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05 Nov 13 Litigation funding was not an enterprise for GST purposes - Professional Admin Service Centres

The Federal Court has held that the taxpayer was not entitled to input tax credits in respect of its payment of invoices for the provision of legal services by certain entities in the defence of criminal proceedings brought against Michael Felson, formerly known as Nikytas Nicholas Petroulias, for conspiring to defraud the Commonwealth. The taxpayer had an administrative arrangement with Mr Felson to pay the invoices that were rendered by his lawyers.

Edmonds J held that:

  • There was no acquisition of services by the taxpayer for the purposes of s 11-5(a) of the GST Act. Nor was there any taxable supply made to the applicant within the meaning of s 11-5(b).
  • The activities of the taxpayer in funding Mr Felson’s defence of his criminal proceedings did not constitute an “enterprise’ as defined in s 9-20(1)(a) and s 9-20(1)(b) of the GST Act, nor did they form part of, or an adjunct to, a “wider enterprise”, so defined, whether that wider enterprise, properly characterised, is confined to litigation funding or encompasses other activities as well.


Professional Admin Service Centres Pty Ltd v FCT [2013] FCA 1123 (Federal Court, Edmonds J, 1 November 2013).


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