Division 123 – Simplified accounting methods for retailers and small enterprise entities
123.1 What this Division is about
123.5 Commissioner may determine simplified accounting methods
123.7 Meaning of small enterprise entity
123.10 Choosing to apply a simplified accounting method
Division 126 – Gambling
126.1 What this Division is about
Cases
TAB Ltd v Commissioner of Taxation [2005] NSWSC 552 – at [53] per Gzell J – “there is a lot to be said for the view that…Div 126 forms an exclusive code for determining the margin with respect to the provision of gambling supplies” and at [61] “The better view, in my judgment, is that…Div 126 constitutes an exclusive code for the determination of net profits from gambling and the reference to the adjustments in s 126-5(2) is limited to adjustments with respect to activities other than gambling supplies.”
126.5 Global accounting system for gambling supplies
Cases
Commissioner of Taxation v Burswood Nominees Limited as trustee for the Burswood Property Trust [2021] FCAFC 151 – goods and services tax – gambling supplies – junkets – agreements between casino and junket tour operators – where commissions and rebates were payable by the casino to the junket tour operator or by the junket tour operator to the casino – where, at the conclusion of the junket, a total amount would be payable by the junket tour operator to the casino or by the casino to the junket tour operator – whether the commissions and rebates, or the total amount payable, were subject to the special rules for gambling supplies in Div 126
International All Sports v Commissioner of Taxation [2011] FCA 824 – the expression “total monetary prizes” refers to all monetary prizes the entity was liable to pay in the tax period – monetary prizes paid to gamblers outside Australia are not excluded
126.25 Application of Subdivision 9-C
126.27 When gambling supplies are connected with the indirect tax zone
126.30 Gambling supplies do not give rise to creditable acquisitions
126.32 Repayments of gambling losses are not consideration
126.33 Tax invoices not required for gambling supplies
126.35 Meaning of gambling supply and gambling event
Cases
TSC 2000 Pty Ltd and Commissioner of Taxation [2007] AATA 1629 – amounts paid by members of lottery scheme consideration for a taxable “gambling supply” by applicant – amounts paid as consideration to applicant and not received as agent for members – at [77]-[80]: discussion of meaning of “bet” and “lottery”
TAB Ltd v Commissioner of Taxation [2005] NSWSC 552 – whether the definition of “gambling event” requires an outcome and therefore does not apply if there is no outcome, e.g. because a race is abandoned or declared a no-race – whether bets placed on races, games, sporting events or other events where there was a refund constitutes consideration for a “gambling supply”
International Cases
Revenue and Customs v K E Entertainments Ltd [2020] UKSC 28 – Taxable amount – Taxpayer charging fee for participation in bingo sessions – Tax payer recalculating liability to tax in accordance with business brief and Notice published by HMRC – Taxpayer giving effect to recalculation by issuing an internal credit note – Taxpayer making retrospective claim for over payment of tax – whether recalculation resulted in a ‘decrease in consideration for a supply which includes an amount of VAT’ within the meaning of Regulation 38 – Appeal dismissed
Revenue and Customs v The Rank Group PLC [2020] UKUT 117 – exemption – betting and gaming – gambling supplies through fixed odds betting terminals and certain slot machines – whether other gambling supplies with different VAT treatment were similar – the EU principle of fiscal neutrality considered – whether FTT erred in applying that principle – appeals dismissed
Done Brothers (Cash Betting) Ltd & Ors v Revenue & Customs [2018] UKFTT 406 – betting and gaming – whether exclusion from exemption of supplies of gambling made through fixed odds betting terminals contrary to EU principle of fiscal neutrality- whether games played on FOBTs were similar to comparator games – appeals allowed
Rank Group v Revenue & Customs [2018] UKFTT 405 – betting and gaming – whether taxation of supplies of gambling made through certain slot machines when supplies throughfixed odds betting terminalswere exempt breach of EU principle of fiscal neutrality- whether other slot machines andfixed odds betting terminalswere similar – appeal allowed
Revenue and Customs v K E Entertainments Ltd [2017] UKUT 328 – Taxable amount – Taxpayer charging fee for participation in bingo sessions – Tax payer recalculating liability to tax in accordance with business brief and Notice published by HMRC – Taxpayer giving effect to recalculation by issuing an internal credit note – Taxpayer making retrospective claim for over payment of tax – whether recalculation resulted in a ‘decrease in consideration for a supply which includes an amount of VAT’ within the meaning of Regulation 38 – yes – – Appeal refused
