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27 Feb 15 Enterprise not carried on for GST purposes – Re Bryxl Pty Ltd

The Administrative Appeals Tribunal has found that a taxpayer company which had obtained an ABN and had registered for GST, and purported to be carrying on a business of property development, was not, on the facts, carrying on an enterprise at the relevant times, and was not entitled to input tax credits which it had claimed. Further, the taxpayer was not entitled to GST registration, and it was appropriate that its ABN be cancelled.
The evidence regarding the taxpayer conducting a business or enterprise involving the subdivision and sale of land disclosed that while the taxpayer may have had the intention to carry out such a business or enterprise, the steps it undertook in obtaining a planning permit and a market valuation could not properly be described as being steps taken in the course of commencement of an enterprise. Until such time as it acquired the right to deal with the land in such a way that subdivision and sale could occur, it would be artificial to suggest it was conducting the enterprise involving the subdivision and sale of land. The steps taken were clearly precursors or preparatory to the possible commencement of business, whether that be subdivision of the land or a quick sale to a syndicate of buyers.
The Tribunal also affirmed the Commissioner’s decision to impose penalties, calculated on the basis of recklessness on the taxpayer’s part.
Re Bryxl Pty Ltd as Trustee for the Kypu Trust and FCT [2015] AATA 89 (AAT, Egon Fice SM, 19 February 2015).


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