City Sky - GST Input Tax Credit and CGT Outcomes Calculation

Learn about GST Input Tax Credit and CGT Outcomes Calculation in City Sky. Get expert guidance on tax laws and regulations in Australia. The article discusses the legal formalities to gain profit, time limit for claiming returns, acquisition of tax invoice, invoice of service and goods, registered company/person, and more. The article also covers the calculation of CGT outcomes for the financial year 2015 of Emma’s. Read now!

Running head: CITY SKY
City Sky
Name of the student:
Name of the university:

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Table of Contents
ANSWER 1:..................................................................................................................................................3
ANSWER 2:..................................................................................................................................................5
References...................................................................................................................................................9

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ANSWER 1:
In this case, two important factors provide obligations regarding GST statutes and the method by
which the input tax can be credited for GST.
EXAMINING THE CASE:
The company known as the city sky is a company that is known for investment property
in the rated matter, this company develop, resell, let out and acquire properties. This company is
identified for acquiring property in the city of Brisbane. The project that is planned by this
company is building a fifteen-floor building that they have a plan for selling it. Maurice
Blackburn is appointed for this company. He is a lawyer by profession and he gives legal advice
and permission to the company (Altmann, 2015) The company City Sky paid this lawyer a huge
amount of 33,000 dollars for his service.
The main intention of this case study is to implement the obvious technique to retrieve the
GST that was put up with the legal cost of the project. In the present case, the company has
invested almost 30,000 dollars for legal service ($33000*100/110) + GST of
$3000($30000*10percentage). For acquiring Input Tax Credit (ITC), the company should follow
the legal formalities to gain profit.
According to Federal authorities when the input tax is connected to GST it involves
assesses that is a concern with people who have registered themselves as per GST act can they
can get GST while selling. While accepting the goods and services they have to pay the tax. The
charge has to pay back the authorities that are concerned with the profit maximization from their
customers. The taxes are brought up for the reason that of the services and the purchase will be
lessening from the total GST received from the customers (Braithwaite and Reinhart, 2019). This
process of getting discounts is known as Input Tax Credit. There are specific conditions to assess
and claim the ITC:
 Time Limit for Calming Returns:
The time for claiming the returns are very less and short, it is very difficult to the actual
return in a very short period. The total period for returning the demand is sufficient for any

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individual even though some people have a lot of problems due to the insufficiency of time for
demanding tax returns. The procedure of demanding returns is very simple it is not difficult as
people think. The most important point is the claiming return that has a fixed period that makes
people difficult to adjust (Bruce, 2017). The Tax department of Australia has maintained a
certain time for demanding total returns legally. The client has to be very accurate with time
management or else he or she will fail to avail of the benefits that are related to the return claims.
The tax assistant can provide help to the customers but they are busy with their work in that
period as this is the most common problem of the taxpayers all around the county and world. The
time management should be very important in this matter time limit should be taken seriously
while demanding actual tax returns. The main reason for the problem is that there are many
taxpayers and the amount of time is very short so it is difficult to gain the tax return policy from
everyone.
 Acquisition of Tax Invoice:
Tax receipts play an important role in the tax interrelated case. In this case, the company City
Sky has allocated local lawyers for deliberating the fundamentals related to tax judiciary (Burnett
et al., 2015). The company should reflect on the tax receipts as per the requirements. The tax
receipt is a very important document and it acts as a very important record during the tax filing
process. The tax receipts show whether the company has paid the tax or not. It is very important
to keep tax receipts from companies. If the client misplaced or lost the receipt, then he or she has
to pay the tax twice. Therefore, it is very important to preserve the tax receipt or invoice.
Keeping all the old receipts will help to calculate the present taxable amount so it becomes
necessary to keep all the receipts for further tax disbursements. The tax receipts are certified and
received document while filing taxes. Tax receipts should be preserved and once the client pays
the taxes, thus the document is vital for tax payment as per ITTA 1997.
 Invoice of Service and Goods:
It is very important to secure the receipt related to details in case of selling or purchasing
specific services and goods (Cannon and Kendig, 2018). The tax rule states that every tax
receipt whether it is a wholesale transaction or retail transaction should be secured. The
transaction becomes legal only once the transaction receipts become secure. The receipt serves to

