Central Equity Limited v Commissioner of Taxation

Central Equity Limited (CEL) has brought this case against the Commissioner of Taxation (the Commissioner) concerning the application of the Goods and Services Tax (GST) to the sale of real property executed prior to 1 July 2000 but settled after that date. The dispute revolves around whether the sale of residential strata-titled units in the Metro and Capri developments, both located in South Melbourne, Victoria, were subject to GST. The case was heard in the Administrative Appeals Tribunal (AAT).

The central legal issue in this case was whether the sales of the Metro and Capri properties were taxable supplies under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act). Specifically, the court had to determine whether the property was "made available" to the purchasers prior to 1 July 2000, and thus exempt from GST under s 6(3) and s 7(1) of the GST Act. The court had to interpret these sections to ascertain the point at which the property was considered "made available" to the purchasers. This involved examining the contracts of sale, the timing of the registration of the plans of subdivision, and the settlement of the purchase price.

The Tribunal concluded that the sales of the Metro and Capri properties were not taxable supplies under the GST Act because the property was not "made available" to the purchasers prior to 1 July 2000. The Tribunal found that the property was not "made available" until the registration of the plans of subdivision and the issuance of new certificates of title, which occurred after 1 July 2000. As such, the sales were exempt from GST. The Tribunal's reasoning was based on the legislative framework and the specific facts of each sale, including the timing of the execution of the contracts and the completion of the necessary legal and construction steps.

As a result of this decision, CEL is not liable for the GST payable on the sales of the Metro and Capri properties. The Tribunal's decision provides clarity on the application of the GST Act to sales of real property where the contract is executed prior to 1 July 2000 but settlement occurs after that date. The Tribunal's findings and reasoning will be useful for parties involved in similar disputes regarding the application of GST to property sales.