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The ATO has issued a Decision Impact Statement in relation to the AAT decision in GXCX and FCT [2009] AATA 569; 2009 ATC 1-012. The case concerned GST and adjustments arising in relation to changes in extent of creditable purpose and new residential premises.

The taxpayer argued that it held a "dual purpose" of renting and selling with regard to 22 rented apartments which remained unsold in a block of 91 new residential apartments. The AAT found the application of the acquisitions during the relevant period was entirely for a non-creditable purpose. Whilst Deputy President Hack accepted that the holding company held the intention to sell at some time in the future, he did not regard the holding of that intention, without more, as amounting to an application of the goods and services for a creditable purpose.

The ATO states that between the date of the objection decision and the hearing of the application by the AAT, the ATO revised its view with respect to the determination of adjustments for changes in extent of creditable purpose relating to new residential premises. In accordance with the revised view set out in GSTR 2009/4 the ATO now accepts that an acquisition can be applied to some extent for a creditable purpose, whilst concurrently being applied to some extent for a non-creditable purpose. The ATO also now accepts that the holding of something for the purpose of sale is an application of the thing for the purposes of Division 129 of the GST Act.

In GXCX, however, the ATO states that it was not necessary for the AAT to consider whether the position would have been different had attempts are made to sell a property contemporaneously with the rental of the property, as that was not the case in the matter (see GSTR 2009/4, paragraphs 48-57).

For a copy of the Decision Impact Statement, go here


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