “consideration”

Dr Brian Hurd Dentistry Professional Corporation v The Queen 2017 TCC 142 – whether there was one supply of orthodontic treatment to a dental patient or two supplies, an orthodontic appliance and an orthodontic service – whether single zero rated or exempt supply, or if distinct supplies whether those supplies were zero rated or exempt – held that the taxpayer made a single exempt supply of orthodontic treatment

The Great-West Life Assurance Company v The Queen 2015 TCC 225 – whether the fee payable by the taxpayer insurance company to a third party to perform services in relation to the determination and payment of benefits under the prescription and dental components of group health plans entered between the insurance company and employers constituted consideration for a taxable supply or a “financial service” as defined in s 123(1) of the Excise Tax Act – at [65]: the Court accepted that the supply was a single supply as the various services were intertwined, interdependent and integral to one another – at [69]: to determine whether the supply constitutes a “financial service” the Court must first determine the essential character, or substance, of what is being supplied and then determine whether the supply falls within the definition of “financial service” – at [78]: the essence of the service was the payment of the plan benefit to the plan member, the other services simply supported this objective – at [83]: the supply fell within the definition of a “financial service” as “the payment or receipt of an amount in full or partial satisfaction of a claim arising under an insurance policy”

Tele-Mobile Company v The Queen 2015 TCC 197 – whether the supply of a telecommunication service of roaming airtime in the US was part of a single supply of telecommunication services which included long distance calls from the US to Canada or a separate supply taking place entirely in the US

Calgary (City) v Canada 2012 SCC 20 – Single supply or multiple supplies ― City acquiring and constructing transit facilities ― City claiming and receiving public service body rebates for portion of GST paid ― City also claiming input tax credits in respect of GST paid on purchases made for transit facilities ― Whether acquisition and construction of transit facilities constituting an exempt supply, a taxable supply or both ― Whether “transit facilities services” a taxable supply to the Province separate from exempt supply of “public transit services” to public –Case analysis

Surrey City Centre Mall Ltd v The Queen 2012 TCC 346 – whether GST payable on amount received for the breach/termination of an agreement to make a taxable supply – Case analysis.

Global Cash Access (Canada) Inc v The Queen 2012 TCC 173 – whether fees paid to Casino operator were for exempt financial supplies or taxable – characterisation of supplies – case analysis

Rulings and Determinations

GSTR 2014/3 ‘Goods and services tax: the GST implications of transactions involving bitcoin’

GSTR 2014/2 ‘Goods and services tax: treatment of ATM service fees, credit card surcharges and debit card surcharges’

GSTR 2014/1 ‘Goods and services tax: motor vehicle incentive payments’

GSTR 2012/2 – financial assistance payments

GSTR 2012/1 – Goods and services tax: loyalty programs

GSTR 2009/3 – Austlii – Goods and services tax: cancellation fees

GSTR 2009/2 – Austlii – Goods and services tax: partitioning of land

GSTD 2009/1 – Austlii – Goods and services tax: is a supply by way of an in specie distribution of an asset that is applied in an enterprise carried on by a discretionary trust to a beneficiary of the trust made ‘in the course or furtherance of’ the trust’s enterprise?

GSTD 2005/5 – Austlii – Goods and services tax: are supplies of membership and membership services made by a tread exchange to its members taxable supplies?

GSTR 2003/14 – Austlii – Goods and services tax: the GST implications of transactions between members of a barter scheme conducted by a trade exchange

GSTR 2003/6 – Austlii – Goods and services tax: transfers of enterprise assets as a result of property distributions under the Family Law Act 1975 or in similar circumstances

GSTR 2002/3 – Austlii – Goods and services tax: Prizes

GSTR 2001/4 – Austlii – Goods and services tax: GST consequences of court orders and out-of-court settlements

GSTD 2000/12 – Austlii – Goods and services tax: is the provision of labour hire services a taxable supply in terms of section 9-5 of the GST Act?

GSTD 2000/7 – Austlii – Goods and services tax: is the supply of the services of apprentices or trainees by a Group Training Company to host employers under a Group Training Scheme a taxable supply in terms of section 9-5 of the GST Act?

9.10 Meaning of supply

Cases

Commissioner of Taxation v MBI Properties Pty Ltd [2014] HCA 49 – the purchaser of reversionary interest in land makes a supply to the lessee – appeal – [2013] FCAFC 112 (Case analysis) – first instance [2013] FCA 5 (Case analysis)

The Trustee for Naidu Family Trust and Commissioner of Taxation [2011] AATA 910 – the supply of real property occurs on settlement of contract for sale of real estate

Reglon Pty Limited v Commissioner of Taxation [2011] FCA 805 – taxpayer who obtained judgment in conversion against defendant in respect of goods did not make a supply of those goods to the defendant, notwithstanding that the effect of the judgment was to vest the ownership of the goods in the defendant – at [32]: the transfer of ownership in the goods, and the extinguishment of the taxpayer’s ownership by operation of law, occurred without assent and was triggered by the payment of the judgment sum by the defendant – the payment did not depend upon any action of the taxpayer and in those circumstances the taxpayer did not make a supply (Case analysis)

Commissioner of Taxation v Luxottica Retail Australia Pty Ltd [2011] FCAFC 20 – the sale of spectacles was a single supply of spectacles comprising a frame with the lenses fitted and not two supplies, being a supply of the frame and a supply of the lenses – at [15]: while “supply” is defined broadly, it nevertheless invites a commonsense, practical approach to characterisation (Case Analysis) – first Instance [2010] AATA 22

