Private ruling: Goods and Services Tax
Date of advice: 22 August 2025
Published: 27 October 2025
Ruling period: 1 July 20XX to 22 XX 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are your activities of running a commercial kitchen at a specified address considered to be an enterprise in accordance with section 9-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) from 1 July 20XX? | A1: Yes. | Q2: Are your activities of running a tourist accommodation at the specified address considered to be an enterprise in accordance with section 9-20 of the GST Act from 1 July 20XX? | A2: Yes. | Q3: Are the supplies related to running the commercial kitchen taxable supplies under section 9-5 of the GST Act from 1 July 20XX, if you backdate your GST registration to 1 July 20XX? | A3: Yes. | Q4: Are the supplies of overnight stays at the guesthouse taxable supplies under section 9-5 of the GST Act from 1 July 20XX, if you backdate your GST registration to 1 July 20XX | A4: No.

Relevant facts and circumstances: You have been registered for goods and services tax (GST) as a sole trader from a specified date. In 20XX, you and your spouse purchased a property as joint tenants at a specified address (property). The property is on xx acres of land and includes your family home in which you reside. You are a qualified chef. At the time of the purchase of the property and for several years after, you were employed at xxxx on a full-time basis as the chef manager. Due to your personal circumstances, you ceased your employment at xxxx In 20XX, you sought ways to generate income through new business ventures, related to your chef qualifications, on your property. In 20XX you purchased a transportable commercial kitchen. The commercial kitchen is xx square metres and housed in a prefabricated modular building with a cold and dry storage room. In xxxx 20XX, you applied to the relevant Council for approval to operate a commercial kitchen on the property and to construct a house to provide tourist accommodation (guesthouse) on your property. The planning documents disclosed that the tourist accommodation to be built would be a single dwelling of xx square metres, capable of accommodating one group of x number of people at a time. The planning proposal was approved on a specified date. To run a business from the commercial kitchen it required new flooring, coving, windows, double sink, plumbing, electrical connections, a grease arrestor and a large septic system. These renovations were undertaken and upon completion you were required to pass a new food business inspection. You received approval to operate the commercial kitchen in mid-20XX. The kitchen has an engineered wastewater system that is approved to cater for more than x number of people per day. The commercial kitchen is not open to the general public or the travelling public. You have since used the commercial kitchen to provide off-site catering for x number of people at corporate functions. You have secured bookings for your catering services. You have several events planned that will be conducted through the commercial kitchen on the property. You are also planning to apply for a 'passport' for Council approval which will allow you to cater outside of the property. Construction of the guesthouse was completed in xxxx 20XX. The guesthouse is a single dwelling. It has bedrooms, an open plan kitchen, living and dining area, an outdoor deck and car parking space. The first guests arrived at the guesthouse in xxxx 20XX. You are responsible for all management of guest stays at the guesthouse. Anyone staying at the guesthouse has the status of a guest. The guests will not live in the guesthouse and have a residence elsewhere. The rate charge is worked on a formula of length of stay x the daily rate. Features of the guesthouse available to guests include: • Linen and blankets. • Bathroom stocked with premium brand soaps and salts. • Daily cleaning and rubbish collection. • Coffee machine and in room bar selection. You have a liquor licence. • Daily breakfast, prepared in the commercial kitchen, included for all guests. Guests do not have an option to opt out of the breakfast for a reduced price. • Ability to pre-order additional meals from the commercial kitchen with a menu available. You estimate around X% of guests use this option. • 24 hours on call for top ups of amenities and any assistance required. • Concierge services to organise activities in the area. You trade under a specific business name. You promote the guesthouse and your catering services on your website. You also advertise the accommodation on a number of tourist information websites. You manage the bookings through all portals through Lodgify. You have allocated about x acres of the property to the business which is available to the guest.