18 Sep 1212 Decision Impact Statement - Confidential
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  FCA 1309 applies to confer entitlement to input tax credits for second-hand goods are clearly articulated.