Private ruling: GST and registration requirements
Date of advice: 14 June 2017
Published: October 2017

Ruling: Q1: Are you required to register for goods and services tax (GST) to report and pay the GST for the sale of vacant land? | A1: No, from the information provided, you are not currently registered for GST and it is our view that the activities carried out in regard to the sale of the vacant land are not part of you carrying on of your farming or property development enterprise. The requirements of paragraph 9-5(b) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are not satisfied. The second part of paragraph 9-5(d) of the GST Act, considers if you are required to be registered. Section 23-5 of the GST Act provides that you are required to be registered if: ● You are carrying on an enterprise, and ● Your GST turnover meets the registration turnover threshold. You are required to be registered where both the above requirements are met. In your case you do not satisfy the first requirement. It is therefore not necessary to consider the second requirement. Accordingly, you are not required to be registered. As you do not satisfy all of the requirements of section 9-5 of the GST Act, you did not make a taxable supply when you sell the vacant land. Therefore, GST is not payable on the sale of vacant land.

Relevant facts and circumstances: ● You are a partnership and not currently registered for GST. ● Prior to 2000, you acquired xx acres of land ● On 1 July 2000 you were required to register for GST and obtained an ABN to carry on a farming enterprise. ● In 200X, due to ill health and age you wound down your farming enterprise and as a result your GST turnover fell below the registration threshold. ● You chose to cancel your GST registration due to the reduced planting activities resulting in the reduced income. ● You are not carrying on any other enterprise on this land. ● Recently you received an expression of interest from a land Developer, to subdivide the xx acres of land allowing you to retain some land with a residential house. ● The land developer made you an offer to purchase the whole of the xx acres of land less an area to be retained by you under a call option Deed to secure a price of $xx until. The call fee is below the GST registration threshold. ● You intend to retire and do not intend to carry on any enterprise in the next 12 months.

Relevant legislative provisions: Section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 | Section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 | Section 188-25 of the A New Tax System (Goods and Services Tax) Act 1999