Adcon Resources Vic Pty Ltd and Commissioner of Taxation (Taxation)

This matter concerned an application by Adcon Resources Vic Pty Ltd (the Applicant) for a review of the Commissioner of Taxation's decision to revoke its Goods and Services Tax (GST) group registration. The Applicant sought to form a GST group with Adcon Contracting Pty Ltd, proposing a start date of 1 July 2018. The Commissioner had registered the GST group from 1 July 2019, and the Applicant objected to this decision. The core of the dispute revolved around whether the two companies met the necessary ownership requirements to form a GST group.

The legal issues before the Tribunal were whether the Applicant and Adcon Contracting satisfied the ownership requirements stipulated in section 48-10(1)(b) of the *A New Tax System (Goods and Services Tax) Act 1999* (Cth) for forming a GST group, and if so, from what date. This required determining if the companies were part of the same 90% owned group, considering the legal and beneficial ownership of shares and the potential for nominee arrangements.

The Tribunal considered evidence regarding the shareholding of both companies. ASIC searches indicated that Danny Isaac was the sole legal and beneficial shareholder of the Applicant. For Adcon Contracting, Mr Isaac was the sole director, and Chale Pty Ltd was the legal shareholder, though Mr Isaac was the beneficial owner of Chale Pty Ltd during the relevant period. The Applicant argued that Mr Isaac held shares in the Applicant as a nominee for Chale Pty Ltd, which, as trustee for the Chale Asset Trust, controlled at least 90% of the voting power and dividend/capital distribution rights in both entities, either directly or through a nominee. However, the Tribunal found that the Applicant had failed to discharge its onus to prove that the Commissioner's decision was incorrect.

Consequently, the Tribunal concluded that the Applicant and Adcon Contracting did not meet the GST group membership requirements for the period of 1 July 2018 to 30 June 2021. As a result, they were not eligible to form a GST group during that period. The Tribunal affirmed the objection decisions, meaning the revocation of the GST group registration stood.