Cyonara Snowfox Pty Ltd v Commissioner of Taxation

In Cyonara Snowfox Pty Ltd v Commissioner of Taxation, the applicant, Cyonara Snowfox Pty Ltd, contested the Commissioner of Taxation's determination regarding the application of the margin scheme under the A New Tax System (Goods and Services Tax) Act 1999 (Cth). The dispute centered on whether the applicant could still elect to apply the margin scheme for certain property sales and whether one of the sales constituted a supply of a going concern. The case was adjudicated by the Administrative Appeals Tribunal (AAT) and subsequently appealed to the Federal Court of Australia.

The primary legal issues the court needed to address were the interpretation and application of sections 75-5 and 75-10 of the GST Act, specifically in the context of the applicant's right to make a choice under section 75-5 of the GST Act. The court was also required to determine whether the applicant had discharged the onus of demonstrating that a GST-free supply under subdivision 38-J of the GST Act had been made out. This involved examining whether the applicant's sale of Lot 8 constituted a "supply of a going concern" under section 38-325 of the GST Act.

The court concluded that the applicant's choice to apply the margin scheme had to be made no later than the time of supply, and since the applicant had not made the choice within the required timeframe, it was no longer possible for the applicant to apply the margin scheme to the sales of Lot 1 and Lot 9. Regarding the second issue, the court found that the applicant had not provided sufficient evidence to establish that the supply of Lot 8 was a supply of a going concern. The court noted that while the applicant argued that all criteria under section 38-325 were met, the evidence presented did not sufficiently support this claim, particularly given the lack of registration and insufficient documentation regarding the leases.

The court dismissed the applicant's appeal and denied the applicant's Notice of Motion. It ordered that the applicant pay the respondent's costs of and incidental to the appeal and the Notice of Motion. The court also dismissed the application and ordered the applicant to pay the respondent’s costs of and incidental to the application. These orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.