LI (Migration)

This matter concerned an appeal by Ms Li and other applicants against the refusal of their Business Skills (Residence) (Class DF) visas, specifically Subclass 890 (Business Owner). The primary dispute revolved around whether Ms Li's main business in Australia had achieved the required annual turnover of at least $300,000 in the 12 months preceding her visa application. The Administrative Appeals Tribunal (AAT) was tasked with determining the validity of this refusal.

The legal issues before the Tribunal were whether Ms Li had met the turnover requirement stipulated by clause 890.213 of Schedule 2 to the Migration Regulations 1994, and consequently, whether the visa refusal was justified. This involved scrutinising the evidence presented regarding the company's financial performance, particularly the distinction between sales reported on a cash basis in Business Activity Statements (BAS) and sales reported on an accruals basis in financial statements and tax returns. The Tribunal also implicitly considered the definition of a "qualifying business" under regulation 1.03, which requires the enterprise to be operated for profit and not primarily for speculative or passive investment.

The Tribunal considered evidence including a financial report prepared on an accruals basis showing sales of $321,622.25, of which $241,100 were from trade debtors, and BAS lodged with the Department confirming sales of $201,622. Despite the delegate's request for details of aged debtors, which were not provided, the Tribunal received the company's tax return for the relevant period, which also reported income from sales of $321,621. A letter from an accountant confirmed that the company's BAS were prepared on a cash basis, while its financial statements were on an accruals basis, a practice deemed consistent with the company's manufacturing nature and compliant with accounting and taxation requirements. The accountant opined that the total sales recorded in the financial statement, which was assessed for the company's annual tax return lodged with the ATO, should be considered the business turnover.

Ultimately, the Tribunal affirmed the decision not to grant the Business Skills (Residence) (Class DF) visas to the first, third, fourth, and fifth named applicants. The Tribunal noted it lacked jurisdiction to review the decision concerning the second named applicant.