Private ruling: GST and going concern
Published: November 2014

Ruling: Q1: Is the supply of the premises a GST-free supply of a going concern for the purpose of section 38-325 of the A New Tax System (Goods and Services Tax) Act 1999 ? | A1: Yes. Your supply of the premises will be a GST-free supply of a going concern under section 38-325 of the GST Act. This is because, on settlement date, you will be providing the purchaser all of things that are necessary for the continued operation of a leasing enterprise, being property and the lease agreement. In addition, you will continue to carry on the leasing enterprise until the day of the supply. Finally, there is a clause in the Contract of Sale indicating that you and the purchaser have agreed in writing that the sale is a supply of a going concern, the sale will be for consideration and the purchaser is registered for GST.

Relevant facts and circumstances: You are registered for GST. You acquired the premises subject to a lease. The premises are land that is secured with a cyclone fence and a locked gate. You have continued to lease the premises. You entered into a Contract of Sale with the purchaser to sell the premises subject to the lease. You have provided a copy of the Contract of Sale including the lease, containing the assignment of lease rights, and clauses that the parties agree that this contract is for the supply of a going concern, the Purchaser is registered for GST and the Vendor will carry on the going concern until the date of supply.

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 9-80, and | A New Tax System (Goods and Services Tax) Act 1999 Section 38-325.