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999, section 9-5 | A New Tax System (Goods and Services Tax) Act 1999, section 9-20 | A New Tax System (Goods and Services Tax) Act 1999, section 11-5 | A New Tax System (Goods and Services Tax) Act 1999, section 11-15 | A New Tax System (Goods and Services Tax) Act 1999, section 11-20 | A New Tax System (Goods and Services Tax) Act 1999, section 11-25 | A New Tax System (Goods and Services Tax) Act 1999, section 38-2 | A New Tax System (Goods and Services Tax) Act 1999, section 38-3 | A New Tax System (Goods and Services Tax) Act 1999, section 40-35 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1 Question 1 | Are your activities of running a commercial kitchen at the property, considered to be an enterprise in accordance with section 9-20 of the GST Act, from 1 July 20XX? Summary | Your activities of running the commercial kitchen constitute an enterprise under paragraph 9-20(1)(a) of the GST Act as they are done in the form of a business. We consider that as at 1 July 20XX, you had commenced this enterprise as you had taken the preparatory steps necessary to commence such an enterprise. | Detailed reasoning | The definition of enterprise is found in section 9-20 of the GST Act. Subsection 9-20(1) of the GST Act relevantly states: An enterprise is an activity, or series of activities, done: | (a) in the form of a *business; or | (b) in the form of an adventure or concern in the nature of trade; or | (* Denotes a term defined in the GST Act.) Thus, the question to be determined is whether the running of the commercial kitchen is either: | • an activity, or series of activities, done in the form of a business; or | • an activity, or series of activities, done in the form of an adventure or concern in the nature of trade. | Miscellaneous Taxation Ruling MT 2006/1 The New Tax System: the meaning of carrying on an enterprise for the purposes of entitlement to an Australian Business Number) (MT 2006/1) provides our view of what is an enterprise. | Paragraphs 170 to 179 of MT 2006/1 consider the meaning of the phrase 'in the form of a business'. Paragraphs 170 to 170B state: | 170. An enterprise includes an activity, or series of activities, done in the form of a business. The phrase 'in the form of a business' is broad and has as its foundation the longstanding concept of a business. The meaning of this phrase has not been considered in significant detail by Australian courts. | 170A. In FCT v. Swansea Services Pty Ltd at paragraph 99, McKerracher J. observed that the words 'in the form of' do not support a suggestion that form alone may prevail over substance. However, he said that they do 'have the effect of extending the reach of 'enterprise' to those activities which are in the form of a business but would not, in the ordinary meaning of 'business' be considered such. But the activity must still be reasonably intended to be profit making in the case of an individual and cannot for any entity simply be a private recreational pursuit or hobby.' | 170B. The definition clearly includes a business and the use of the phrase 'in the form of' indicates a wider meaning than the word 'business' on its own. In the case of non-profit entities, the Commissioner considers that not all of the main features of a business such as a capacity to earn and distribute profits need to be present before an activity has the form of a business. | Section 195-1 of the GST Act states that the definition of 'carrying on an enterprise' includes activities done in the commencement or termination of the enterprise. | MT 2006/1 also explains that the time at which an enterprise can commence is when an entity takes preparatory steps such as feasibility studies. At paragraphs 129 to 131 it states: | 129. In the context of registering for overseas Value Added Tax regimes, a number of cases have considered the broad issue of commencement activities. These have, of course, been decided in the context of their own particular legislative regimes. In Intercommunale voor Zeewaterontzilting (Inzo), in liquidation v. Belgian State the taxpayer undertook a feasibility study taking several years into the conversion of salt or brackish water into fresh drinking water. Even though the study showed the activity would be unprofitable (and the project did not proceed) the court held that the taxpayer was entitled to input tax credits. | 130. In Merseyside Cable Vision Ltd v. Commissioners of Customs and Excise a cable television company was entitled to input tax credits during the preparatory stages of a business which included a feasibility study. The company's objective intention was always to operate a cable television service. The credits were allowed even though the company had not obtained a licence at the time of the hearing. It was held, having regard to all of the relevant circumstances, that it did not matter that it was not absolutely certain that the taxpayer would be able to operate a cable television. | 131. In the Australian context, similar facts to these two cases would likely lead to a similar conclusion, that an enterprise had commenced. | Your activities of the running of the commercial kitchen constitute an enterprise. Further, your activities of running the commercial kitchen constitute a