TAXATION LAW. TAXATION LAW. Name of the Student:. Name

Every detail for assignment is given in attached file Need simple and too complicated report.

Running head: TAXATION LAW
TAXATION LAW
Name of the Student:
Name of the University:
Author Note:

Running head: TAXATION LAW
Issue:
The issue which is required to be discussed here is whether ITC can be availed by the
said company.
Rules:
An Input tax credit or ITC is also regarded as a GST credit. It is a credit that can be
claimed by a taxpayer in respect of the GST amount which is included in the cost of the services
or goods called the inputs availed for using in the business of such taxpayer. Input tax credit can
be claimed only when the taxpayer is registered for GST application. Here the issue is to be
analyzed in the light of Goods and Services Tax 1999 or GSTA. This has been discussed u/s 7.1
of the Act. However, two conditions are required to be fulfilled such that GST is imposed. Those
are taxable importation and taxable supplies.
Moreover, in order to claim ITC can be claimed when two conditions are established
which are creditable acquisitions as well as creditable importations.
The taxable importations or taxable supplies denote those supplies or importations that
are made by any organization which has been registered under GST scheme or has eligibility
under the GST for availing it.
Any company which has been registered or has earned the eligibility of getting registered
when get involved in any creditable importation or acquisition will be eligible to claim GST
credits which are already paid for the services or goods related to ITC. Any company or
organization undergoing business activities and are not excluded by statutory provisions must be
eligible to avail services or goods in order to make taxable supplies that cannot be claimed by the

Running head: TAXATION LAW
companies or organizations that act as end consumers. This can be supported by the judgment of
FC of T v Reliance Carpet Co Pty Ltd 2008 ATC ¶20-028.
Section 9.5 states provisions of taxable supplies. According to this section, a taxable
supply occurs when such supply is provided with consideration. This supply must be made when
a business is carried out and it must be related to indirect taxation. The supplier is also required
to undergo registration. However, no supply will be subjected to taxation when it is input taxed
or devoid of GST.
The creditable acquisitions are given in section 11.5 which enumerates that in case
anything is acquired for creditable purpose either partly or absolutely then a creditable
acquisition takes place. Such creditable acquisition also happens when anything taxable is
supplied. The tax payer has to be registered also. Acquisition is being defined in section 11.10
and it states that it includes acquisition made in respect of goods, services, rights or supply. This
input tax claim can be availed in case of creditable acquisitions.
Section 9.70 enumerates that GST on taxable supply is equal to 10% of the value of
taxable supply. Under section 9.75, value of any taxable supply is equal to the product of price
and 10/11. Price here is the consideration.
Application:
This case study enumerates that a company is established for the purpose of developing
and investing and it is named as City Sky Co. Land is bought by it in Brisbane. The purpose
behind such purpose is building 15 number apartments and selling them. It can be presumed that
it had availed GST registration as per the given situation.

Running head: TAXATION LAW
Any company which has been registered or has earned the eligibility of getting registered
when get involved in any creditable importation or acquisition will be eligible to claim GST
credits which are already paid for the services or goods related to ITC. Any company or
organization undergoing business activities and are not excluded by statutory provisions must be
eligible to avail services or goods in order to make taxable supplies and that cannot be claimed
by the companies or organizations that act as end consumers. Hence, it can be presumed that the
company has availed the required registration and its business activities will be having eligibility
of claiming ITC.
It is known that an Input tax credit is also regarded as a GST credit. It is a credit that can
be claimed by a taxpayer in respect of the GST amount which is included in the cost of the
services or goods called the inputs availed for using in the business of such taxpayer. The input
tax credit can be claimed only when the taxpayer is registered for GST application.
The company had made a transaction with Maurice Blackburn, a lawyer for giving legal
advice. The company has paid 33000 for the service. Here it is to be decided whether the service
availed from the lawyer can be considered under the scope of creditable acquisition.
This transaction is required to be discussed in the light of section 11.5 of GSTA. The
creditable acquisitions are given in section 11.5 which enumerates that in case anything is
acquired for creditable purpose either partly or absolutely then a creditable acquisition takes
place. Such creditable acquisition also happens when anything taxable is supplied. The tax payer
has to be registered also. Acquisition is being defined in section 11.10 and it states that it
includes acquisition made in respect of goods, services, rights or supply. This input tax claim can
be availed in case of creditable acquisitions.

