Unit Trend Services Pty Ltd v Commissioner of Taxation

Unit Trend Services Pty Ltd v Commissioner of Taxation was a case in which the court considered the application of the margin scheme under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) to the supply of units in a property development. The primary dispute centred around whether the consideration for the acquisition of the relevant interest under the margin scheme was the price paid by Blesford and Mooreville to Simnat or the price paid by Simnat to Blesford and Mooreville. The dispute also involved the applicability of the anti-avoidance measures under Division 165 of the GST Act and the notion of "attributable to" in the context of the GST Act.

The court had to determine several legal issues. Firstly, it had to decide whether the consideration for the acquisition of the relevant interest under the margin scheme was the price paid by Blesford and Mooreville to Simnat or the price paid by Simnat to Blesford and Mooreville. Secondly, it had to consider whether the anti-avoidance measures under Division 165 of the GST Act applied to the scheme. Thirdly, it had to interpret the notion of "attributable to" in the context of the GST Act, particularly whether the GST benefit was attributable to the choices made by the entities or to the scheme itself.

The court reasoned that the consideration for the acquisition of the relevant interest under the margin scheme should be the proportionate amount of the sale price between Simnat and Blesford and between Simnat and Mooreville. The court rejected the Commissioner's argument that the phrase "the consideration for your acquisition of the interest... in question" should be understood as importing a group single entity rule. The court found that the margin scheme was correctly applied for the supplies made up to 16 March 2005, and the appropriate consideration was a proportionate amount of the sale price between Simnat and Blesford and between Simnat and Mooreville.

The court also held that the anti-avoidance measures under Division 165 of the GST Act did not apply to the scheme, and the notion of "attributable to" did not render the scheme invalid. The court concluded that the choices embodied in the scheme giving rise to a GST benefit were not attributable to the entities making those choices, but rather to the scheme itself.

The final orders required the parties to propose draft orders for the disposition of the appeal and cross-appeal within seven days, and to make and file written submissions as to costs within a further fourteen days. The court directed the parties to follow the procedures outlined in Rule 39.32 of the Federal Court Rules 2011 for the entry of orders.