SXGX and Commissioner of Taxation [2011] AATA 110 – the sale of land by the applicant to the Qld government was a supply – that the land was within an area identified for compulsory acquisition and that the resumption process had commenced, did not affect this conclusion as it was not a compulsory acquisition

Commissioner of Taxation v Gloxinia Investments (Trustee) [2010] FCAFC 46 – at [87]: s 9-10(1) indicates that a narrow or restricted interpretation is not intended by the notion of supply and in particular it does not permit, unless the particular context of the provision in question requires it, any restriction to what was posited as physical supply as opposed to other forms of supply – first instance – [2009] FCA 641

South Steyne Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 155 – the sale of residential apartments subject to leases did not constitute a new or further supply to the lessee by the purchaser of the reversion – first instance – [2009] FCA 13

Hornsby Shire Council and Commissioner of Taxation [2008] AATA 1060 – the compulsory acquisition by the Council of a quarry from CSR pursuant to a notice issued by CSR requiring the Council to acquire the land involved a “supply” by CSR within the meaning of s 9-10 – there was a relevant nexus between the giving of the statutory notice and the acquisition of the land – at [70]: there is support in the authorities for the view that some positive action is required by the supplier for there to be a supply

Commissioner of Taxation v Reliance Carpet Co Limited [2008] HCA 22 – at [37]-[38]: the contractual obligations of a vendor on entering into a contract of sale involved a supply by the vendor in terms of s 9-10(2)(g) and a supply in terms of s 9-10(2)(d) pursuant to the extended definition of “real property” as there was upon exchange of contracts the grant by the taxpayer to the purchaser of contractual rights exercisable over or in relation to land, in particular of the right to require in due course conveyance of the land to it upon completion of the sale

Saga Holidays Limited v Commissioner of Taxation [2006] FCAFC 191 – at [46]: the definition of “supply” in s 9-10(1) is just about as wide as possible and the examples in s 9-10(2) are inclusive not exhaustive

Westley Nominees Pty Ltd v Coles Supermarkets Australia Pty ltd [2006] FCAFC 115 – first instance – [2005] FCA 839 – at [22]: the purchaser of a reversionary interest in land makes a supply to the tenant under s 9-10(2)(g) by assuming the legal obligation to honour the lease – at [23]: while not necessary to decide, the indications point away from the conclusion that the purchaser made a supply within its ordinary meaning in s 9-10(1) by way of lease of the exclusive possession of the premises

CSR Ltd v Hornsby Shire Council [2004] NSWSC 946 – at [21] – whether owner of land made a taxable supply to Council where the Council compulsorily acquired land

Walter Construction Group Ltd v Walker Corporation Ltd [2001] NSWSC 283 – at [473] – obligation to pay a judgment debt or payment of the judgment debt does not constitute a supply

Shaw v Director of Housing and State of Tasmania (No.2) [2001] TASSC 2 – whether payment of judgement sum a supply

International Cases

Revenue and Customs v Pertemps Ltd [2019] UKUT 234 – operation of salary sacrifice scheme to provide travel and subsistence payments to employees – whether supply for VAT purposes – no – whether economic activity – no – appeal dismissed.

Saunders v Revenue and Customs [2019] UKFTT 126 – VAT – supply – criminal conduct resulting in a total failure of consideration – whether a “supply” of goods or services – No.

Hedqvist [2015] EUECJ C-264/14 (European Court of Justice) – bitcoin transactions are constitute the supply of services for consideration – the transactions are exempt transactions as they are to be treated the same as the exchange of traditional currencies

WHA Limited v Her Majesty’s Revenue and Customs [2013] UKSC 24 – whether motor vehicle repairers making supply of repair services to company who pays the repair costs instead of, or as well as, to the insured – Case analysis – Case analysis

Vehicle Control Services Limited v The Commissioners for Her Majesty’s Revenue & Customs [2013] EWCA Civ 186 – whether taxpayer liable to pay VAT on parking penalty charges – whether charges consideration for supply of goods or services or payments of damages – Case analysis

David Peters Ltd v Revenue & Customs [2012] UKFTT 124 – input tax – taxpayer paid for goods which were not delivered – whether supply – whether taxpayer entitled to credit for input tax – Case analysis.

The Boots Company Plc v HM Revenue & Customs [2009] EWCA Civ 1396; [2010] STC 637 – treatment of sales promotions whereby customers received vouchers entitling to $ off the cost of a future purchase, attribution of price to goods and voucher provided

Revenue and Customs v Total UK Ltd [2007] EWCA Civ 987 – VAT treatment of scheme whereby customers purchase fuel and receive vouchers for goods and services from national retailers, whether VAT payable by Total on supply of fuel reduced by value of vouchers

Eastbourne Town Radio Cars Association v Commissioners of Customs & Excise [2001] UKHL 19 – application for deregistration for VAT, whether supplies made to members

Ashfield District Council v Commissioners of Customs and Excise [2001] EWHC Ch 462 – grants provided by local housing authority to local builders, whether supply by builders to the applicants for the grant or the authority who paid the builders,

Rulings and Determinations

GSTR 2014/3 ‘Goods and services tax: the GST implications of transactions involving bitcoin’ – a transfer of bitcoin from one entity to another is a supply for GST purposes – the exclusion from the definition of “supply” for supplies of money does not apply to bitcoin because bitcoin is not “money” for the purposes of the GST Act.

GSTR 2006/9 – Austlii – Goods and services tax: supplies

GSTD 2005/6 – Austlii – Goods and services tax: does a club, association, trade union, society or co-operative make a supply when it imposes a non-statutory fine or penalty on a member for a breach of the association’s rules?

