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18 Sep 12 Decision Impact Statement - Confidential

The ATO has published a Decision Impact Statement in relation to the AAT decisions in Confidential and FCT [2012] AATA 407 and [2012] AATA 408; 2012 ATC 1-046.

The decisions concerned whether an entitlement to input tax credits arose for second-hand aircraft acquired before 1 July 2000 which were then leased before being sold in 2009.

In particular, one of the questions for decision was whether in accordance with s 18(1)(a) of the A New Tax System (Goods and Services Tax Transition ) Act 1999 (GST Transition Act) the taxpayers held the aircraft on 1 July 2000 for the purposes of sale or exchange (but not manufacture) in the ordinary course of business;

The AAT held that the aircraft were not sold in the ordinary course of business. In the ordinary course of business, the aircraft were leased. Consequently, s 18(1)(a) of the GST Transition Act was not satisfied as the aircraft were not held on 1 July 2000 for the purposes of sale or exchange in the ordinary course of business:

The Decision Impact Statement states that the decisions are broadly consistent with the way in which the ATO applies the law. Consideration will be given to revising GSTR 2005/3, paragraphs 43 to 45F, to ensure that the circumstances in which the ATO considers the decision in LeasePlan Australia Limited v FCT [2009] FCA 1309 applies to confer entitlement to input tax credits for second-hand goods are clearly articulated.

 


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