25 Jun 12 GST refund refused - MTAA Superannuation Fund
The Full Federal Court (Gilmour, Perram and Jagot JJ) has dismissed the taxpayer's appeal from the decision of the AAT in MTAA Superannuation Fund (R G Casey) Building Property Pty Ltd v FCT  AATA 769.
The AAT has held that the taxpayer was not entitled, pursuant to s 13 of the A New Tax System (Goods and Services Tax Transition) Act 1999, to a refund of GST (totalling $7,457,531.10) paid as part of the rent of a building under a lease agreement entered into in 1998, that is, prior to the date of Royal Assent to the A New Tax System (Goods and Services Tax) Act 1999.
The AAT so held because the taxpayer and the lessee (a Commonwealth Government Department) had agreed that, after 1 March 2001, the rental payable by the taxpayer would be different from that identified in the lease agreement. Specifically, the AAT held that the taxpayer and the lessee departed from the consideration specified in the pre-Royal Assent lease by agreeing that the lessee would pay an additional 10% on account of GST, outside the rent review process. On this basis, the consideration for supplies after 1 March 2001 was not "identified or capable of being worked out" by the pre-Royal Assent date agreement, as required by s 13.
The Full Federal Court agreed, saying at para 53:
"Section 13 does not afford protection to suppliers who make supplies after the royal assent for a consideration which is not specified, or worked out pursuant to an agreement entered into before the date of royal assent. As the Tribunal noted, [the taxpayer and the lessee] departed from the consideration specified in the pre-royal assent Lease by agreeing that [the lessee] would pay an additional 10% on account of GST."
The Full Federal Court concluded, at para 59:
"...the Tribunal did not err in not finding that the rent review procedure in the Lease provided 'a way of working out the consideration' payable for supplies made after the review date. So understood, s 13 did not apply to the relevant supplies."
MTAA Superannuation Fund (R G Casey) Building Property Pty Ltd v FCT  FCAFC 89 (Full Federal Court; Gilmour, Perram and Jagot JJ; 20 June 2012).