Sunlea Enterprises Pty Ltd As Trustee for Drummond Cove Unit Trust and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal (Tribunal) considered a dispute between Sunlea Enterprises Pty Ltd as Trustee for Drummond Cove Unit Trust (the Applicant) and the Commissioner of Taxation (the Respondent). The Applicant sought to claim input tax credits totalling $2,819,580.98 in its business activity statement for the tax period 1 October 2012 to 31 December 2012. The Commissioner disallowed these credits, leading to an amended assessment, which the Applicant objected to. The Commissioner disallowed the objection, and the Applicant applied to the Tribunal for a review of this decision.

The central legal issue before the Tribunal was whether the Applicant was entitled to claim the input tax credits, which hinged on whether the Applicant had made creditable acquisitions pursuant to section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (GST Act) in respect of certain invoices. These invoices related to project management costs incurred in a joint venture for the subdivision and sale of land. The Applicant contended that these invoices represented payments for unrecouped project costs and were evidence of taxable supplies made to the Applicant.

The Tribunal's reasoning focused on the Applicant's entitlement to claim input tax credits for creditable acquisitions. The Applicant bore the burden of proving that the acquisitions were creditable. The Tribunal noted that the Applicant did not produce the document by which the Drummond Cove Unit Trust was created, nor was evidence led as to its terms. Furthermore, investigations into the records of Sandpiper Asset Pty Ltd, the appointed project manager, provided no reference to the invoices in question or any loan details between the Drummond Cove Unit Trust and Sandpiper. The Tribunal ultimately affirmed the Commissioner's reviewable decision.