Vidler and Commissioner of Taxation

Case [2009] AATA 395

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 395

ADMINISTRATIVE APPEALS TRIBUNAL      )

)           No 2008/1300; 2008/4628

TAXATION APPEALS DIVISION )
Re BRAITH VIDLER

Applicant

And

COMMISSIONER OF TAXATION

Respondent

DECISION

Tribunal Mr S E Frost, Member

Date1 June 2009  

PlaceSydney

Decision

In matter 2008/1300 the objection decision is affirmed. 

In matter 2008/4628 the objection decision:

·     is varied to the extent necessary to give effect to the Commissioner’s decision to waive the administrative penalty in respect of the shortfall amounts arising from the sale of the first and second properties; and

·     is otherwise affirmed.

...................[sgd]...........................

Mr S E Frost
  Member

CATCHWORDS

TAXATION – goods and services tax (GST) – sale of vacant residential land – whether input taxed – whether “residential premises” as defined – whether intended to be occupied, and capable of being occupied, as a residence or for residential accommodation – not residential premises – supply not input taxed – objection decision affirmed

TAXATION – goods and services tax (GST) – “consideration” for a supply – payment of a “compensation amount” – payment of that amount a fundamental condition of the sale contract – payment made “in connection with” a supply – objection decision affirmed

LEGISLATION

A New Tax System (Goods and Services Tax) Act 1999 – s 9-15, 40-65, 75-10, 195-1 – “residential premises”

A New Tax System (Indirect Tax and Consequential Amendments) Act 1999

Tax Laws Amendment (2006 Measures No 3) Act 2006

Acts Interpretation Act 1901 – s 22(1)(c) – “land”

CASES

Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307; (2004) 141 FCR 299; 57 ATR 521; 2004 ATC 5068

Urdd Gobaith Cymru v Commissioners of Customs and Excise [1997] V & D R 273

Denman College v Commissioners of Customs and Excise [1998] V & D R 399

Owen v Elliott(Inspector of Taxes) [1990] 1 Ch 786

South Steyne Hotel Pty Ltd v Commissioner of Taxation [2009] FCA 13; (2009) 71 ATR 228; 2009 ATC 20-090

Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355

Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384

Isherwood v Butler Pollnow Pty Ltd (1986) 6 NSWLR 363

Federal Commissioner of Taxation v Sidney Williams (Holdings) Ltd (1956) 100 CLR 95

DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (1982) 149 CLR 431; 12 ATR 874; 82 ATC 4125

Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 1) (1987) 16 FCR 465

Burswood Management Limited v Attorney General (1990) 23 FCR 144

HP Mercantile Pty Limited v Commissioner of Taxation (2005) 143 FCR 553

Berry v Federal Commissioner of Taxation (1953) 89 CLR 653

Claremont Petroleum NL v Cummings (1992) 110 ALR 239

Body Corporate, Villa Edgewater CTS 23092 v Federal Commissioner of Taxation 2004 ATC 2056

Hatfield v Health Insurance Commission (1987) 15 FCR 487

Commissioner of Taxation v Reliance Carpet Co…

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Details
AGLC
Vidler and Commissioner of Taxation [2009] AATA 395
Case
[2009] AATA 395
Decision Date

CaseChat Overview and Summary

Vidler and the Commissioner of Taxation were before the Administrative Appeals Tribunal (AAT) in a dispute concerning the application of goods and services tax (GST) on the sale of vacant residential land. The primary issue was whether the sale of the vacant land was subject to GST, specifically if the land qualified as "residential premises" under the law, and whether the compensation payments made were considered "consideration" for the supply. The Tribunal was tasked with determining the tax implications of these sales and the validity of the objection raised by Vidler against the Commissioner's decision.

The court examined the definition of "residential premises" under the GST law, which requires the land to be intended to be occupied, and capable of being occupied, as a residence or for residential accommodation. The Tribunal found that the vacant land in question did not meet these criteria as it was not intended or capable of being occupied for residential purposes at the time of sale. Consequently, the sale was not considered input taxed. Additionally, the court assessed whether the compensation payments made by Vidler were "consideration" for the supply, given they were a fundamental condition of the sale contract. The Tribunal concluded that these payments were indeed made "in connection with" the supply and were therefore considered as part of the "consideration".

The Tribunal affirmed the objection decision in both matters, with a specific variation in one matter to waive the administrative penalty for shortfall amounts due to the sale of the first and second properties. This decision underscores the importance of the intent and capability of the land to be occupied as residential premises in determining the applicability of GST on the sale of vacant land. The outcome reaffirms the Commissioner’s decision, providing clarity on the tax treatment of such sales and the nature of compensation payments in the context of GST.

Orders

Orders of the court

In matter 2008/1300 the objection decision is affirmed.

In matter 2008/4628 the objection decision:

· is varied to the extent necessary to give effect to the Commissioner’s decision to waive the administrative penalty in respect of the shortfall amounts arising from the sale of the first and second properties; and

· is otherwise affirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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