Goods & Service Tax (GST)

Goods and Services Act (GST

Should the partnership of John Mary have changed its GST registration when farming ceased wool classing became the main (then only activity

Though not a common law entity in its own right , the partnership is able to register because the GST law specifically defines "entity " to include a partnership , at s 184 of the main GST Act (For GST purposes , a partnership has the same meaning as it does for income tax purposes

An entity has to be registered only once for GST even if more than

one business is operated . The registration covers both the businesses . There is no need for John Mary to change the registration when they ceased the farming activity

Is the sale of old farmland made as part of the partnership carrying on an enterprise ? Give arguments for and against . Which do you think is the better argument

As defined under the Goods and Services Act and Australian Business Number (ABN ) legislation the term `enterprise ' includes activities done in the form of a business or adventure or concern in the nature of trade . But it does not It does not include

Activities carried on by individuals (other than trustees of charitable funds ) or partnerships (in which all or most of the partners are individuals ) without a reasonable expectation of profit

If this definition is followed then the sale of old farmland does not constitute an enterprise as the partnership is not in the business of either farming or in the property development and consequently the land is not sold with a profit expectation . In that case the sale of old farmland will not be forming part of an active business asset . Since it is not active business asset it can be claimed as input taxed or at best can be sold under the margin scheme which is beneficial to the business .However it is also possible to interpret the farm land as an active asset since partners in the partnership are carrying on the business under the general law . In this case the farmland can be sold as such to the prospective buyer . But although farming business has been done for a period of 5 years the sale cannot be an input taxed sale as the buyer does not have any intention of carrying on the farming business .Hence it is better to go with the argument on the basis of the definition of the term `enterprise ' instead of `active asset If it is sold as part of an enterprise , can it be

Of residential premises

A mixed supply of land residential premises ? If so , how would you apportion it

GST-free as farmland

The sale of residential premises is input taxed under section 40-65 of the GST Act . The supply would be treated as input taxes only when the property is a residential premise used predominantly for residential accommodation . It is not input taxed if the sale is of a residential premise which is a new residential premise (other than...