GST issues registers

Issues in this register that are a public ruling can now be found in the Public Rulings section of this Legal Database.

Issues in this register that have not been labelled as public rulings, constitute written guidance. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information on these issues and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.

If you feel that the guidance in this issues register does not fully cover your circumstances, or you are unsure how it applies to you, you can seek further assistance from us.

Are the intermediate entities required to show the DAL collected at G1 and G11 of their business activity statement (BAS)?

Is the levy amount considered to be ordinary income of the intermediaries and need to be included at T1 on their BAS?

Where a piece of crown land is leased for a second time will the supply of the second lease be exempt from GST under section 38-445 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

What are the GST consequences on the sale of a farm that includes an area under licence from the crown or a third party?

How does section 38-480 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) apply to supplies of farmland?

Is the sale of farm land GST-free if a farming business has been carried on for five years but the land has not been farmed continuously during the five years preceding the sale?

Is the sale of farm land GST-free if a farming business has been carried on for five years but not for the five years immediately prior to the sale?

Is the sale of farm land GST-free if a farming business has been carried on for five years immediately prior to the sale, except for a break which occurs as a consequence of sale?

What are the GST consequences if the purchaser acquires farm land GST-free but does not actually carry out a farming business?

When farmland is purchased GST-free, is a time limit imposed upon the recipient to commence the carrying on of a farming business?

Does exemption for supplies of farm land under section 38-480 of the GST Act depend upon the period of time that a purchaser intends that a farming business be carried out on the land?

This section has been moved to 6.6.1 - GST and inter family transactions

This question relates to a transitional issue that was more relevant at the outset of GST. The answer is displayed here for reference purposes.

Where a contract for the sale of farm land includes plant in the form of a chattel, would the chattel be considered a separate supply and subject to GST?

Where a security deposit is paid on part of a land sale contract, when does the liability arise? The agreement is that the deposit may be forfeited if the purchaser does not complete the contract.

Does the recipient of a supply that is GST-free under section 38-480 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) have to make an increasing adjustment under Division 135 of the GST Act if the use of the land is converted from:

the conduct of a farming business to

the conduct of another enterprise in the course or furtherance of which supplies are made that are either taxable or GST-free?

Can there be an increasing adjustment under Division 129 of the A New Tax System (Goods and Services Tax) Act 1999, if the use of the farmland purchased GST free under section 38-480 of the GST Act is different from the intended use when it was purchased?

In operating a farming business, is a farmer entitled to input tax credits in relation to expenditure incurred on uncleared bushland sections of his farmland?

When farmland is sold GST-free, how are the costs incurred in the sale treated for GST purposes?

A farmer registered for GST enters into a covenant, or other agreement, for part of the farmer's land to be set aside for conservation purposes. The farmer receives money, or other consideration, for supplying the land and the rights to the land. Is the supply subject to GST?

This section has been moved to 6.2.13(a) - Leases to Associates

This section has been moved to 6.2.1(a) - Farm Land

Does the reference to long-term lease in section 38-475 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) and section 38-480 of the GST Act (the farmland provisions), cover pastoral and other leases granted by Commonwealth, State or Territory governments in circumstances where those leases are granted for a period of less than 50 years but are either renewable, or can be converted to perpetual leases or freehold title?

When will a short-term lease of land by the Commonwealth, a State or a Territory be GST-free under section 38-450 of the A New Tax System (Goods and Services) Act 1999 (GST Act)?

Can section 38-480 of the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act) apply to the sale of farmland where the land has been previously leased as a farm, and where the lease has terminated prior to the sale. From the time of termination of the lease to the sale of the farmland, no farming business has been carried on, on the land. The purchaser of the freehold farmland intends to carry on a farming business on the land.

Will the requirement for the supply of a long-term lease to be for at least 50 years as described in section 195 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), be met where a lease with an original term in excess of 50 years is assigned part way through the original term and the time remaining until the cessation of the lease is less than 50 years?

This issue has been removed. Please refer to issue 6.5.2.

What are the GST consequences when a tenant attaches a fixture to farmland?

How does GST apply where I sell my farm land to my son/daughter, assuming the following:

The final consideration is determined,

Payments are periodical and spread over time (with payments able to be changed from time to time),

Property passes at the earlier of the full amount being paid, or upon death, it being bequeathed pursuant to the will.

