Private ruling: GST free supplies
Date of advice: 28 May 2026
Published: 17 August 2026
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: XX May 20XX

Ruling: Q1: Is the seller making a GST-free supply of a going concern to the purchaser, under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 , when it sells the property together with the lease for the property? | A1: Yes.

Relevant facts and circumstances: You are registered for GST. You own a property situated within Australia (Property). You have a current lease (Lease) to your tenant (Tenant). The Lease is current and continues beyond the settlement date. You entered into a Contract of Sale of the Property (Sales Contract) with the purchaser (Purchaser). The Sales Contract includes Landlords' Chattels to be included. There is an Annexure to the Sales Contract that states: - • that both parties agree that the sale of the Property is a Going Concern • that the seller will carry on and conduct the enterprise as a going concern until the settlement date • that the seller provides all things required for the continued operation of the enterprise • that the buyer will be registered for GST at the time of settlement The definition of 'lease' in the current lease allows for supplement, amendment or variation of the lease. The Lease will be assigned from you to the Purchaser through a 'Deed of Assignment and Acknowledgement of Lease' that will take effect simultaneously with the settlement of the Property. As the lease will continue to be relevant during the settlement period, you will continue to carry on the leasing enterprise until the settlement date.

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 38-325 | A New Tax System (Goods and Services Tax) Act 1999 section 195-1

Reasons for decision: Summary: All legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 unless otherwise noted. GST is payable on a taxable supply under section 9-5 if the transaction satisfies all the requirements under paragraphs 9-5(a) to 9-5(d) as follows: a) You make the supply of the Property for the consideration. b) The supply is made in the course or furtherance of your enterprise of leasing. Which includes activities done in termination of the enterprise through a contract of sale. c) The supply is connected with Australia as you carry on an enterprise within Australia. d) You are registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. | Detailed Reasoning - Going concern: Section 38-325 provides that, if certain conditions are satisfied, a supply of a going concern is GST-free. This means that, in the case of a supply which would otherwise be a taxable supply, or an input taxed supply, the supply is a GST-free supply if it is supplied under an arrangement for the supply to be a going concern. Section 38-325 states: (1) The supply of a going concern is GST-free if: (a) the supply is for consideration; and (b) the *recipient is registered or required to be registered; and (c) the supplier and the recipient have agreed in writing that the supply is of a going concern. (2) A supply of a going concern is a supply under an arrangement under which: (a) the supplier supplies to the recipient all of the things necessary for the continued operation of an enterprise; and (b) the supplier carries on, or will carry on, the enterprise until the day of the supply (whether or not as part of a larger enterprise being carried on by the supplier) The condition at paragraph 38-325(1)(a) is satisfied as you make the supply for consideration. The condition at paragraph 38-325(1)(b) is satisfied as the purchaser is currently registered for GST and will be at the time of settlement. The condition at paragraph 38-325(1)(c) is satisfied as the seller and buyer agree in writing that the supply is of a going concern. The supply must be a 'supply of a going concern' as defined under subsection 38-325(2). Paragraph 20 of Goods and Services Tax Ruling GSTR 2002/5 Goods and services tax: when is a 'supply of a going concern' GST-free? (GSTR 2002/5) provides that an arrangement between a supplier and a recipient for the supply of a going concern does not limit itself merely by the description each party has given themselves in the agreement but by objectively examining the transactions that are made between the parties. Therefore, subsection 38-325(2) is required to be satisfied and subsection 38-325(1)(c) cannot exclusively be relied on. | Detailed Reasoning - Enterprise: Subsection 38-325(2) requires the conditions to be satisfied in relation to an 'identified enterprise'. The relevant enterprise is determined before establishing if all things are supplied by the supplier to the recipient to continue that enterprise. Paragraph 22 of GSTR 2002/5 states: The term 'enterprise' is defined in section 9-20 as an activity, or series of activities, done: • in the form of a business; or • in the form of an adventure or concern in the nature of trade; or • on a regular or continuous basis, in the form of a lease, licence, or other grant of an interest in property; or ... From the information provided, you conduct an active enterprise through the current lease to the tenant. | Detailed Reasoning - All things necessary: What needs to be determined is whether you are suppling all the things necessary for the continued operation of this enterprise. Paragraphs 72 and 73 of GSTR 2002/5 explain that the term 'necessary' incorporates every attribute of an enterprise that is essential for the continued operation of the identified enterprise. What is necessary for the continued operation of an enterprise will depend on the nature of the enterprise carried on and the core attributes of that enterprise. A thing is necessary for the continued operation of an enterprise if the enterprise could not be operated by the purchaser in the absence of the thing. Further, paragraphs 74 and 75 of GSTR 2002/5 state: 74. The supplier is required to supply to the recipient all of the things that are necessary to carry on the 'identified enterprise' so that the recipient is put in a position to carry on the enterprise if it chooses. 75. Two elements are essential for the continued operation of an enterprise: • the assets necessary for the continued operation of the enterprise including, where appropriate, premises, plant and equipment, stock-in-trade and intangible assets such as goodwill, contracts, licences and quotas; and • the operating structure and process of the enterprise consisting of the commercial or economic activity relevant to the type of enterprise being conducted, for example, ongoing advertising and promotion. Clause 2(c) of the GST Annexure in the Sales Contract states that you will supply at settlement all the things required for the continued operation of the enterprise as a going concern. As the Lease is being assigned to the Purchaser at the time of settlement for the Property, you will be supplying all the things that are necessary for the continued operation of the leasing enterprise and thus satisfying subsection 38-325(2)(a) of supplying all things necessary to continue the leasing enterprise. | Detailed Reasoning - Supplier to carry on the enterprise: Paragraph 141 of GSTR 2002/5 states: 141. The supply of everything necessary for the continued operation of an enterprise will only be a 'supply of a going concern' where the enterprise is carried on by the supplier until the day of the supply. All of the activities of the enterprise must be active and operating on the day of the supply. The activities must be 'capable of continuing after the transfer to new ownership. Paragraph 161 of the GSTR 2002/5 provides that the day of the supply occurs when the supplier has done everything to satisfy the obligations under the contract or arrangement governing the supply and the recipient has assumed effective control and possession of all of the things that are necessary for the continued operation of the enterprise. It is stated that the supplier will carry on the enterprise until the day of the supply. As such, subsection 38-325(2)(b) is also satisfied. | Detailed Reasoning - Conclusion: As you are making a supply of a going concern as defined in section 38-325 in relation to the sale of the property and business, the supply is GST-free.