Private ruling: GST and going concern
Date of advice: 7 June 2016
Published: July 2016

Ruling: Q1: Is the sale of the business a GST-free supply of a going concern under section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: Yes. Based on the information provided, the sale of the business is a GST-free supply of a going concern under section 38-325 of the GST Act. This is because, under the arrangement, the supply is made for consideration, the recipient is registered for GST and both the supplier and recipient have agreed in writing that the supply is of a going concern. Further, the supplier has supplied everything that is necessary for the continued operation of the enterprise, including: the vehicle, plant and equipment and stock. The supplier has also surrendered the necessary permit in favour of the recipient and transferred leases of equipment necessary for continued operation to the recipient

Relevant facts and circumstances: • The supplier is a partnership that operates a van business from a public carpark. The supplier is registered for GST. • The supplier entered into an agreement to sell the business to the recipient. The recipient is registered for GST. • The supplier and the recipient agreed to the gross purchase price which comprised goodwill, plant and equipment, and stock. • Per agreement, leased assets have been transferred to the recipient. • The permit has been surrendered by the supplier and issued in recipient's name. • The supplier agreed to provide assistance to the recipient for 10 working days following handover. • The supplier and the recipient agreed in writing that the sale of the business is a supply of a going concern and that the supplier will supply to the recipient all of the things necessary for the continued operation and will carry on the enterprise until the day of the supply; • The recipient resumed operation the next business day.

Relevant legislative provisions: Section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999