Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCA 233

FEDERAL COURT OF AUSTRALIA

Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCA 233

TAXATION – GST – whether motel 'residential premises' within the meaning of s 195-1 of A New Tax System (Goods and Services Tax) Act 1999 – whether property 'new residential premises' within meaning of s 40-75. Judiciary Act 1903 (Cth) s 39B(1A)(c) Federal Court of Australia Act 1975 (Cth) s 21 A New Tax System (Goods and Services Tax) Act 1999 (Cth) AAT Case 10,476 (1995) 31 ATR 1264 referred to Gibb v Commissioner of Taxation (1966) 118 CLR 628 referred to Urdd Gobaith Cymru v Commissioner of Customs and Excise [1997] V & DR 273 cited Macquarie Dictionary (3rd ed) Shorter Oxford English Dictionary MARANA HOLDINGS PTY LIMITED AND CAMARO NO. 1 PTY LIMITED V COMMISSIONER OF TAXATION N 1668 OF 2003 BEAUMONT J 15 MARCH 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1668 OF 2003

BETWEEN: MARANA HOLDINGS PTY LIMITED AND CAMARO NO. 1 PTY LIMITED

APPLICANTS

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: BEAUMONT J

DATE OF ORDER: 15 MARCH 2004

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The application be dismissed, with costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1668 OF 2003

BETWEEN: MARANA HOLDINGS PTY LIMITED AND CAMARO NO. 1 PTY LIMITED

APPLICANTS

AND: COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: BEAUMONT J

DATE: 15 MARCH 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT

BEAUMONT J:

Introduction 1 The applicants seek declaratory orders (relying upon s 39B(1A)(c) of the Judiciary Act 1903 (Cth) and s 21 of the Federal Court of Australia Act 1975 (Cth)) that the sale of certain real property is 'input taxed' within the meaning of s 40-65 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) ('the GST Act'). Section 9-30(2) of the GST Act provides that a supply is 'input taxed' if it is input taxed under, inter alia, Division 40. The applicants seek relief for the reason that they would obtain no input tax credits included in the price of building materials and services acquired in relation to the acquisition or renovation to be described below. 2 Subdivision 40-C of the GST Act deals with residential premises, relevantly as follows: 3 Subject to a qualification to be mentioned later, s 40-65(1) deals with sales of residential premises by providing: '(1) A sale of real property is input taxed, but only to the extent that the property is residential premises to be used predominantly for residential accommodation.' (Emphasis added.) 4 'Residential premises' are defined by s 195-1 to mean – 'land or a building that: (a) is occupied as a residence; or (b) is intended to be occupied, and is capable of being occupied, as a residence.' (Emphasis added.) 5 As mentioned, s 40-65(1) is qualified by s 40-65(2), which provides: '(2) However, the sale is not input taxed to the extent that the residential premises are: (a) commercial residential premises; [the Commissioner does not contend that this applied here] or (b) new residential premises other than those used for residential accommodation before 2 December 1998.' (The Commissioner does contend that this provision applies here.) 6 'Commercial residential premises' are defined by s 195-1 to mean, inter alia, a 'motel' ((a)). 7 'New residential premises' are defined by s 40-75(1) as follows: '(1) Residential premises are new residential premises if they: (a) have not previously been sold as residential premises ... ; or (b) have been created through substantial renovations of a building; ... .' (The Commissioner does not, however, rely upon this provision here.)