Skourmallas and Commissioner of Taxation (Taxation)

This matter concerned an appeal by Mr Skourmallas against decisions of the Commissioner of Taxation regarding Goods and Services Tax (GST) input tax credits and Luxury Car Tax (LCT) decreasing adjustments. The primary dispute revolved around Mr Skourmallas's acquisition of an Audi R8, with the Commissioner disallowing claims for input tax credits and a decreasing adjustment on the basis that the vehicle was acquired for private or domestic purposes, rather than for use in an enterprise or as trading stock. The Administrative Appeals Tribunal was required to determine whether Mr Skourmallas was entitled to these claims.

The legal issues before the Tribunal were whether Mr Skourmallas acquired the Audi R8, whether he was carrying on an enterprise, and if the acquisition was in the course of that enterprise and not of a private or domestic nature, for the purpose of GST input tax credits. In relation to the LCT decreasing adjustment, the Tribunal had to determine if Mr Skourmallas was supplied with the Audi R8, if he intended to hold it solely as trading stock, and if he used it only for that purpose. The burden of proof rested on Mr Skourmallas to establish these entitlements.

The Tribunal found that Mr Skourmallas had discharged his burden of proof. It was persuaded on balance that Mr Skourmallas acquired the Audi R8 in the course of his enterprise and that the acquisition was not of a private or domestic nature, thus entitling him to the GST input tax credits. Similarly, for LCT purposes, the Tribunal concluded that the vehicle was supplied to Mr Skourmallas, that he intended to hold it as trading stock and for no other purpose, and that he used it only as trading stock. The Tribunal was satisfied that Mr Skourmallas held the requisite intention when he acquired the vehicle and maintained it when he lodged his return. Consequently, the decisions of the Commissioner were set aside.