GSTD 2001/2 – Austlii – Goods and services tax: is the sale of goods by a lessor on expiry of a lease agreement a separate supply to the lease of the goods?

9-15 Consideration

Cases

WYPF and Commissioner of Taxation [2021] AATA 3050 –margin scheme – whether construction of apartments is non-monetary consideration for acquisition of 99-year leases from Australian Capital Territory development authority – whether excess GST passed on – held building works not consideration for acquisition of leases – held excess GST not passed on

McKinnon Holdings (NSW) Pty Ltd as Trustee for the McKinnon Equipment Trust and Commissioner of Taxation [2016] AATA 917 – whether the applicant was entitled to input tax credits in respect of the acquisition of plant and equipment from a related entity under an Asset Sale and Purchase Agreement – whether any consideration (whether monetary or non-monetary) was provided

Rod Mathieson Truck Hire Pty Ltd as trustee for the Mathieson Family Trust and Commissioner of Taxation [2013] AATA 496 – the taxpayer was liable for GST on the entire amount of consideration payable for the sale of land, notwithstanding that part of the consideration was lent to the purchaser under a vendor finance arrangement and the loan was only partially repaid (Case analysis)

TT-Line Company Pty Ltd v Commissioner of Taxation [2009] FCAFC 178 – the amount received by TT Line from the Commonwealth as reimbursement under a scheme was consideration received by TT line “in connection with” the supply of transport services to members of the public – the exemption in s 9-15(3)(c) did not apply as the appropriation was to provide a benefit to the passenger not the government entity (TT line)

The Electrical Goods Importer and Commissioner of Taxation [2009] AATA 854 – cash back rebate paid by Applicant (wholesaler) to consumer does not change the consideration for the taxable supply by the retailer to the consumer – concept of fiscal neutrality does not apply in Australia

AXA Asia Pacific Holdings Limited v Commissioner of Taxation [2008] FCA 1834 – at [91]: a supply is “for consideration”, so long as there is a payment, act or forbearance “in connection with” the acquisition. It suffices that there is a payment, act or forbearance furnished by the actual acquirer even though, by reason of the supply being an “acquisition supply”, the actual acquirer is a deemed supplier.

Commissioner of Taxation v Reliance Carpet Co Limited [2008] HCA 22 – deposit forfeited to vendor by defaulting purchaser is “consideration” for a supply by the vendor to the purchaser – at [28]: it is sufficient that one or more characteristics of the deposit forfeited to the vendor satisfies the criterion of “consideration” – at [33]: the payment of the deposit was “in connection with” a supply by the vendor as the payment of the deposit obliged the parties to enter into mutual legal relations which executory obligations and rights

Keenhilt Pty Ltd as trustee for the CHC Services Trust [2007] AATA 2095 – supply of tax minimisation and avoidance schemes by applicant was a taxable supply notwithstanding that applicant did not received payments – it was sufficient that the payments made were “in connection with” the supply – at [28]: the law does not require that the payment be made to the person supplying the service

TSC 2000 Pty Ltd and Commissioner of Taxation [2007] AATA 1629 – applicant received bets from members not as agent for members but as consideration for taxable supply – at [68] references in contractual documents to applicant acting as agent for members not detract from conclusion, the legal description to be applied to a contractual relationship is to be determined by reference to the terms of the relationship rather than the description applied by one of the parties

Food Supplier and Commissioner of Taxation [2007] AATA 1550 – the supply of “free” promotional items with coffee is not GST-free but a separate taxable supply – at [8]-[9]: the consideration was for the packaged product as a whole, including the promotion item, the purchaser made a payment “in connection with” the supply as a whole (s 9-15(1)(a), words such as “in connection with” have a wide meaning, alternatively payment is made “in response to or for the inducement” of the supply (s 9-15(1)(b)) – at [9]: the word “consideration” in taxing statutes is general “not to be read as requiring identification of the consideration sufficient to support a contract” (referring to Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3.

Ambiance (Arncliffe) Pty Ltd v The Commissioner of State Revenue [2002] NSWADT 206 – whether GST part of “consideration” for the purposes of stamp duty

International Cases

National Car Parks Limited v Revenue & Customs [2019] EWCA Civ 854 – Whether the excess over the tariff paid by person wishing to park at a “pay and display” car park is subject to VAT as consideration – appeal dismissed – Upper Tribunal – [2017] UKUT 247

Revenue and Customs v Tesco Freetime Ltd [2019] UKUT 18 –Points based loyalty programme – whether operator of programme receives services from third parties who provide rewards under the programme – whether payments third party consideration for provision of rewards – appeal dismissed

Virgin Media Ltd v Revenue & Customs [2018] UKFTT 556 – whether supplies of fixed line services were made on terms allowing a discount for prompt payment within para 4(1) – whether para 4(1) applies to reduce the consideration on which VAT is due where the discounted amount is not paid – appeal dismissed

Dixons Carphone Plc v Revenue & Customs [2018] UKFTT 557 – provision of credit facilities – whether consideration for supply of goods – no – whether reduction in payment amounted to a reduced consideration – no – appeal dismissed

Lunar Missions Ltd v Revenue and Customs [2018] UKFTT 7 – payment for services in advance – tax point – section 6(4) VATA 1994 – whether amounting to prepayment – schedule 10A VATA 1994 – whether for face value voucher – if so, whether single purpose voucher

National Car Parks Limited v Revenue and Customs [2017] UKUT 247 – car parking – whether overpayments consideration for taxable supply of services – link between consideration given and service received – whether sufficient link between consideration given and service received – whether overpayments subject to VAT – appeal dismissed – first instance – National Car Parks Limited v Revenue & Customs [2015] UKFTT 666