Running head: TAXATION LAW
Calculation of the ITC:
Section 9.70 enumerates that GST on any taxable supply is equal to 10% of the value of
taxable supply. Under section 9.75, value of any taxable supply is equal to the product of price
and 10/11. Price here is the consideration.
Therefore, taxable value here = 10/11 * 33000= 30000 dollars.
Hence, ITC= 10% * 30000= 3000 dollars.
Conclusion:
Here the City Sky Company can avail input tax credit provided it can be assumed that it
had availed GST registration and it can claim Input Tax Credit of 3000 dollars.
Answer 2:
Issues:
The issue involved here is whether transactions made by Emma will result into CGT
consequences.
Rules:
The present case study is required to be discussed in the light of Income Tax Assessment
Act 1997, hereinafter referred to as ITAA. As per section 104.10 of ITAA, when a property or
asset is disposed of by its owner and such asset or property is of capital nature, then it will be
considered as an event of A 1 CGT. This event will take place when there will be absolute
transfer of ownership and it must be effected either by the involvement of the parties or by law.
Absolute transfer of ownership does not occur when change in legal title to beneficial title

Running head: TAXATION LAW
occurs. Such transfer involves when a property is disposed of when ownership is transferred
from one person to other. Moreover such CGT event takes place when the individual taxpayer
has acquired the asset after 20.09.1985. In case an asset is being acquired after this ate, then it is
regarded as the post CGT asset.
Section 110.25 of ITAA enumerates the provision of Cost base related to any property of
capital nature. Such cost base includes mainly five elements.
Section 110.25(2) enumerates the element one pertaining to the cost base. It involves the
amount of money spent by the taxpayer in order to acquire the asset. Where the asset is
exchanged for another asset and no monetary exchange is made, then the element one here is
asset’s market value recently.
The second element a given under subsection (3) of the said section includes the money
spent by the taxpayer in relation of the acquisition of the capital asset.
The third element as per section 110.25(4) involves the expenditure made by the tax
payer for the purpose of maintaining the asset. This element three will be considered under the
CB calculation when the asset is incurred after 20.08.1991. It also includes the money spent like
availing loan. The interest paid on the loan is also included. Further it also includes maintenance
cost, repairmen expenses and insurance money paid. However it is not included under cost base
calculation when the asset involved is a collectable or any item held for personal use.
As per subsection 5 of the said section, the fourth element the cost base of the said capital
asset includes the money spent by the tax payer in respect of any legal proceedings in respect of
defending, instituting, reserving the legal title of ownership of the capital asset.

Running head: TAXATION LAW
Further the fifth element of the Cost base includes the amount of money received by an
individual tax payer while the asset was disposed of. Where the asset is exchanged for another
asset and no monetary exchange is made, then the element one here is asset’s market value
recently.
Cost proceeds or CP refers to the amount of money that has been received by a taxpayer
when he disposed of the property an d it is discussed according to section 116.20 of the said Act.
It involves the amount of money earned by the taxpayer in order to acquire the asset. Where the
asset is exchanged for another asset and no monetary exchange is made, then the element one
here is asset’s market value recently.
Moreover section 115 of ITAA 97 states that in case of any capital gain in respect of a
property that has been under the possession of the tax payer for a period of minimum 12 months
then the capital gain will be reduced by 50%. Thus on such property 50% discount is applied.
Application:
From the transactions made by Emma, the CGT consequences will be calculated as
follows in the respective taxation year.
a) Sale of block of land:
Here element 1= purchasing cost of such land= 250000 dollars.
Element 2= cost of stamp duty and legal fees paid= 5000$ + 10000$= 15000 $
Element 3= money spent in respect of insurance, water and council rate= 22000 dollars.
Element 4= legal fees= 5000 dollars

Running head: TAXATION LAW
Element 5= expense of removing the pine trees present on the land= 27500 dollars.
Here Cost base= 250000$+ 15000$+ 22000$+ 5000$+ 275000$= 319500 dollars.
Capital proceeds= 1000000$- 25000$= 975000$.
b) Sale of Rio Tinto shares of 1000 numbers
Cost Base = 1,000 *3.5 dollars = 3,500 dollars
Capital Proceeds = $50.85 * 1,000 = 50,850 dollars
Capital Proceeds after deduction of brokerage cost = 50,850 $ – 2% of 50,850$ = 49,833 dollars
c) Sale related to collection of stamp
Capital Proceeds = 50,000 - 5,000 = 45,000 dollars
Cost Base = 60,000 dollars
Loss= 60000- 45000= 15000$
d) Sale related to Grand Piano
Capital Proceeds = 30,000 dollars
Cost Base = 80,000 dollars
Loss= 80000- 30000= 50000 dollars
In respect of selling of the piano and stamp collection, it is seen that cost base is more
than CP, hence capital loss results. Thus these will b not included in the CGT calculation.

Running head: TAXATION LAW
Moreover both of these are collectables so the loss out of these transactions cannot be used to
reduce capital gain. Hence this loss will be carried towards the calculation of next year.
Hence, CGT consequences resulting from the above discussion are discussed below;
Amount ($) Amount ($) Amount ($)
Selling of the Land
Capital Proceeds 975,000
Cost Base 319,500
Capital Gain Tax gain 655500
after discount CGT gain 327750
Selling of shares
Capital Proceeds 49,833
Cost Base 3,500
Capital Gain Tax gain 46333
after discount CGT gain 23167
Net CGT 350917
Conclusion:
Thus it can be concluded that net CGT gain amounts to 350917 dollars.

Running head: TAXATION LAW
References:
FC of T v Reliance Carpet Co Pty Ltd 2008 ATC ¶20-028
The Goods and Services Tax 1999
The Income Tax Assessment Act 1997 (Cth)