Revenue and Customs v The Rank Group Plc [2015] UKSC 48 – whether the revenue from electronic slot machines used for gaming resulting from the provision of a “gaming machine” as defined and more particularly whether for the purposes of that definition the element of chance in the game was “provided by means of the machine” or by an outside agency of some kind – if not, the takings were exempt – the machines were terminals connected to a central network but the element of chance was provided “by means of” the action of the player pressing the button and generating the winning or losing combination – the terminal was therefore the active means by which the element of chance was created
Division 129 – Changes in extent of creditable purpose
129.1 What this Division is about
Subdivision 129A – General
129.5 Adjustments arising under this Division
129.15 Adjustments do not arise under this Division where there are adjustments under Division 130
Subdivision 129B – Adjustment periods
129.25 Effect on adjustment periods of things being disposed of etc
Subdivision 129C – When adjustments for acquisitions and importations arise
129.40 Working out whether you have an adjustment
Cases
A Taxpayer and Commissioner of Taxation [2011] AATA 160 – calculating an increasing adjustment in respect of a property development on the basis of effective life method was not fair and reasonable – at [27]: the Tribunal accepted that GST 2009/4 contains a cogent explanation as to why an apportionment method based on the effective life of the premises is not considered fair and reasonable
GXCX and Commissioner of Taxation [2009] AATA 569 – entity which owned property with concurrent intention of renting residential apartments in the short term and selling the apartments in the medium to long term did not hold the apartments for a “dual purpose”, being a creditable and a non-creditable purpose – during the period in question the apartments were not applied for the creditable purpose of selling merely because the holding company had an intention to sell at some time in the future. The application during this period was entirely for a non-creditable purpose – at [32]: there is nothing inconsistent or illogical about two different but contemporaneous purposes
International cases
Commissioner of Inland Revenue v Lundy Family Trust [2005] NZCA 269 – adjustments for change of purpose
Rulings and Determinations
GSTR 2009/4 – Austlii – Goods and services tax: new residential premises and adjustments for changes in extent of creditable purpose
GSTD 2009/2 – Austlii – Goods and services tax: are there GST consequences when a partner in a partnership takes goods held as trading stock for private or domestic use
GSTR 2006/4 – Austlii – Goods and services tax: determining the extent of creditable purpose for claiming input tax credits and for making adjustments for changes in creditable purpose
GSTR 2006/3 – Austlii – Goods and services tax: determining the extent of creditable purpose for providers of financial supplies
GSTR 2000/24 – Austlii – Goods and services tax: Division 129 – making adjustments for changes in extent of creditable purpose
129.45 Gifts to gift-deductible entities
Subdivision 129D – Amounts of adjustments for acquisitions and importations
129.70 The amount of an increasing adjustment
129.75 The amount of a decreasing adjustment
129.80 Effect of adjustment under certain Divisions.
Subdivision 129E – Attributing adjustments under this Division
129.90 Attributing your adjustments for changes in extent of creditable purpose
Division 130 – Goods applied solely to private or domestic use
130.1 What this Division is about
130.5 Goods applied solely to private or domestic use
Division 131 – Annual apportionment of creditable purpose
131.1 What this Division is about
Subdivision 131A – Electing to have annual apportionment
131.5 Eligibility to make an annual apportionment election
131.10 Making an annual apportionment election
131.15 Annual apportionment elections by representative members of GST groups
131.20 Duration of an annual apportionment election
Subdivision 131B – Consequences of electing to have annual apportionment
131.40 Input tax credits for acquisitions that are partly creditable
131.45 Input tax credits for importations that are partly creditable
131.55 Increasing adjustments relating to annually apportioned acquisitions and importations
131.60 Attributing adjustments under section 131.55
Division 132 – Supplies of things acquired etc
132.1 What this Division is about
Rulings and Determinations
GSTR 2004/8 – Austlii – Goods and services tax: when does an increasing adjustment under Division 132
132.10 Attribution of adjustments under this Division
Division 133 – Providing additional consideration under gross-up clauses
133.1 What this Division is about
133.5 Decreasing adjustments for payments made to third parties
133.10 Increasing adjustments for payments received by third parties
Division 134 – Third party payments
134.1 What this Division is about
134.5 Decreasing adjustments for payments made to third parties
134.10 Increasing adjustments for payments received by third parties
