LAWFUEL – The Legal Newswire – From Tax Etcetera – The Full Federal Court of Australia has confirmed NZ’s practice (TRA 001/02, Decision No 19/2003, Judge Willy) of reversing the GST on a deposit where the contract is cancelled and the deposit forfeited.
The AAT (our TRA equivalent) had ruled that the deposit was a separate supply so the vendor could not get a refund of the GST paid on the deposit and the purchaser kept his refund claim.
The Federal Court followed the NZ thinking that there is always only one supply (of land) and if the supply is cancelled then all GST consequences are reversed. Reliance Carpet Co Pty Ltd v FCT [2007] FCAFC 99 (5 July 2007, Heerey, Stone and Edmonds JJ).
