Australian Tax Law

Running Head: AUSTRALIAN TAX LAW
Australian Tax Law
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AUSTRALIAN TAX LAW
Table of Contents
Q 1......................................................................................................................... 3
Analysis of City Sky Co....................................................................................... 3
Conclusion.......................................................................................................... 5
Q 2......................................................................................................................... 6
Emma Case study............................................................................................... 6
Conclusion.......................................................................................................... 8
References............................................................................................................. 8

AUSTRALIAN TAX LAW
Q 1.
Analysis of City Sky Co.
The company stands out to be the beacon or the headliner when it comes to investment in
properties in Australia given the fact that the company recently has taken over a land based
area in South Brisbane with a view to construct fifteen apartments therein. For the purposes
of development, a financial allocation of $ 33000 has been made and a lawyer by the name
Maurice Blackburn (having a sole proprietorship turnover of $ 300000) has been hired.
This case study stipulates a situation wherein Maurice is required to advise the company
regarding ways of claiming and utilizing input tax credit on the basis of the assumption that
the company has availed GST registration. Herein, input tax credit is a concept that has been
introduced by the government in lieu of avoiding double incidence of tax payments such that
tax amount paid on any input will be deductible from the net output tax payable (Krever and
Teoh, 2016). Pre – GST regime, the situation was such that every product or service was
subjected to a double taxation scenario (both Central and State) – which has now been
subsumed under a one tax umbrella. In Australia, every entity sporting a minimum turnover
of $ 75000 is required to be GST registered. Herein, the company is under a legal charge
liability to the tune of $ 30000 ($ 33000 * 100/110) with a GST liability of $ 3000 arrived at
applying a 10% tax rate on $ 30000.
However, GST registration is not mandatory for ground level necessities such as health care
based products and services, education and food, etc. (Pearl, 2016) This does entail a
consequent scenario of rules on which credit claiming is not possible. They are :
 Non – registered businesses cannot go for generation of taxable invoices.
 Goods categorized as necessities or goods utilized for personal purposes.
 Remuneration payable to staff workers in the form of wages.
 Purchase of motor vehicles that involve a consideration above the stated limit in the
GST rules.
There are certain cases though in which claiming input tax credit is allowable :
 Goods sent to workers : This is a common scenario wherein goods are sent to workers
or job based workers specifically (contractors) for the purposes of further fine –
tuning or processing the goods. The primary manufacturer is hence eligible to claim