134.15 Attribution of decreasing adjustments
134.20 Third party adjustment notes
Legislative Determinations
TPANI 2010/1 – Third Party Adjustment Note Information Requirements Determination (No.1) 2010
134.25 Adjustment events do not arise
134.30 Application of sections 48-55 and 49-5
Division 135 – Supplies of going concerns
135.1 What this Division is about
135.5 Initial adjustments for supplies of going concerns
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 – the purchaser of the reversion has an increasing adjustment under Division 135 where the property was acquired as a going concern- appeal – [2013] FCAFC 112 (Case analysis) – first instance [2013] FCA 5 (Case analysis)
The Hotel Apartment Purchaser and Commissioner of Taxation [2013] AATA 567 – the purchaser of a residential apartment in a hotel complex as a going concern was subject to an increasing adjustment under s 135-5 because the apartment was to be used to make input taxed supplies of residential premises – (Case analysis)
135.10 Later adjustments for supplies of going concerns
Division 136 – Bad debts relating to transactions that are not taxable or creditable to the fullest extent
136.1 What this Division is about
Subdivision 136A – Bad debts relating to partly taxable or creditable transactions
136.5 Adjustments relating to partly taxable supplies
136.10 Adjustments in relation to partly creditable acquisitions
Subdivision 136B – Bad debts relating to transactions that are taxable or creditable at less than 1
136.30 Writing off bad debts (taxable supplies)
136.35 Recovering amounts previously written off (taxable supplies)
136.40 Bad debts written off (creditable acquisitions)
136.45 Recovering amounts previously written off (creditable acquisitions)
Division 137 – Stock on hand on becoming registered etc
137.1 What this Division is about
137.5 Adjustments for stock on hand on becoming registered etc
Division 138 – Cessation of registration
138.1 What this Division is about
138.5 Adjustments for cessation of registration
138.10 Attributing adjustments for cessation of registration
138.15 Ceasing to be registered – amounts not previously attributed
138.17 Situations to which this Division does not apply
138.20 Application of Division 129
Division 139 – Distributions from deceased estates
139.1 What this Division is about
139.5 Adjustments for distributions from deceased estates
139.10 Attributing adjustments for distributions from deceased estates
139.15 Application of Division 129
Division 141 – Tradex scheme goods
141.1 What this Division is about
141.5 Adjustments for applying goods contrary to the Tradex Scheme
141.10 Meaning of tradex goods etc
141.15 Attribution of adjustments under this Division
141.20 Application of Division 129
Division 142 – Excess GST
142.1 What this Division is about
Rulings and Determinations
Subdivision 142A – Excess GST unrelated to adjustments
142.5 When this Subdivision applies
142.10 Refunding the excess GST
Cases
M3K Services Pty Ltd and Commissioner of Taxation [2021] AATA 4416 – GOODS AND SERVICES TAX – whether refund of excess GST paid is denied by s 142-10 of the A New Tax System (Goods and Services Tax Act) 1999 – whether excess GST passed on – where supplier priced to the market, rather than on a cost-plus margin basis – held GST passed on – whether s 142-15 of the Act applied to treat s 142-10 as never having applied – held s 142-15 not applicable – reviewable decisions affirmed
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
142.15 When section 142-10 does not apply
142.16 No refund of excess GST relating to supplies treated as non-taxable importations
Subdivision 142B – GST related to cancelled supplies
142.20 Refunding GST relating to cancelled supplies
Subdivision 142C – Passed on GST
142.25 Working out if GST has been passed on
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
International Cases – Courts
Investment Trust Companies v Revenue and Customs [2013] EWHC 665 – whether ultimate consumers entitled to recover overpaid VAT from the revenue on they basis that they bore the economic burden of the overpaid VAT – continuation of earlier decision of the High Court in Investment Trust Companies v HM Revenue and Customs [2012] EWHC 458
Marks and Spencer plc v Customs and Excise [2009] UKHL 8; [2009] STC 452; [2009] 1 All ER 939 – food, whether teacakes were biscuits, claim for refund of VAT, limitation of refunds where claimant unjustly enriched, effect of passing on VAT to customers, retrospective legislation, effect of community law – judgment of House of Lords referring to ECJ – [2005] UKHL 53 – request for preliminary ruling by ECJ – [2006] UKHL 69 – judgment of European Court of Justice – [2008] EUECJ C-309/06; [2008] STC 1408
Fleming v Her Majesty’s Revenue and Customs [2008] UKHL 2 – refunds of VAT, effectiveness of legislation to limit refund claims
Monro v Revenue and Customs [2008] EWCA Civ 306; [2008] STC 1815; [2008] 3 WLR 734 – entitlement at common law to refund of VAT; whether claim inconsistent with statutory refund scheme
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