business and thus meet the extended definition of 'in the form of a business' within paragraph 9-20(1)(a) of the GST Act. The business nature of your activities is evidenced by the intention to make profit, reliance on the activities to provide you income, capital expenditure incurred renovating the kitchen and the time resources committed to management of the activities. We consider that as at 1 July 20XX, you had commenced this enterprise as you had submitted the development plans for approval with the relevant Council which constituted you taking the preparatory steps necessary to commence such an enterprise. | Question 2 | Are your activities of running a tourist accommodation at the property considered to be an enterprise in accordance with section 9-20 of the GST Act from 1 July 20XX? Summary | Your activities of running the tourist accommodation constitute an enterprise under paragraph 9-20(1)(c) of the GST Act, as they are done on regular or continuous basis in the form of a lease or licence of the property. We consider that as at 1 July 20XX, you had commenced this enterprise as you had taken the preparatory steps necessary to commence such an enterprise. | Detailed Reasoning | The definition of enterprise in subsection 9-20(1) of the GST Act relevantly includes, an activity, or series of activities, done: (c) on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. | Paragraph 5 of MT 2006/1 specifically states that the ruling does not consider the meaning of 'lease, licence or other grant of property'. However, paragraphs 303 to 305 of MT 2006/1 offer some commentary on the terms: | 303. Paragraph 9-20(1)(c) of the GST Act includes in the definition of an 'enterprise', 'an activity, or a series of activities, done on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property'. The paragraph does not cover trading in the assets but rather the activity of a lessor or grantor of the interest in the property. | 304. The term 'property' covers all types of property. It includes tangible assets such as land, cars and boats. It also includes intangible assets such as copyright and patents. | 305. The Commissioner does not believe that, in any practical sense, 'in the form of a lease, licence or other grant of an interest in property' is wider than 'a lease, licence or other grant of an interest in property'. The phrase 'in the form of' does not broaden the meaning of 'lease, licence or other grant of an interest property'. This is because leases and licences are longstanding, well understood legal concepts. In addition the terms 'lease, licence or other grant of an interest in property' encompass all activities that are directed to the exploitation of property rights. | Paragraphs 306 and 306A of MT 2006/1 also give some guidance as to what will be a lease, licence or other grant of an interest in property on a 'regular and continuous basis': | 306. To be an enterprise the grant of a lease, licence or other grant of an interest in property must be done on a regular or continuous basis. The grant need not be done on both a regular and a continuous basis. An activity will be 'continuous' if there is no significant cessation or interruption to the activity. An activity is 'regular' if it is repeated at reasonably proximate intervals. The intervals need not be fixed. Whether an activity is repeated over time on a regular basis is a question of fact and degree. | 306A. In Commissioner of Taxation v. MBI Properties Pty Ltd [2014] HCA 49; 2014 ATC 20-474 (MBI Case) at [37], the High Court noted that in observing and continuing to observe the obligation to provide quiet enjoyment under a lease, a lessor is appropriately regarded as engaging in an activity done on a regular or continuous basis in the form of a lease. The High Court noted further that, whether or not the lessor might also be engaged in some other form of enterprise, it makes a supply of the use and occupation of leased premises in the course of carrying on an enterprise as defined in paragraph 9-20(1)(c) of the GST Act. In this context, consistent with the High Court decision in the MBI Case, the reference to a lessor is not considered to be limited to the entity that grants a lease in the premises, and includes an entity that acquires premises subject to an existing lease. | Your activities of running the tourist accommodation constitute the grant of a lease, licence or other interest in property done on a regular or continuous basis and thus meet the definition of enterprise within paragraph 9-20(1)(c) of the GST Act. This is inherent in the nature of your activities where a stay at the guesthouse grants the guest exploitation of property rights in the guesthouse for the period of their stay, and this offering of property rights to guests is undertaken on a regular and continuous basis. We consider that as at 1 July 20XX, you had commenced this enterprise as you had submitted the development plans for approval with the relevant Council which constituted you taking the preparatory steps necessary to commence such an