Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16

HIGH COURT OF AUSTRALIA

FRENCH CJ, CRENNAN, KIEFEL, GAGELER AND KEANE JJ

COMMISSIONER OF TAXATION APPLICANT

AND

UNIT TREND SERVICES PTY LTD RESPONDENT

Commissioner of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16 1 May 2013 B61/2012

ORDER

1. Special leave to appeal granted.

2. Appeal allowed.

3. Set aside orders 2, 7 and 8 of the orders of the Full Court of the Federal Court of Australia made on 5 October 2012 and, in their place, order that:

the issue of remission of penalty in relation to the declaration pursuant to s 165-40 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) be remitted to the Administrative Appeals Tribunal for further consideration;

Unit Trend Services Pty Ltd pay the Commissioner of Taxation's costs of, and incidental to, the appeal and cross-appeal in the Full Court; and

any monies paid into the Federal Court by Unit Trend Services Pty Ltd as security for costs be paid out of court to the Commissioner of Taxation together with accretions, if any.

4. Unit Trend Services Pty Ltd pay to the Commissioner of Taxation his costs of, and incidental to, the appeal.

On appeal from the Federal Court of Australia

Representation

B D O'Donnell QC with S R Lumb for the applicant (instructed by McInnes Wilson Lawyers)

F L Harrison QC with P G Bickford for the respondent (instructed by MS & Cliff Lawyers Pty Ltd)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Commissioner of Taxation v Unit Trend Services Pty Ltd

Taxation – GST – Application of margin scheme – Anti-avoidance – Respondent representative member of GST group of companies – Where margin scheme applied to supply of units in property development – Where respondent engaged in "scheme" and obtained "GST benefit" – Whether s 165-5(1) of A New Tax System (Goods and Services Tax) Act 1999 (Cth) engaged – Whether GST benefit "not attributable to" making by respondent of choice, election, application or agreement expressly provided for by the GST law.