Private ruling: GST and supply of real property
Published: April 2015

Ruling: Q1: Will you make a creditable acquisition under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) in relation to the purchase of the vacant land located in Australia (the Property)? | A1: No

Relevant facts and circumstances: • You are registered for goods and services tax (GST). • The registered owner of the Property (the Vendor) granted you an option to purchase the Property. • The Vendor and you have entered into a call option agreement. • The Vendor has applied to the Tax Office for a private ruling on whether the supply of the interest in the Property to you is a taxable supply under the GST Act. • Earlier, the Tax Office issued a private ruling to the Vendor and ruled that the supply of the Property to you will not be a taxable supply under section GST 9-5 of the GST Act.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Subsection 7-1(2) | Section 11-5

Reasons for decision: Summary: Under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), an entity makes a creditable acquisition when all of the requirements in the section are met. One of the requirements is that the supply to the recipient is a taxable supply The Tax Office issued a private ruling to the Vendor and ruled that the supply of the Property to you will not be a taxable supply under section 9-5 of the GST Act. Therefore, you will not make a creditable acquisition of the Property. Section 7-1 of the GST Act provides that entitlements to an input tax credit arise on creditable acquisition. It follows that you are not entitled to any input tax credit on the acquisition of the Property.