enterprise. | Question 3 | Are the supplies related to running the commercial kitchen taxable supplies under section 9-5 of the GST Act from 1 July 20XX, if you backdate your GST registration to 1 July 20XX? Summary | The supplies of meals (apart from breakfast which is included in the daily rates) to the guests, and the supply of food under catering arrangements on or off-site are taxable supplies under section 9-5 of the GST Act. If you backdate your GST registration to 1 July 20XX, any such supplies made since 1 July 20XX will become taxable supplies. | Detailed Reasoning | A supply will be subject to GST if it is a taxable supply as defined within section 9-5 of the GST Act. Section 9-5 is extracted below: You make a taxable supply if: | (a) you make the supply for *consideration; and | (b) the supply is made in the course or furtherance of an *enterprise that you *carry on; and | (c) the supply is *connected with the indirect tax zone; and | (d) you are *registered, or *required to be registered. | However, the supply is not a *taxable supply to the extent that it is *GST-free or input taxed. | The supply of the meals meets paragraphs 9-5(a) to (d) of the GST Act as the supply is made for consideration, is made in the furtherance of your enterprise of running the commercial kitchen, is connected with the indirect tax zone as the supply is made within Australia and you are registered for GST. | A supply of food is GST-free under section 38-2 of the GST Act provided that the supply does not come within any of the exclusions listed in section 38-3 of the GST Act. The supply of food under catering arrangements on or off-site and the supply of additional meals to the guests is a supply of food for consumption on the premises from which it is supplied (paragraph 38-3(1)(a) of the GST Act) and as such a taxable under section 9-5 of the GST Act. However, the supply of breakfast to the guests that stay overnight is not a taxable supply as it is an integral part of the input taxed supply of overnight stays in the guesthouse, and therefore input taxed. | Claiming of input tax credits related to running the commercial kitchen | Section 11-20 of the GST Act provides that you are entitled to input tax credits on any creditable acquisitions that you make. | Section 11-25 of the GST Act deals with the amount of the input tax credits that you can claim for a creditable acquisition and states: | The amount of the input tax credit for a *creditable acquisition is an amount equal to the GST payable on the supply of the thing acquired. However, the amount of the input tax credit is reduced if the acquisition is only *partly creditable. | You make a creditable acquisition if you meet all the requirements of section 11-5 of the GST Act, which states: You make a creditable acquisition if: | (a) you acquire anything solely or partly for a *creditable purpose; and | (b) the supply of the thing to you is a *taxable supply; and | (c) you provide, or are liable to provide, *consideration for the supply; and | (d) you are *registered, or *required to be registered. | The definition of the term 'creditable purpose' is found within section 11-15 of the GST Act. The relevant parts of section 11-15 of the GST Act are extracted below: (1) You acquire a thing for a creditable purpose to the extent that you acquire it in carrying on your enterprise. | (2) However, you do not acquire the thing for a creditable purpose to the extent that: | (a) the acquisition relates to making supplies that would be input taxed; or | (b) the acquisition is of a private or domestic nature. | Based on the information provided, we consider that the acquisitions that relate to renovating and running the commercial kitchen are not solely for a creditable purpose. The acquisitions are only partly for a creditable purpose as they relate to: | • taxable supplies - such as the supply of additional meals to the guests and the supply of food under catering arrangements on or off-site | • input tax supplies - such as the supply of breakfast food which is an integral part of the input taxed supply of overnight stays in the guesthouse, and | • any use of the acquisitions for private or domestic purposes. | As the acquisitions relating to the running of the kitchen are only partly for a creditable purpose, they are only partly creditable. You are therefore entitled to a reduced amount of input tax credits. | For further guidance please refer to the following publications: | • Goods and Services Tax Ruling GSTR 2008/1 Goods and services tax: when do you acquire anything or import goods solely or partly for a creditable purpose . | • Goods and Services Tax Ruling GSTR 2001/8 Goods and services tax: Apportioning the consideration for a supply that includes taxable and non-taxable parts - This ruling explains that a supply will be a composite supply when one part of the supply should be regarded as being the dominant part, with the other parts being integral, ancillary or incidental to that dominant part. In such instances, the tax treatment will