Miscellaneous 2005

Tax Case: No recovery of input tax credits for trust

Source: Taxation In Australia Journal Article

Published Date: 1 Sep 2005


The Full Court of the Federal Court Australia (Hill, Stone & Allsop JJ) in its decision on the appeal to the AAT Recoveries Trust case (H P Mercantile Pty Ltd v Commissioner of Taxation [2005] FCAFC 126) has now given strong judicial guidance on the core GST concept of whether an acquisition is made for a 'creditable purpose' such that the taxpayer is entitled to claim an input tax credit. This is a critical design feature of value added taxes like the Australian GST, as expressly identified by the Court, because it ensures no cascading of GST so that the tax is only levied on the 'value added' by a business.

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Miscellaneous 2005

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