Taxation Theory Practice & Law (pdf)
Added on 2021-02-19
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Taxation Theory, Practice &Law
TABLE OF CONTENTSQUESTION 1...................................................................................................................................1Rule..............................................................................................................................................1Application...................................................................................................................................2Conclusion...................................................................................................................................3QUESTION 2...................................................................................................................................1Rule..............................................................................................................................................1Application...................................................................................................................................2Conclusions..................................................................................................................................3REFERENCES................................................................................................................................5
QUESTION 1City sky Co a property investor & development company purchased a vacant piece in southBrisbane with a motive of building 15 apartments for sale. Company has entailed the services ofMaurice Blackburn a local lawyer for providing legal guidance on development for $ 33000. Awell established proprietary business is being run by lawyer Maurice Blackburn having turnoverof $ 300000 for the year. The tax credits entitlements for the City Sky are to be found outassuming it to be registered GST company. RuleGST - It is a general principle related to tax on supply. GST is payable by person whohas made the taxable supply. GST is paid by purchaser only when contract with seller requiresthe GST to be paid by purchaser or to be reimbursed to seller which he is required to pay.Generally it is seller who have to pay GST to ATO which is ultimately paid by consumer. GSTis applicable on purchase and sale of land. One has to be clear whether GST rates are applicableon it or not. As per guidelines of ATO, GST credit can be claimed if the prices is paid for thepurchase of goods or services which are bought for the business purpose. This is also known asinput tax credit. Credit for prices inclusive of taxes for business inputs (Claiming GSTcredits,2019) GST credit can be claimed if following conditions are satisfiedThe purchase or service was undertaken partly or solely for business and it is not relatedto making of input taxed supplies. Purchase price is inclusive of GST.Tax invoice for the goods or service is available from supplier. Circumstances where GST credit cannot be claimed If the company is not GST registered.Purchases that are not having GST inclusive in their prices,◦Sale is GST free.◦Where the purchase is input taxed. ◦Purchases from unregistered supplier or that has applied for registration.For wagesIf tax invoice is not available for purchases costing above $ 82.501
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