be as if the whole supply had been the dominant part. | • Goods and Services Tax Ruling GSTR 2006/4 Goods and services tax: determining the extent of creditable purpose for claiming input tax credits and for making adjustments for changes in creditable purpose - This ruling provides guidance on how to determine the extent of creditable purpose to enable you to claim the correct amount of input tax credits. The ruling provides examples of apportionment methods that you may use. You are not limited to the particular methods set out in that ruling. Any method you use to determine apportionment of expenses must be done on a fair and reasonable basis. You must keep records containing particulars of the method used to determine the extent of the creditable purpose. | Question 4 | Are the supplies of overnight stays in the guesthouse taxable supplies under section 9-5 of the GST Act from 1 July 20XX, if you backdate your GST registration to 1 July 20XX? Summary | The supplies of overnight stays in the guesthouse are not taxable supplies under section 9-5 of the GST Act. | The supplies of overnight stays in the guesthouse are input-taxed supplies as they are supplies of residential rent as defined in section 40-35 of the GST Act and not supply of accommodation in commercial residential premises as defined in section 195-1 of the GST Act. As the supplies of the overnight stays are input-taxed supplies, you cannot claim input tax credits for any expenses relating to the development, construction or the running of the guesthouse even if you backdate your GST registration to 1 July 20XX. | Detailed Reasoning | In relation to the supply of overnight stays in the guesthouse, paragraphs 9-5(a) to (d) of the GST Act are met as the supply is made for consideration, is made in the furtherance of your enterprise of running the guesthouse as a bed and breakfast, is connected with the indirect tax zone as the guesthouse is within Australia and you are registered for GST. The supply of overnight stays in the guesthouse is not GST-free. Therefore, what is left to determine is whether the supply of overnight stays in the guesthouse is input taxed. | An instance where the supply would be input taxed is if it is residential rent under section 40-35 of the GST Act. Residential rent | Subsection 40-35(1) of the GST Act provides that a supply of residential premises by way of lease, hire or licence (including a renewal or extension of a lease, hire or licence) is input taxed if: | (a) the supply is of *residential premises (other than a supply of *commercial residential or a supply of accommodation in commercial residential provided to an individual by the entity that owns or controls the commercial residential premises); or | (b) the supply is of *commercial accommodation and Division 87 (which is about long-term accommodation in commercial premises) would apply to the supply but for a choice made by the supplier under section 87-25. | 'Residential premises' is defined in section 195-1 of the GST Act. The definition is extracted below: residential premises means land or a building that: | (a) is occupied as a residence or for residential accommodation; or | (b) is intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation; | (regardless of the term of the occupation or intended occupation) and includes a *floating home. | Goods and Services Tax Ruling GSTR 2012/5 Goods and services tax: residential premises ( GSTR 2012/5) provides our view on the definition of residential premises. Paragraphs 6, 7 and 9 in GSTR 2012/5 state: | 6. Premises, comprising land or a building, are residential premises under paragraph (a) of the definition of residential premises in section 195-1 where the premises are occupied as a residence or for residential accommodation, regardless of the term of occupation. The actual use of the premises as a residence or for residential accommodation is relevant to satisfying this limb of the definition. | 7. Premises, comprising land or a building, are also residential premises under paragraph (b) of the definition of residential premises if the premises are intended to be occupied, and are capable of being occupied, as a residence or for residential accommodation, regardless of the term of the intended occupation. This limb of the definition refers to premises that are designed, built or modified so as to be suitable to be occupied, and capable of being occupied, as a residence or for residential accommodation. This is demonstrated through the physical characteristics of the premises. | ... | 9. The requirement in sections 40-35, 40-65 and 40-70 that premises be 'residential premises to be used predominantly for residential accommodation (regardless of the term of occupation)' is to be interpreted as a single test that looks to the physical characteristics of the property to determine the premises' suitability and capability for residential accommodation. | The guesthouse satisfies the definition of residential premises as it has the requisite physical characteristics that it is suitable