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prove that the transaction happens at the precise time and place with the standard amount. There
is no other document to prove the contract. While paying these taxes these transaction invoices
play an important role in authenticating the transaction, as it is the only document that a
customer has relating to the transaction procedure. According to the Australian tax department if
the transaction invoice is missing it, turns into very complex to prove if the transaction happened
or not.
 Registered Company/person:
Maurice Blackman and City Sky should both register themselves as per this Act as the main
objective for gaining credit of GST are the authorities that sell or purchase services and goods
should register themselves under the GST Act. In this case, the company has registered
according to the act. GST acts as the lawyer owns a personal trading business and has collected
300,000 dollars of revenue for a year (Cook et al., 2016). According to the GST Act, the business
owners should register themselves under GST act if their annual income exceeds $75000 for a
particular year. The registration continues without paying attention to the ensuing revenues after
the company has registered itself once. Since both parties have registered under the GST Act, the
company is eligible for gaining credits.
Conclusion:
It can be concluded that City Sky can gain credit relating to the incurred GST while availing
legal services as the above case in both the parties have registered them under the GST status and
stand by the obligations that are related to the act.

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ANSWER 2:
In this case, the CGT outcomes for the financial year 2015 of Emma’s have to be
calculated so that the various scenarios of CGT can be incorporated. Indexation is ignored in the
current case for the reason the calculation will certainly suffer (Deeter-Schmelz, 2015). CGT and
decisions are different when indexation is considered in the CGT. In this present case almost
50%, the discount procedure is calculated. Based on income tax section104-10, the Assessment
Act of 1997, while disposing of assets the dissimilarities related to the assets cost base and
capital proceeds help in calculating the capital losses or gains. In the Income-tax assessment act,
the capital losses or gains can be alienated based on the long term and short term. The assets that
were acquired before 1985 or that year will be considered according to the cost structure of
January 1985. In the present case, indexation has not been into observation so the discount is
calculated in 50% CGT (Spiro, 2018). In this case Emma, the assessee has to pay CGT alongside
the total capital gain that is calculated in the same financial or assessment year.
In this present case, the assets that were sold in the financial year are listed and the capital
losses and gain have been calculated below:
Land:
After observing the present case the property has, acquire many expenses that are not
permitted according to section 4-10, ITTA-1997 (Dimmock et al., 2018). Since they do not
contribute to the overall valuation of the property, the council expenses and litigation expenses
of 22000 and 5000 are not allowed in the present case. The price is adjusted with the yearly
rental income in a particular period only. As well, the interest expenditure of 32000 dollars is to
be subtracted from the yearly income at a particular time after the interest is paid.
According to section 104, the expenses that are deposited due to the sales or the costs that are
incurred for making the sales need to be reduced directly from the total incomes. Therefore, the
cost that is related to brokerages, auctioneer charges, and advertisements is reduced as a result
(Eagers et al., 2018). However, the index cost is deducted from the amount that is calculated as

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total sale proceeds. Thereafter the duration of the capital loss is subtracted from the long duration
capital losses. All these are taxable amounts at the end and it is the ultimate effect.
Land:
The procedure of selling the land will affect due to longer duration capital loss. In this
case, the property owner is selling a piece of land at 1000000 dollars. Therefore, the land can be
transported to other parties that can affect the capital in the long term. Capital that is related to
the long term is functional for selling the land acts as a capital loss for the customers (Krever and
Sadiq, 2019). In this case, the laws that are involved with the land clause are measured in the
Australian tax office. After local legal counselors send the apt legal advice, the client, in this
case, is supposed to take into consideration the clause that is referred to as per the given
condition.
In this present case, the client has sold a piano for 30000 dollars that were purchased for
80000 dollars by the client in the year 2000. The recommendation that needs to be given to the
client is that she should keep the legal proceeding in her mind. The maintenance of the sale
proceedings should be directed by the ATO acts as enduring by the lawful procedures that help
in making the procedure easier to comprehend. As per the clauses that are related to CGT that is
Capital Gain Tax, it is mandatory to inform the tax authorities about buying and selling newer
and old assets. In the total taxable amounts from the government, Capital Gain Tax will help the
customers to gain discounts (Marshall, 2018). The client in this present case can enjoy rebate in
tax payment by just informing the government about the capital dealings. While submitting the
government taxes the client Emma should clarify the dealings that are related to capital losses or
gains. The first outcomes that Emma felt are vital for tax payment (Milligan et al., 2015). The
Australian tax department formulated the ITTA act in 1997, According to this act the capital
loses or gains related clause clarifies the procedure which should be put into practice for
completing filling and planning of tax procedure. Therefore, the very important recommendation
to Emma is that she should follow the rules and regulations and the respective clauses that are
related to the payment of taxes that will automatically help in improving her work.
Conclusion:

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After going through the present case, it has been very clear that Emma has been occupied
in some property dealings resulting in few capital transactions. It is noticeable in the capital
losses and gains which she has acquired. In this case, the client Emma has sought suitable legal
advice related to these capital losses and gains. These transactions will affect the tax payment
system of the clients therefore; Emma wants to follow the legal proceeding for the sale and
purchase. According to the ITTA act of 1997, many clauses can be used for determining the
capital loss and gain for the purchase and selling the capital assets. In the clause, it has been
mentioned that in the situation under which the clients report to the government regarding any
issues related to the capital gain or loss then the organization will make sure that the clients
receive discounts for paying the tax. This is only beneficial for the clients if the client is
following the rules and regulations according to the clauses under the Australian Tax Office
(ATO).

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References
Altmann, E., 2015. Policy implications for governing Australia’s apartment communities:
Tenants, committees of management and strata managers. Housing in 21st Century Australia:
People, Practices and Policies, pp.121-136.
Braithwaite, V. and Reinhart, M., 2019. The Taxpayers' Charter: Does the Australian Tax Office
comply and who benefits?. Centre for Tax System Integrity (CTSI), Research School of Social
Sciences, The Australian National University.
Bruce, M., 2017. Multinational Anti-Avoidance Law (MAAL) and Pt IVA—a critical analysis of
the Tax Laws Amendment (Combating Multinational Tax Avoidance) Bill 2015 (Cth) and
Treasury Laws Amendment (Combating Multinational Tax Avoidance) Bill 2017 (Cth) and
comparison with general anti-avoidance provisions. Australian Tax Law Bulletin, July, pp.2018-
70.
Burnett, C., Taylor, C.J. and Wong, J., 2015. Qualification of Taxable Entities and Treaty
Protection: National Report for Australia. CAHIERS DE DROIT FISCAL INTERNATIONAL:
STUDIES ON INTERNATIONAL FISCAL LAW, 99.
Cannon, L. and Kendig, H., 2018. ‘Millennials’: Perceived generational opportunities and
intergenerational conflict in Australia. Australasian Journal on Ageing, 37(4), pp.E127-E132.
Cook, N., Davison, A. and Crabtree, L. eds., 2016. Housing and Home Unbound: Intersections in
economics, environment and politics in Australia. Routledge.
Deeter-Schmelz, D.R., 2015. Personal Selling and Sales Management Abstracts. Journal of
Personal Selling & Sales Management, 35(4), pp.346-357.
Dimmock, S.G., Gerken, W.C., Ivković, Z. and Weisbenner, S.J., 2018. Capital gains lock-in and
governance choices. Journal of Financial Economics, 127(1), pp.113-135.
Eagers, J., Franklin, R.C., Yau, M.K. and Broome, K., 2018. Pre‐retirement job and the work‐to‐
retirement occupational transition process in Australia: A review. Australian occupational
therapy journal, 65(4), pp.314-328.
Krever, R. and Sadiq, K., 2019. Non-residents and capital gains tax in Australia. Canadian Tax
Journal/Revue fiscalecanadienne, 67(1).
Marshall, W.E., 2018. Understanding international road safety disparities: Why is Australia so
much safer than the United States?. Accident Analysis & Prevention, 111, pp.251-265.
Milligan, V., Hulse, K., Pawson, H., Flatau, P. and Liu, E., 2015. Strategies of Australia’s
leading not-for-profit housing providers: a national study and international comparison. Final
Report No. 237.
Spiro, P.S., 2018. Tax policy and the underground economy. In Size, causes and consequences of
the underground economy (pp. 179-201). Routledge.

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