Shophold (Mauritius) Ltd v The Assessment Review Committee [2016] UKPC 12 – whether a taxable person, who has a contractual right to be paid for the services which it has provided, is obliged to pay Value Added Tax (“VAT”) even where it has waived the enforcement of its contractual right and has neither issued an invoice nor received payment for those services – meaning of “consideration”

Liverpool Muslim Society v Revenue & Customs [2014] UKFTT 1080 – charity – supplies of catering services – whether supplied in the course or furtherance of a business – provision of books and publications – whether supplied for a consideration – no – appeal dismissed

AV Concepts Ltd v Revenue & Customs [2013] UKFTT 646 – Whether goods were sold for a combination of cash and the value of part-exchange items, or whether the part-exchange items were in substance the equivalent of a discount so that the goods should be treated as sold for the cash consideration alone – Appeal dismissed

HMRC v Esporta Limited [2013] UKUT 173 – whether First-tier Tribunal erred in concluding that membership fees recovered after access to club’s facilities had been denied due to non-payment were not consideration for a supply but compensation – held yes – appeal allowed

Aberdeen Sports Village Ltd v Revenue & Customs [2012] UKFTT 80 – Whether payment was a consideration for a supply of services or donation; amount of consideration; link between payer and payee; appeal against decision that services were supplied; Appeal refused – For my analysis of the decision see here.

Groundwork Cheshire v Revenue & Customs [2012] UKFTT 750 – consideration for supply – Article 73 Principal VAT Directive – subsidies directly linked to the price of the supply – provision of free environmental consultancy services to businesses – funding from third party – whether payments amount to consideration – yes – appeal allowed

Hope in the Community v Revenue & Customs [2012] UKFTT 499 – supply – whether funds received by the Appellant were grant monies outside the scope of VAT or consideration for a taxable supply of goods and services within sections 4 and 5 VATA 1994 – held taxable supplies – appeal disallowed

Vehicle Control Services v HMRC [2012] UKUT 130b – supply of parking control services – whether parking charges collected and retained by operator were consideration for a supply – whether outside the scope of VAT as damages for trespass or damages for breach of a contract between the operator and the motorist – whether additional consideration payable by landowner for provision of parking control services – appeal dismissed

Barratt, Goff and Tomlinson and The Law Society as Intervenor v Revenue and Customs [2011] UKFTT 71 – disbursements – whether fees paid for medical records and medico-legal reports by solicitors acting for clients in personal injury and medical negligence claims disbursements and thus outside scope of VAT or are not disbursements and liable to VAT

Canotec Ltd v Revenue & Customs [2011] UKFTT 661 – Supply for a consideration – Payment made by equipment dealer to finance leasing company – Payment was consideration for termination of existing finance leasing agreement relating to old equipment – Payment made as part of deal by which customer under existing finance leasing agreement agrees to enter into new leasing agreement of upgraded agreement – Whether VAT charged on payment is input tax of equipment dealer

Findel plc v Revenue & Customs [2011] UKFTT 723 – consideration – whether donations to good causes by company making catalogue sales were part of consideration for its supplies

Next Group Plc v Revenue and Customs [2011] UKFTT 122 – sales brochures supplied for no immediate consideration — consideration payable if order placed, but offset by delivery charge credit — whether zero-rated brochure in reality supplied for no consideration — yes — consideration in truth paid for taxable supply of delivered goods — whether arrangements abusive — no

Bath Festival Trust Ltd v Revenue & Customs [2008] UKVAT V20840 – Whether payment to the Appellant by its local council was for a taxable supply of services for a consideration – Whether a grant – Arts Council grant also received by Appellant – Appeal allowed

Riverside Sports & Leisure Ltd v Revenue & Customs [2008] UKVAT V20848 – Value Added Tax – Barter transaction asserted to involve provision of services in return for lease – whether rights were retained by the counter-party school or whether they were the consideration for the lease – how to value the consideration for the services – points of principle to be followed in valuing the consideration – Appeal dismissed

Cross Border Lease Management Ltd v Revenue & Customs [2006] UKVAT V19853 – input tax — acquisition of car for letting on hire — customer providing substantial “security deposit” — deposit used as part payment for car — whether deposit truly a security deposit or part consideration for the hire — found to be a security deposit — appeal allowed

Church of England Children’s Society v Revenue and Customs [2005] EWHC 1692 – whether provision of newsletter to committed donors a supply made for consideration

Lex Service plc v Commissioners of Customs and Excise [2003] UKHL 67; [2004] STC 73; [2004] 1 WLR 1; [2004] 1 All ER 434 – non-monetary consideration, quantification – judgment appealed from – [2001] STC 1568

Public & Commercial Services Union v Customs and Excise [2003] EWHC 2845 – subscriptions my members, attribution of subscriptions to the supply of zero-rated magazine by organisation, whether market value or cost of magazines

Commissioners of Customs and Excise v Plantifor Limited [2002] UKHL 33; [2002] STC 1132; [2002] 1 WLR 2287 – whether VAT payable on postage for mail orders, whether postage cost is part of the consideration from customer to business

Commissioners of Customs and Excise v Ping (Europe) Ltd [2001] EWHC Ch 401 – VAT implications of surrender of “non-compliant” golf clubs to manufacturer in return for a payment and new, conforming, golf clubs, non-monetary consideration, value of surrendered clubs

Suzuki New Zealand Limited v The Commissioner of Inland Revenue [2001] NZCA 144 – GST on certain payments made by parent company re warranties on new motor vehicles, whether consideration for supply of repair services

Rulings and Determinations

GSTD 2013/1 ‘Goods and services tax: when a payment for a supply fails, is a failed payment fee charged by the supplier consideration for a supply?’

