Study of GST and Capital Gain Tax Cases

ASSIGNMENT

Table of Contents
Introduction........................................................................................................................3
Answer 1............................................................................................................................3
GST................................................................................................................................3
Introduction to GST........................................................................................................3
Reference of Case given in question.............................................................................3
Introduction to Reverse Charge Mechanism..................................................................3
Case Solution.................................................................................................................4
Introduction of Input Tax Credit......................................................................................4
Input Tax Credit in the context of Case..........................................................................4
Conclusion of the case...................................................................................................5
Answer 2............................................................................................................................5
Introduction of the Capital Gain Tax...............................................................................5
Capital Losses................................................................................................................5
Tax Payment..................................................................................................................5
Tax on Sell of shares......................................................................................................6
Cost inclusions...............................................................................................................6
Collectibles.....................................................................................................................6
Study of the Given Case................................................................................................6
Share Sale......................................................................................................................8
Stamp collection purchase by Emma from a Private collector.......................................8
Year 2015....................................................................................................................8
Sale of Grand piano....................................................................................................8
References.........................................................................................................................8
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Introduction
This assignment deals with the study of the two given cases which are related to two
distinct taxes of Australia. The brief study of both the taxes is been carried out for
answering both the questions. All the cases are been solved with the context of these
laws and the study is been given below.
Answer 1
GST
Introduction to GST
The first case is been given related to the goods and service tax. This tax is also known
as value-added tax. This name is given to this tax as it adds on the value to the goods.
The value of the commodity increases at each at every level that is the value is added
at every chain of supply and reaches the final customer with the last value addition. The
tax GST is the tax which is the destination-based tax. This is a consumption tax on
which tax is to be paid by the actual consumer the theory on which this tax is based on
is that the tax pain should be borne by the consumer or the last person using it. There
are a number of persons involved in the transaction. This is the pain which was to be
borne by the consumer and the person who is the actual bearer would be giving the tax
and the rest of the people who will be paying the tax will get the credit back out of it.
All the firms who are eligible to get registered under the GST shall get registered under
the law as well as the persons and firms which voluntarily want to register can also get
registered with the tax law. All the persons who get registered should follow all the
provisions and rules and should work in accordance with that only. (Anon., n.d.)
Reference of Case given in the question
The case given in the question says that the company has taken the services of the
Lawyer and that are used for the business purpose and for the received services they
have to pay a fee to the lawyer. This transaction will attract GST and will be paid in the
way discussed below.
Introduction to Reverse Charge Mechanism
This is a scheme specified in the GST law and this scheme has a list of several services
on which the tax is to be paid by the person or entity that is paying the charges for the
services they have received. There are a number of services specified in this list and
hence these are the services where tax is to be paid by the entity which is registered
under the law. (Anon., n.d.)
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