Is a landowner who allows a related entity to conduct a farm business on the land carrying on an enterprise for the purposes of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Is the landowner required to be registered?

Is the supply of land taxable?

(i)

Is there a taxable supply of land from the landowner to the business operator?

(ii)

Can the landowner and the business operator group?

Is there a taxable supply by the landowner?

What are the GST implications when livestock are transferred by an entity registered for GST using an election under section 70-100 of the Income Tax Assessment Act 1997 (the ITAA 97)?

The sale to a single purchaser of:

•

land with standing timber on the land at time of sale;

•

land together with already felled timber;

•

grazing permits?

Will government relief payments associated with the destruction of livestock, crops, etc., due to disasters, for example, bushfire, flood, oil spill, etc., be subject to GST?

For PAYG purposes how is the income from the forced disposal of livestock treated?

Will dairy farmers be liable for GST on payments made under the Dairy Structural Adjustment Program (DSAP) and the Dairy Exit Program (DEP)?

What is the Income Tax effect of the Dairy Structural Adjustment Program (DSAP)?

(a)

(i) What happens to the quotas once the regulations are removed?

(a)

(ii) After deregulation by the States quotas will no longer exist. Does this mean that they have zero value and holders can realise a capital loss?

(b)

(i) Do quotas have to be sold to realise any capital loss?

(b)

(ii) Is the capital loss attributable to the 1999/2000 income year or the 2000/2001 income year?

(c)

(i) Do State Governments actually have to resume the quotas at 'nil' value for a capital loss to exist?

(c)

(ii) Is such a capital loss allowable for taxation purposes?

Are the payments of income support and existing debt interest rate subsidies from the Federal Government Flood Package to farmers subject to GST?

Are the payments of reimbursement grants for small business and crop replanting from the Federal Government flood package to farmers subject to GST?

Will farmers be liable for GST on payments made under the Farm Help Income Support (formerly Restart Income Support) and the Farm Help Re-establishment Grant Scheme (formerly Restart Re-establishment Grant)?

1. Income support payment

1.1 Will the Farm Help income support payment be assessable income to the recipient?

1.2 Is the Farm Help income support payment included in the instalment income of the recipient for PAYG instalments purposes?

1.3 Will the beneficiary rebate apply to the Farm Help income support payments?

1.4 Is the payment to be treated as income from primary production in applying the provisions of Division 392 ITAA97 - Long-term averaging of primary producers' tax liability?

2. Re-establishment grant

2.1 Will the Farm Help re-establishment grant be assessable income to the recipient?

2.2 Will there be Capital Gains Tax implications on the receipt of the Farm Help re-establishment grant?

2.3 Is the Farm Help re-establishment grant included in the instalment income of the recipient for PAYG instalments purposes?

A grant is paid under an agreement for the period 1 July 1999 to 30 June 2000 The agreement stipulates that any monies that remain unspent as at 30 June 2000 must be refunded to the government unless alternative arrangements are made, and

Agreement is reached whereby the grantee will be able to spend the excess funds in the 2001 financial year.

Is the payment of a reimbursement grant from the Victorian Rural Infrastructure Development Fund (RIDF) to farmers for the completion of a stock under/overpass subject to GST?

Are payments to canegrowers under the Sugar Industry Assistance Package subject to GST?

Should payments made to sugar cane farmers under the Interest Rate Subsidy scheme, which is part of the Sugar Industry Assistance Package, be included at G1 on the farmer's business activity statement (BAS)?

Interest Rate Subsidy (on loans used for planting cane crops)

Interest Rate Subsidy (loans associated with the business of producing cane)

Income Support Payment

Vouchers to access financial counselling services

If the rates and taxes exceed $75,000 per annum, will this make any difference to the outcome?

Where the amount payable is less than $75,000 would the landowner require an ABN to avoid the operating entity withholding 46.5% of the rates for PAYG withholding?

If the partnership has no ABN, does the no ABN withholding rule apply?

What are the GST implications where primary produce is used or consumed by the producer?

For further information on registration issues please refer to the registration menu of GST essentials.

Can the entity proceed to supply its enterprise as a going concern if it is first able to remedy the loss of the asset, for example, by (a) leasing another boat, (b) repairing the damaged boat, or (c) purchasing another boat?

a)

the futures contracts are created; or

b)

only when there is a physical delivery of produce?