GSTD 2006/3 – Austlii – Goods and services tax: are settlement adjustments taken into account to determine the consideration for the supply or acquisition of real property?

GSTD 2005/4 – Austlii – Goods and services tax: are ‘wholesale holdback’ and ‘retail holdback’ payments made by a motor vehicle manufacturer or importer of new motor vehicles to a dealer consideration for a supply?

GSTD 2004/4 – Austlii – Goods and services tax: can consideration for a supply be provided or received without transferring money (such as where the parties only make book entries regarding their agreement that the supply is paid for)?

GSTR 2003/16 – Austlii – Goods and services tax: inducements to enter into a lease of commercial premises

GSTR 2003/12 – Austlii – Goods and services tax: when consideration is provided and received for various payment instruments and other methods of payment

GSTR 2003/11 – Austlii – Goods and services tax: payment on early termination of a lease of goods

GSTD 2003/1 – Austlii – Goods and services tax: is the payment of judgment interest consideration for a supply?

GSTD 2002/5 – Austlii – Goods and services tax: is a token of appreciation given to a speaker consideration for the supply of the speaking services?

9.17 Certain payments and other things not consideration

9.20 Enterprises

Cases

Chami and Commissioner of Taxation [2022] AATA 3797 – cancellation of ABN and GST registration – whether the application carried on an enterprise for GST and ABN purposes – where no corroborating independent material to support the applicant’s claim – where applicant claimed all corroborating material lost in flood – decision under review affirmed

San Remo Heights Pty Ltd and Commissioner of Taxation [2020] AATA 4023 where applicant subdivided a single parcel of land over an extended period – where applicant also carried on rental and grazing activities – whether sales of subdivided lots in the course or furtherance of an enterprise – where no evidence of purpose of applicant’s acquisition of the land – relevance of applicant being a company – decision affirmed

304 Wanda Street Pty Ltd and Commissioner of Taxation [2020] AATA 921 GST – input tax credit claim – creditable acquisition – corporate trustee –land acquisition – disallowance – administrative penalty – whether applicant was carrying on an enterprise – taxable supply – objection decision affirmed

Dobie and Commissioner of Taxation [2020] AATA 292 – whether the applicant entitled to to input tax credits with respect to a hairdressing enterprise – whether enterprise carried on – cancellation of enterprise

Skourmallas and Commissioner of Taxation [2019] AATA 5535 – input tax credits – creditable acquisitions – whether applicant carrying on business as a motor dealer – whether acquisition of a luxury motor vehicle in the course of an enterprise – whether of a private or domestic nature – whether applicant acquired the vehicle – Luxury Car Tax (LCT) – whether vehicle acquired and used only as trading stock – time for testing intention and use as trading stock – burden of proof discharged – decisions set aside.

Taxpayer 1 & Taxpayer 2 and Commissioner of Taxation [2015] AATA 737 – whether the Taxpayers were carrying on an enterprise – no business plan – input credits not substantiated – no enterprise – objection decisions under review affirmed

Bryxl Pty Ltd as Trustee for the Kypu Trust and Commissioner of Taxation [2015] AATA 89 – the taxpayer did not establish that it was carrying on an enterprise of land development and was entitled to input tax credits in respect of certain acquisitions – the taxpayer did not establish that it had purchased the land which was to be subdivided and sold

Guru 4U and Commissioner of Taxation [2014] AATA 740 – the Tribunal has found that the applicant was not carrying on an enterprise. The Tribunal found that the taxpayer had intended to start an enterprise but had not yet done so. Accordingly, the Commissioner was required to cancel its GST registration and it was not liable to pay GST and not entitled to input tax credits; at [70] there is an important distinction to be made between commencement and preparation for commencement of an enterprise; at [71]: the intention of a taxpayer is clearly a relevant consideration in determining whether a particular activity constitutes the carrying on of an enterprise

Giuseppe Caporale Structural Engineers Pty Ltd and Commissioner of Taxation [2014] AATA 507 – enterprise – carrying on an enterprise – input tax credits – creditable acquisitions – attribution of input tax credits – tax invoices – unreliable business activity statements

Davsa Forty-Ninth Pty Ltd as Trustee for the Krongold Ford Business Unit Trust and Commissioner of Taxation [2014] AATA 337 – GST whether an enterprise carried on – whether motor vehicles acquired in carrying on enterprise – whether tax invoices held, whether consideration paid for acquisitions – whether input tax credits allowable in respect of new and second hand motor vehicles acquired

The Married Couple and Commissioner of Taxation [2013] AATA 888 – the applicant failed to establish that it was carrying on a business of growing olive trees and producing olives and olive oil where it had purchased land, constructed a residence on the land and cleared some of the land – at [61]: the activities of the applicant were essentially preparatory in nature and lacked commercial character.

Professional Admin Service Centres Pty Ltd v Commissioner of Taxation [2013] FCA 1123 – at [39]: Australian income tax law jurisprudence emphasises the existence of a profit-making purpose, repetition and regularity, the conduct of activities using business-like methods, the volume of activity and the existence of a significant commercial purpose as relevant indicia to a finding that the activity or activities constitute a business. But para (b) of s 9-20(1) makes it clear that an “enterprise” can include an isolated commercial venture in the nature of trade, which implies that it be entered into for a commercial purpose, including the purpose of profit-making.

