Sunchen Pty Ltd v Commissioner of Taxation [2010] FCAFC 138

Sunchen Pty Ltd v Commissioner of Taxation [2010] FCAFC 138

The Full Court held that the phrase 'to be used predominantly for residential accommodation' in s 40-65(1) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) requires an objective assessment of the property’s physical characteristics at the date of acquisition, not the subjective intention of the purchaser. As the property was objectively residential premises, the sale was input taxed and no input tax credits were available to Sunchen.

Parties
Appellant: Sunchen Pty Ltd; First Respondent: Commissioner of Taxation; Second Respondent: Administrative Appeals Tribunal
Jurisdiction
Australia
Judgment Date
08 December 2010
Procedural Posture
Appeal / Judgment of the Full Court
Outcome
Appeal dismissed
Legal Topics
Goods and Services Tax, Input Tax Credits, Residential Premises, Statutory Interpretation
Taxation Goods and Services Tax Input Tax Credits Residential Premises Statutory Interpretation

Case Brief

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Parties

Sunchen Pty Ltd

Appellant

Commissioner of Taxation

First Respondent

Administrative Appeals Tribunal

Second Respondent

Procedural Posture

Appeal / Judgment of the Full Court

Legal Issues

  1. 1 Whether the property at the time of its supply was residential premises 'to be used predominantly for residential accommodation' within the meaning of s 40-65(1) of the GST Act
  2. 2 Whether the test is determined by reference to the purchaser’s subjective intention or the objective characteristics of the property

Ratio Decidendi

The Full Court held that the phrase 'to be used predominantly for residential accommodation' in s 40-65(1) of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) requires an objective assessment of the property’s physical characteristics at the date of acquisition, not the subjective intention of the purchaser. As the property was objectively residential premises, the sale was input taxed and no input tax credits were available to Sunchen.

Court Disposition

Appeal dismissed

Orders

  • The appeal be dismissed.