Qantas Airways Limited v Chief Commissioner of State Revenue

The case of Qantas Airways Limited v Chief Commissioner of State Revenue concerned a dispute over the exemption from payroll tax for employer superannuation contributions made in respect of services performed by an employee before 1 July 1996, under the Payroll Tax Act 2007 (NSW) Schedule 6, clause 4(1) and the Pay-Roll Tax Act 1971 (NSW) s 3AA(6A). The legal issues before the court included whether contributions to a defined benefits scheme could be apportioned by reference to pre and post 1 July 1996 services, the correctness of the decision in CSR Ltd v Chief Commissioner of State Revenue [2006] NSWSC 1380, and whether the taxpayer had met the record-keeping requirements where calculations of payments were not recorded contemporaneously with the payments.

The court considered the nature of the contributions, which were paid while the fund was in surplus and not used to reduce the size of contributions. The contributions were paid at a higher "normal cost" level rather than an "adjusted normal cost" level. The court held that the decision in CSR Ltd v Chief Commissioner of State Revenue was correctly decided, that top-up contributions could be apportioned even if the fund was not in deficit as at 30 June 1996, and that the taxpayer was entitled to refunds in respect of these contributions and amounts paid in excess of the adjusted normal cost level. However, the taxpayer did not prove that any part of the adjusted normal cost level contributions could be apportioned because a simple ratio of pre and post 1 July 1996 services could not be applied to these contributions. The court allowed the appeal in part and remitted the matter to the Chief Commissioner for further consideration.

In conclusion, the court allowed the appeal in part, finding that the taxpayer was entitled to refunds for certain contributions but did not establish that any part of the adjusted normal cost level contributions could be apportioned. The matter was remitted to the Chief Commissioner for further consideration in light of the court's findings.