Naidoo and Commissioner of Taxation [2013] AATA 443 – the applicant failed to establish that it was carrying on a business of providing management and support services for the hospitality industry – (Case analysis)

Clayton and Commissioner of Taxation [2013] AATA 428 – the applicant failed to establish that it was carrying on a business of eco-tourism when it acquired land – at [18]: While there were some features of a business present during the period under review, the activities are better described as preparatory and exploratory in nature. – (Case analysis)

The Private Tutor and Commissioner of Taxation [2013] AATA 136 – the applicant establish that it was carrying on an enterprise of private tuition – (Case analysis)

Bayconnection Property Developments Pty Ltd v Commissioner of Taxation [2013] FCA 440 – the applicant failed to establish that it was carrying on an enterprise – tribunal – [2013] AATA 40 – at [72]: It is clear, based on the definition of “enterprise”, in particular in s 9-20(1)(a) of the GST Act, that one activity done in the form of a business can be an enterprise. But the first four applicants have failed to demonstrate that they did anything during the relevant period.

Wynnum Holdings No 1 Pty Ltd and Commissioner of Taxation [2012] AATA 616 – applicant described as “nominee and bare trustee” on behalf of joint venturers was not carrying on enterprise of retirement village – applicant failed to establish that applicant acting other than as bare trustee so enterprise carried on by joint venturers (case analysis)

Educational Pty Ltd and Commissioner of Taxation [2011] AATA 445 – applicant failed to establish that carrying on an enterprise when purchased 63 acres with intention to convert the property into an educational and accommodation centre

SXGX and Commissioner of Taxation [2011] AATA 110 – the sale of land by the applicant to the Qld government where the land was within an area identified for compulsory acquisition was a supply – at [29]: the supply was made in the course of the applicant’s enterprise as a used car dealer because the land was acquired for future development of the used car yard – the sale was in the course of conducting its enterprise

Russell v Commissioner of Taxation [2011] FCAFC 10 – applicant failed to establish that during the relevant period he carried on enterprise of accountant but established that he was carrying on an enterprise of a naturist retreat – the Court disagreed with the primary judge that there was not yet a business of a naturist retreat being carried on, only the undertaking of steps which were precursors to the commencement of such a business – at [87]: in determining whether the entity was “carrying on” an enterprise at the relevant time, intention or purpose of the acquisition is relevant but not determinative – at [100]: the taxpayer’s purpose in making certain expenditures was the establishment and conduct of the naturist retreat and he had therefore commenced his enterprise – first instance Russell v FC of T [2009] FCA 1224

Commissioner of Taxation v Swansea Services Pty Ltd [2009] FCA 402 – entity acquiring a collection of artwork and antiques found by Tribunal to be carrying on an enterprise – finding upheld on appeal – at [63]: there is nothing in the legislation that indicates that investment activities would not amount to the carrying on of an enterprise and the relatively low turnover threshold is consistent with eligibility being available even when sales at any given period have been minimal – at [64]: one activity alone may qualify as an enterprise – at [67]: it cannot be discerned from the legislation or from the Explanatory Memoranda that Parliament’s intention was that such ‘capital’ activities would not amount to the carrying on of an enterprise notwithstanding that such activities may not ordinarily amount to the ‘carrying on of a business’ or the ‘undertaking of a profit making scheme’ – at [68]: the GST Act definitions of ‘enterprise’ and ‘carrying on an enterprise’ appear on their face (consistently with the Explanatory Memoranda) to be substantially broader than the notion of ‘carrying on a business’ for the purposes of income tax regulation – at [74]: there are cases where subjectively expressed purpose may be relevant evidence to consider in the ultimate objective test of whether an enterprise is carried on – at [99]: the words “in the form of” have the effect of extending the reach of ‘enterprise’ to those activities which are in the form of a business but would not, in the ordinary meaning of ‘business’ be considered such. But the activity must still be reasonably intended to be profit making in the case of an individual and cannot for any entity simply be a private recreational pursuit or hobby

Rendyl Properties Pty Limited and Commissioner of Taxation [2009] AATA 177 – importer of a boat was not carrying on an enterprise – at [35]: an intention “to make a profit” is not the same as “to make money” and it is not enough to expect to be able to generate revenue – at [39]: the Tribunal’s general impression was that the boat’s revenue-generating opportunities were thought of more as a means of defraying some of the costs of ownership and operation of the boat than as essential elements of establishing a viable, profit-making business

Touram Pty Ltd ATF the GKA Family Trust and Commissioner of Taxation [2008] AATA 1167 – purchase of vacant land by entity was a taxable supply as it was made in the course of an enterprise carried on by the vendors – Tribunal satisfied that the vendors acquired and held the land in a business-like way

Goldberg and Anor and Commissioner of Taxation [2008] AATA 1045 – applicant involved in a book publishing initiative was not carrying on an enterprise – at [35]: the activity carried out was in the nature of an isolated venture of particular interest to the individuals involved and with no plan in place to show how a profit could be made

D’Arcy and Commissioner of Taxation [2008] AATA 709 – applicant involved in the breeding of horses not carrying on an enterprise – at [26]: the Tribunal was unable to distinguish his activities from those of a person who, with a keen interest in horses and their breeding, chooses to become a part-owner of broodmares for the purpose of pleasure or recreation, or as a hobby

Drysdale and Commissioner of Taxation [2008] AATA 393 – acquisition of a yacht by the applicant not an enterprise but done for a private recreational pursuit or hobby or without a reasonable expectation of profit or gain – at [13]: the words “your enterprise” confine eligibility for input tax credits to acquisitions made for an enterprise of the applicant

Peerless Marine Pty Ltd and Commissioner of Taxation [2006] AATA 765 – applicant carrying on a business (and an enterprise) in connection with a powered catamaran – at [69]-[71]: consideration of legal principles – enterprise carried on notwithstanding that it was “spectacularly unsuccessful” and produced only modest receipts – not of a private or domestic nature

Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2006] NSWSC 83 – at [65]-[77]: the sale of land vested in a trustee pursuant to the order of a Court was made in furtherance of an enterprise carried on by the trustee – the trustee carried on an enterprise, being a series of activities done in the course of a business (being a series of activities required to be undertaken pursuant to their appointment as trustees for sale) – the words “in the form of a business” extends the meaning of enterprise beyond entities carrying on a business to encompass activities that have the appearance or characteristics of business activities – one activity done in the form of a business can be an enterprise

Body Corporate, Villa Edgewater and Commissioner of Taxation [2004] AATA 425 – GST payable in respect of contributions by members to body corporate – body corporate a separate entity carrying on an enterprise

International cases

Vaughan v Revenue & Customs [2018] UKFTT 776 – registration – whether plastering and floor screeding activities constituted a single business or two separate businesses, one carried on by the Appellant as sole trader, and the other carried on by the Appellant and his wife in partnership

Belcher v Revenue and Customs [2017] UKFTT 427 – whether appellants carried on one business or two separate businesses independently – held on facts carried on two separately businesses

Smith v Commissioner of Inland Revenue [2016] NZTRA 9 – whether the taxpayer had commenced the activity of vineyard and farming – whether attempts of taxpayer to purchase land and machinery (which did not proceed) were properly described as a business activity or preparatory steps towards a business activity

Living Friends Tree Farm v The Queen 2016 TCC 116 – whether the taxpayer was carrying on a “commercial activity” of the farming of Christmas trees – whether the work undertaken, in respect to the preparation of the property with roads, fencing, wells, and construction of barn and greenhouse, was preparatory and that this type of agricultural activity meant that profit would not be immediate but would be expected at some point in the future when the trees matured – at [22]: the eligibility of expenses that give rise to ITCs in the start-up phase of any business will require that a taxpayer show not only a clear intention to commence a commercial enterprise but also evidence of the steps taken in support of that stated intention

Trustees of the B Trust v Commissioner of Inland Revenue [2013] NZTRA 5 – whether taxpayer carrying on a taxable activity in respect of the purchase, development and sale of homes which were used as principal place of residence for short periods of time.

X and the Commissioner of Inland Revenue [2012] NZTRA 07 – whether taxpayer entitled to be registered for GST and claim input credits as a property developer – whether carrying on a “taxable activity” – case analysis.

Land and Sea Enterprises Ltd v The Queen 2011 TCC 101 – whether taxpayer carrying on a commercial activity of horse breeding and training and entitled to input tax credits for acquisitions during the start up phase of that activity – at [14]: It is clear that an activity may be considered a commercial activity well in advance of the stage of profitability. It will always be a question of fact. Expenditures giving rise to ITCs in the start-up phase of a commercial activity may be eligible provided that there is clear intention to commence a business and that measurably significant and fundamental steps and actions have been put into place.

Rulings and Determinations

MT 2006/1 – Austlii – The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number

GSTD 2006/6 – Austlii – Goods and services tax: does MT 2006/1 have equal application to the meaning of ‘entity’ and ‘enterprise’ for the purposes of the A New Tax System (Goods and Services Tax) Act 1999?

9.25 Supplies connected with the indirect tax zone

Cases

Clothing Importer and Commissioner of Taxation [2011] AATA 281 – supplies of goods by an overseas entity to Australian customers on a “delivered duty basis” were connected with Australia

Saga Holidays Limited v Commissioner of Taxation [2006] FCAFC 191 – supply to overseas tourists of travel to Australia including accommodation was “connected with Australia” because the supply included “real property” as defined in s 195-1 – at [36]: the definition of “real property” is not confined to interests that would warrant that description under the general law, and extends beyond proprietary interests and includes interests that are purely contractual as well as personal interests that may or may not have arisen under contract – at [67]: by means of the concept of ‘supply’ and the extended definition of ‘real property’, s 9-25(4) seeks to catch any supply of contractual rights where the exercise of those rights will have a real, rather than exiguous, remote or insignificant, connection with land in Australia.

International

Essential Telecom Ltd v Revenue and Customs [2016] UKFTT 475 – Place of supply – whether airtime sold to person with establishment in Italy – yes – appeal allowed

ID Tours New Zealand Limited v Commissioner of Inland Revenue [2015] NZHC 483 – whether supplies of advisory services to cruise lines, incentive houses and overseas travel agents is zero rated – appeal of decision in Disputant and Commissioner of Inland Revenue [2014] NZTRA 13 – appeal dismissed

American Express Services Europe Ltd v Revenue & Customs [2008] UKVAT V20744 -PLACE OF SUPPLY – UK company performing services for US parent – Services relating to real estate – Continuous supplies – Whether composite or separate – Management – Advice – Reporting – Found indivisible on facts – No dominant element directly connected to specific property – Under Art 9.1 place of supply UK – Appeal dismissed

Daunter v Revenue & Customs [2007] UKVAT V20120 – VAT – ZERO-RATING – international services – place of supply – whether supplies of services of UK solicitors relating to court case in UK to be treated as made in UK or Jersey – held place of supplies was UK – whether supplies of services related to land – yes – supplies held to be correctly standard-rated – appeal dismissed

Burrows v Revenue & Customs [2007] UKVAT V20454 – PLACE OF SUPPLY – the Appellant supplied acting services for the production of a film, Perfect Creature in New Zealand – the Appellant’s acting services related to artistic, cultural and entertainment activities – no requirement that the supplies had to be made before a live audience – the Appellant’s supplies were physically carried out in New Zealand – the application of the words of article 9(2)(c) to the facts produced a construction that the place of supply was New Zealand – this construction met the purposes of article 9(2) and 9(2)(c) – satisfied the requirements of legal certainty, produced a rational solution, avoided distortion of competition and supplied no incentive for the Appellant to move her place of business – the place of supply of Appellant’s supply of acting services was New Zealand – Appeal allowed