and capable of providing residential accommodation, as outlined in paragraphs 9 to 11 of GSTR 2012/5 as being suitable for human habitation. The guesthouse provides shelter and basic living facilities such as a kitchen, bedroom and bathroom. | However, paragraph 40-35(1)(a) of the GST Act will only be satisfied if the supply of the premises is not characterised as a supply of commercial residential premises or supply of accommodation in commercial residential premises. | It is therefore necessary to consider whether the guesthouse is commercial residential premises as defined in the GST Act. Commercial residential premises | 'Commercial residential premises' is relevantly defined in section 195-1 of the GST Act as: Commercial residential premises means: | (a) a hotel, motel, inn, hostel or boarding house, or | [...] | (f) anything similar to *residential premises described in paragraphs (a) to (e). | However, it does not include premises to the extent that they are used to provide accommodation to students in connection with an education institution that is not a school. | Goods and Services Tax Ruling GSTR 2012/6 Goods and services tax: commercial residential premises (GSTR 2012/6) gives our view on the characteristics of commercial residential premises as defined in section 195-1 of the GST Act. Paragraphs 10 and 11 of GSTR 2012/6 provide: 10. Objective factors that are relevant to characterising premises as falling within either paragraph (a) or (f) of the definition include the overall physical character of the premises and how the premises are operated. | ... | 11. The tests to be applied are whether the premises are a hotel, motel, inn, hostel or boarding house for the purposes of paragraph (a), or whether the premises are similar to these types of premises, in the sense that they have a sufficient likeness or resemblance to any of these types of establishments for the purposes of paragraph (f). These tests necessarily raise questions of fact involving matters of impression and degree. | The terms hotel, motel, inn, hostel, and boarding house are not defined in the GST Act and take their ordinary meaning. Paragraph 12 of GSTR 2012/6 lists the common characteristics of operating hotels, motels, inns, hostels and boarding houses. The presence or absence of any of these characteristics is not necessarily determinative in characterising premises as commercial residential premises, and it involves weighing up all factors. Paragraph 12 of GSTR 2012/6 is extracted below: | 12. Common characteristics of operating hotels, motels, inns, hostels and boarding houses that are relevant, though not necessarily determinative, to characterising premises as commercial residential premises are: | • Commercial intention | The premises are operated on a commercial basis or in a business-like manner even if they are operated by a non-profit body. | • Multiple occupancy | The premises have the capacity to provide accommodation to multiple, unrelated guests or residents at once in separate rooms, or in a dormitory. | • Holding out to the public | The premises offer accommodation to the public or a segment of the public. | • Accommodation is the main purpose | Providing accommodation is the main purpose of the premises. | • Central management | The premises have central management to accept reservations, allocate rooms, receive payments and perform or arrange services. This can be provided through facilities on-site or off-site. | • Management offers accommodation in its own right. | The entity operating the premises supplies accommodation in its own right rather than as an agent. | • Provision of, or arrangement for, services | Management provides guests and residents with some services and facilities, or arranges for third parties to provide them. | Paragraph 41 of GSTR 2012/6 provides features that indicate premises are not similar to a hotel, motel, inn, hostel or boarding house. Paragraph 41 is extracted below: | 41. Ultimately, whether premises are commercial residential premises is a matter of overall impression involving the weighing up of all relevant factors. While not an exhaustive list, factors that may indicate that premises are not a hotel, motel, inn, hostel, boarding house or similar premises include: | (a) the operator and occupant agree for accommodation to be supplied for a periodic term (which may be for a period of months or years at a time), such as in a residential lease; | (b) the operator and occupant document the condition of the premises under a written contract before the accommodation is initially supplied and when the occupant ceases to occupy premises; | (c) the operator has the right to impose a cleaning fee on the occupant when the occupant ceases to occupy the premises; | (d) the occupant is permitted, subject to the terms of the lease or licence, to alter the part of the premises occupied by the occupant, such as by attaching hanging devices on a wall; | (e) the occupant is permitted, subject to the terms of the lease or licence, to keep pets in the premises; | (f) the