Taxation Law Australia Case Study 2022

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................5
References:...............................................................................................................................10

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Answer to question 1:
Issue:
The readings of this case is concerned with the entitlements associated to the input tax
credit which the taxpayer in the current case may be considered eligible for certain
transaction.
Laws:
The goods and service tax came into the existence during July 2000 and it replaced
the numerous indirect taxes that also included the whole sale tax and the indirect state taxes.
GST is treated as the tax on final consumption inside Australia and imports that are made
inside the Australia. With regard to “sec 7-1 GST Act”, GST is generally considered payable
on the assessable supplies and the assessable imports (Hellerstein 2015). GST is usually
lowered through input tax credits related to the creditable purpose and creditable imports.
Under “sec 9-10 (1)”, GST Act there must be a supply of goods and service by the
supplier. The term supply refers to any type of supply of any kind (May 2016). Particularly it
comprises of goods and services, advice or information, rights associated to the real property
and an entry in or release from any form of obligation. “Sec 9-5, GST Act” defines the
taxable supply as;
a. There should be a supply
b. The supply is made by the taxpayer for consideration
c. The supply has the connection with Australia
d. The supply is made by the taxpayer during the ordinary business course and for
continuance of a business activity

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e. The supplier is treated as registered for GST or they are under obligation of obtaining
registration for GST.
It is necessary for a taxable supply to have the consideration. This would immediately
include the price which is inclusive of GST. The relation between consideration and supply is
given in “paragraph 9-5 of the GST Act”. According to the “paragraph 9-5 (a)” it requires
that for a taxable supply a taxpayer makes the supply for consideration (Millar 2014). As
understood from the above given explanation, the meaning of consideration under “sec 195-
1” includes the payment that is made in relation with the supply. As held in the case of “AP
Group Ltd v Commissioner of Taxation [2013]” the law court verdict denoted that the
consideration should have connection with supply however the supply should also be made
for consideration.
Apart from the taxable supply there is also an area that taxpayers needs to place
emphasis as well. This includes the reverse charge mechanism. Under this method the
receiver of goods or services is under obligation of paying GST rather than the supplier. The
rules of the reverse charge says that things apart from the goods and services will be the
subject of GST when the Australian business makes purchase and things are done out of
Australia or it is made with the help of business that is carried on by seller out of Australia
(Feria 2019). The rules of reverse charge is applicable if the purchase is successful in meeting
both the conditions and circumstances that are given below
 The reverse charge rule is applicable on the conditions that taxpayer has purchased a
thing that is completely for business they are carrying on Australia
 The sale is exchange for payment
 The receiver is registered for GST or they are required to be registered for GST.