Rulings and Determinations

GSTR 2017/D1 – Goods and services tax: supplies of goods connected with the indirect tax zone

GSTR 201/D2 – Goods and services tax: supplies of real property connected with the indirect tax zone

GSTR 2017/1 – Goods and services tax: making cross-border supplies to Australian consumers

GSTR 2000/31 – Austlii – Goods and services tax: supplies connected with Australia

9.26 Supplies by non-residents that are not connected with the indirect tax zone

9.27 When enterprises are carried on in the indirect tax zone

Rulings and Determinations

Law Companion Guideline LCG 2016/1 – GST and carrying on an enterprise in the indirect tax zone

9.30 Supplies that are GST-free or input taxed

9.39 Special rules relating to taxable supplies

Subdivision 9-B – Who is liable for GST on taxable supplies

9.40 Liability for GST on taxable supplies

Cases

Yacoub v Commissioner of Taxation [2012] FCA 678 – whether applicant liable for GST as a partner in partnership or only partly liable as a joint venture – case analysis

Climo and Commissioner of Taxation [2012] AATA 350 – applicant failed to establish that not liable for GST because the activities were done as an agent or employee

International cases

Bath Taxis (UK) Ltd v Revenue & Customs [2009] UKVAT V 20974 – VAT – ASSESSMENT – Was the Appellant supplying taxi services to account customers as agent or principal? – Appellant had pre-existing business relationship with account customers and bore the risk of bad debts – Appellant acted as a principal – Appeal dismissed

Starline and Wessex Taxis Ltd v Revenue & Customs [2007] UKVAT V20294 – Who makes a supply – principal and agent – taxi drivers driving Appellant’s taxis – fees received from rank journeys, telephone bookings through the Appellant, and from the Appellant’s account customers – who performed the service – what consideration was received for it – what was VATable

9.69 Special rules relating to liability for GST on taxable supplies

Subdivision 9-C – How much GST is payable on taxable supplies

9-70 The amount of GST on taxable supplies

9-75 The value of taxable supplies

Cases

International cases

Invesco Canada Ltd v The Queen 2015 TCC 375 – determination of the value of consideration paid by various mutual fund trusts to the taxpayer for the supply of management services to the funds – whether certain management fee reductions to large investors were part of the consideration

N & M Walkingshaw Ltd v Revenue and Customs [2015] UKUT 123 – sale of motor car on part-exchange terms – price of part-exchange car includes ‘over-allowance’ – value of supply of replacement car – periods prior to 1 August 1992 – application of ‘open market value’ – whether such value of replacement car should reflect a discount on a cash sale equivalent to the amount of the over-allowance – no

Invesco Canada Ltd v The Queen 2014 TCC 375 – determination of the value of consideration paid by various mutual fund trusts to the taxpayer for the supply of management services to the funds – whether certain management fee reductions to large investors were part of the consideration

GF Partnership v The Queen 2013 TCC 53 – whether builder and developer of residential subdivisions liable to GST on consideration including development charges – or whether development charges payable directly by purchaser and therefore not included in the price

Rulings and Determinations

GSTR 2001/6 – Austlii – Goods and services tax: non-monetary consideration

9-80 The value of taxable supplies that are partly GST-free or input taxed

Cases

Commissioner of Taxation v Luxottica Retail Australia Pty Ltd [2011] FCAFC 20 – at [16]: s s 9-80 recognises that a single supply may be comprised of components that are classified differently for GST purposes; the sale of spectacles is just such a case. For that distinction to be meaningful the amount of GST payable in respect of that supply (actual supply) must reflect the proportion that the taxable component bears to the whole of the supply – at [26] the formula in s 9-80(2) cannot be made to work and it is “impenetrably circular” (Case Analysis) – first Instance [2010] AATA 22

Food Supplier and Commissioner of Taxation [2007] AATA 1550 – at [21]-[23]: s 9-80 has not function in determining whether GST is payable, but can only arise where the supply of products is liable to GST under other parts of the Act, s 9-80 provides the means by which the necessary calculation of GST must be made – s 9-80 requires an apportionment, that the section may be difficult to apply is not a reason for declining the task of apportionment or treating the supply as not falling within its terms

International cases

DCM (Optical Holdings) Ltd v Revenue and Customs [2018] UKUT 409 – apportionment of optician’s income between exempt dispensing income and standard rated sales of spectacles – first instance – Meiji and Co Ltd v Revenue and Customs [2017] UKFTT 573

McBurney, Clelland & Boyd Ltd v Revenue & Customs [2008] UKVAT V20701 – Value Added Tax – opticians supplying spectacles and contact lenses – apportionment of sales consideration between exempt and taxable elements – assessment of opticians’ and staff time in exempt dispensing and taxable operations – basis of calculation by Respondents for apportionment considered reasonable and to best judgment – VATA 1994 Section 19(4) – Appeal dismissed.

Rulings and Determinations

GSTR 2001/8 – Austlii – Goods and services tax: apportioning the consideration for a supply that includes taxable and non-taxable parts

9-85 Value of taxable supplies to be expressed in Australian currency

Rulings and Determinations

GSTR 2001/2 – Austlii – Goods and services tax: foreign exchange conversions

9-90 Rounding of amounts of GST

9-99 Special rules relating to the amount of GST on taxable supplies