Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
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TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................4
References:...............................................................................................................................10

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Answer to question 1:
Issues:
This case will be dealing with the issues that is related to the determination of the
claims regarding the input tax credit originating from the creditable acquisition.
Laws:
The “GSTR 2008/1” is mainly dealing with the transactions that a business acquires
or imports the goods completely or in parts for the creditable purpose. To get the input tax
credit the taxpayer here is required to make the creditable acquisition (Tang 2016). In order to
make the creditable acquisition or importation it is necessary that tax payers makes the
acquisition or the importation solely or in parts for the creditable purpose. As explained in the
“GST Act 1999” the common entitlement to the input tax credit happens from the creditable
acquisition and the creditable importation.
Explanation relating to creditable acquisition is given in “Div 15” that deals with the
creditable importations. As noted in “sec 11-5, GST Act 1999” creditable acquisition refers
to the situation when a business acquires the anything which is completely or partially for the
creditable purpose and the supply of thing to the business is completely for taxable purpose
(Seiden and Apkarian 2017). “Sec 11-15” says that a business usually acquires a thing for the
creditable purpose till the extent that the thing which is acquired is entirely for carrying the
enterprise.
As per the “GSTR 2008/1” a supplier that is making assessable supplies will be
considered liable for GST on those supplies. The supplier is treated entitled to obtain an input
tax credit for acquisition made by them which relates to the making the supplies (May 2016).
The court in “HP Mercantile Pty Ltd v Commissioner of Taxation (2005)” held that the

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taxpayers will be able to get the input tax credit when it essential that the credit provided is
assure that the output tax that is payable by taxpayer is not imposed on those sum which
already has the tax payable at certain stages (Brandon 2019). The input tax credits are aimed
at assuring that the GST which is included in the purchase price for the acquisition given the
acquisition is made completely for the business purpose. A supplier that is making taxable
supplies will be considered liable for GST. The supplier will be considered entitled for
claiming the input tax credit regarding the acquisition which is associated to making the
taxable supplies.
Entities that have the registration of GST will be entitled to get the input tax credit for
creditable acquisitions. According to the “sec 11-5, ITAA 1997” a creditable acquisition is
made given the company has made the acquisition solely or partially for the creditable
purpose (Millar 2016). In most of the cases it becomes necessary to ascertain a relation
between the things which is acquired by the company that is carrying on its business
activities. For instance, if a company acquires a shoe to sell it from its shop then it becomes
clear that the company has acquired the shoes during the course of carrying on its business.
Application:
The company here City Sky Co is regarded as the property investment and
development company. The company has acquired the vacant land on which it intends to
build around 15 apartments for sell. The purchase of land can be considered as the creditable
acquisition since the vacant land is completely acquired for creditable purpose. Referring to
“sec 11-5, GST Act 1999” it can be stated that the City Sky Co has acquired the land for
creditable purpose and the construction of apartment on the vacant land for sale is entirely for
the taxable purpose (O’Rourke 2016).