QUESTION 1 Issue The given case about the company dealing in property investment and the development. Company has purchased a piece of vacant land in South Brisbane for construction of 15 apartments for selling out. City sky has availed the services of a local lawyer for providing legal services related to the development work related to the apartments. Lawyer charged fees of $ 33000. An established sole proprietor business is run by Maurice Blackburn with turnover of around $ 300000 per year. In the present question company wantsto avail the input tax credit related to the services provided by lawyer. It is is to be identified whether input tax credit can be availed by company for the legal services assuming that City Sky is registered under GST. Rules Property Tax Property tax is tax on property value of property value. Governing authority levies the property tax of the relevant jurisdiction where the property is situated. Property in Australia is taxed over both levels which are State and Council. Stamp duty is generally known as state tax. Land tax is state tax which is to be assessed each year on value of the property but in most of the states there is exemption related to land tax (Varela, 2016). GST The goods and service tax is levied on supply. It is value added tax on sale of goods & services. GST is levied is levied over most of the transactions which are incurred in production process, in most transaction GST is refunded to parties in production chain other than final customers. GST is to be paid by person who is providing taxable supply. Every Australian having the turnover above the threshold limit is required to register under GST (Millar, 2017). Businesses having turnover below the threshold limit have the option of being registered. Activities are treated as enterprise if land is bought with motive of reselling it at a profit.The term property include land, land & buildings. GST can be claimed by purchasers of real state property if Buyer is registered for GST There should be tax invoice on purchase on which GST has been paid. Property should be used for carrying on enterprise. 3
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