occupant must separately arrange and pay for the connection of a telephone, electricity, or gas service; | (g) the occupant is responsible for the cleaning and minor maintenance of the premises, such as changing light bulbs in their room; | (h) the premises are unfurnished; and | (i) the right to occupy the residential premises is supplied to the occupant in exchange for the occupant loaning an amount to the operator together with other fees. | GSTR 2012/6 also discusses the common law definition of the terms hotel, motel, inn hostel or boarding house as found in the case law. Relevantly, the terms are usually reserved for premises that are available to rent or lease on a multi-occupancy basis, as discussed at paragraphs 156 to 158 of GSTR 2012/6: | 156. Hotels have the capacity to supply accommodation for multiple occupancies. In South Steyne Hotel Pty Ltd v. Federal Commissioner of Taxation (South Steyne), Stone J considered whether a supply of an apartment in a complex was a supply of 'anything similar to' a hotel, motel, inn, hostel or boarding house under paragraph (f) of the definition. Her Honour commented: | The definitions of motels, inns, hostels and boarding houses indicate that, in common with hotels, they provide accommodation, although of varying types. In addition to providing accommodation they also have in common that, large or small, they provide for multiple occupancies. The terms are not used where only one apartment, room or other space is provided. | 157. On appeal to the Full Federal Court, Emmett J noted in South Steyne Hotel Pty Ltd v. Federal Commissioner of Taxation ( South Steyne FFC ): | 28.... The term hotel or motel would not be used, as a matter of ordinary English, where a single apartment, room or other space is supplied. | 29. The fact that the use and occupation by guests of an apartment in the Sebel Hotel may be similar to the use and occupation by guests of a room in a hotel or motel does not make an individual apartment similar to a hotel or motel. It might be appropriate to describe an individual apartment as being similar to part of a hotel, namely a hotel room. It is not an ordinary use of English to describe a single or individual apartment as being similar to a hotel or motel. | 158. Edmonds J also indicated agreement with Stone J's conclusion on the relevant issue 'generally for the reasons she has given'. His Honour referred to and did not cast any doubt over Stone J's comments regarding the commonality between hotels, motels, inns, hostels and boarding houses being to provide for 'multiple occupancies'. | Application to your circumstances | You operate the guesthouse on a commercial basis. Your main purpose is to provide accommodation. You offer accommodation in your own right (not as an agent) and arrange certain services, such as cleaning, as well as providing bedding, linen and blankets. You can also provide other services for an additional charge. Additional meals and refreshments are available to order from the commercial kitchen. The guests can contact you at any time for top ups of amenities and any other assistance required. Occupants have the status of guests and will have a residence in which they live somewhere else. | The guesthouse does not allow for multiple occupancy; only one group of x number of people can book the accommodation for overnight stays in the guesthouse at a time. | As stated in paragraph 41 of GSTR 2012/6, whether the premises are commercial residential premises is a matter of overall impression involving the weighing up of all relevant factors. While the operation of your enterprise has several features in common with the operation of commercial residential premises, we note that these are not necessarily determinative in characterising the premises. In particular, the guesthouse does not allow for multiple occupancy. As discussed in paragraphs 156 to 158 of GSTR 2012/6, the case law considers this to be a strong indicator whether the premises can be defined as a hotel, motel, inn, hostel, boarding house or as premises that are similar to such commercial residential premises. | Therefore, after weighing up all the factors, our view is that the guesthouse does not meet the definition of 'commercial residential premises' as defined within section 195-1 of the GST Act. As such, the supply of overnight stays in the guesthouse is an input taxed supply of residential rent as defined within section 40-35 of the GST Act. | As the supply of overnight stays in the guesthouse is input taxed, the supply of the accommodation is not a taxable supply under section 9-5 of the GST Act. | Accordingly, things acquired in relation to the development and construction of the guesthouse or in the course of running your guesthouse enterprise are not acquired for a creditable purpose as they relate to the making of supplies that are input taxed. Thus, the acquisitions are not creditable acquisitions under section 11-5 of the GST Act and therefore, you are not entitled to input tax credits under section 11-20 of the GST Act.