Private ruling: GST - taxable supply
Date of advice: 25 February 2026
Published: 20 April 2026
Ruling period: ddmmyyyy to ddmmyyyy
Date scheme commenced: ddmmyyyy

Ruling: Q1: Were you, XX making a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sold the property located at Lot # and Lot #, address of the property ( Lot # and Lot # )? | A1: No, you were not making a taxable supply pursuant to section 9-5 of the GST Act when you sold Lot # and Lot # as the requirement specified in paragraph 9-5(b) of the GST Act was not met. That is, the Commissioner considers the sale was not made in the course or furtherance of an enterprise that you were carrying on. Accordingly, GST was not payable on the 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 9-40 | A New Tax System (Goods and Services Tax) Act 1999 Division 38 | A New Tax System (Goods and Services Tax) Act 1999 Division 40 | A New Tax System (Goods and Services Tax) Act 1999 Division 195-1


The below 2 questions for the private ruling - as discussed between RSM and ATO on ddmmyyyy, question 2 will be addressed separately in another private ruling. This original ruling will cover question 1 only. | Question 1: Were you, XX, making a taxable supply pursuant to section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you sold the property located at Lot # and Lot #, address of property ( Lot # and Lot # )? | Question 2: If the answer to question 1 is 'no', are you entitled to a refund of the excess GST under Division 142 of the GST Act, when you have treated the sale of Lot # as a taxable supply? | Table 1: Documents provided for this ruling | Contract of Sale of Land dated ddmmyyyy for Lot #, address of the property and other related documents | Taxation Kit dated ddmmyyyy enclosing | Contract of Sale of Land dated ddmmyyyy or Lot #, address of property and other related documents | Contract of Sale of Land dated ddmmyyyy for Lot #, address of property and other related documents | GST Withholding Notice signed on ddmmyyyy for Lot #, address | Agreement for application of margin scheme entered into on ddmmyyyy | for property known as Lot # address of property | Emails dated ddmmyyyy and ddmmyyyy between tax agent and solicitors and attached document | Letter dated ddmmyyyy from real estate agent confirming their appraisal of Lot # and Lot #, of property, and basis for the market estimates of value. | Examples of tax consequences on sales of land including small-scale land subdivision extracted from the ATO website | You (name of taxpayer) are a partnership entity, and your partners are XX and XX ( Partners ). On ddmmyyyy, you applied for an ABN and GST registration. You were issued ABN: #. Both the ABN and GST registration took effect from ddmmyyyy. | On ddmmyyyy, you cancelled both your ABN and GST registration. | You purchased address of property ( the Property ) on ddmmyyyy, together with # contiguous titles. | The Property consisted of # hectares, which included a residential premises and fencing. The residential premises (Lot #) was used by the Partners as their principal place of residence since it was purchased. The Property was not purchased with the intention of resale at a profit. Its proximity to name of suburb and the fact that it had # hectares of natural bush meant that it was a lifestyle property, albeit with long term capital growth potential. | A small-scale sheep enterprise was conducted on the Property from yyyy to yyyy. The sheep enterprise was conducted by name of entity. The ABN was # and the GST registration was cancelled effective from ddmmyyyy. The sheep enterprise was conducted by this entity across the whole of the Property. | In yyyy, you were struggling to maintain the Property due to the age of your partners and decided to subdivide and sell on a non-contingent basis. | On ddmmyyyy, you engaged a licenced surveyor to apply for the permit and change the area of the titles to facilitate the subdivision. | You obtained the planning permit together with a Plan of Subdivision from the Council ( the Council ) on ddmmyyyy resulting in # lots: Lot # to Lot #. The Lot sizes are specified on the table below: | Lot # and Lot # are vacant lots. Lot # contains the existing residential premises. Lot # is a common title to allow separate access for Lot # and Lot #. | The following works completed on the Property were limited to what was required by the Council: | • A power pit was installed for Lot # and Lot # on the boundary fence, which required a #-# metre extension from the existing power pit on Lot #. | • To save significant costs on new kangaroo proof fencing, the Lot boundaries were moved to align with the existing fencing. | • Approximately # metres of new fencing were installed on part of the boundary between Lot # and Lot #; and Lot # and Lot #. No fences were realigned, and no gateways or culverts were installed. | • The purchase of # new water meters for Lot # and Lot #. However, as connection was refused by the water authority. You returned the water meters, and the cost was fully refunded. | • No road construction occurred. | • No crossovers were built for either Lot # or Lot #. | • No sewerage or gas connections were provided to any Lot. | • No drainage expenditure was incurred. | • No building was constructed or demolished. | The subdivision was completed on ddmmyyyy when the # new titles were simultaneously issued. | You engaged a real estate agent ( Real Estate Agent ) to market the Lots on ddmmyyyy. | Prior to the sale of the Lots, you were advised by tax agent ( XYZ ) that GST did not apply to the sale, and you were not required to register for GST. You were advised that the sale of Lot # and Lot # would be a capital gains tax event. | In mmyyyy, your Real Estate Agent appraised and publicly listed the sale of Lot # online for $#. Lot # was appraised at $#. | Negotiations for Lot # and Lot # were based on the sale not being subject to GST. | You entered into a Contract of Sale of Land with the purchaser ( Purchaser ) on ddmmyyyy for the sale of Lot # on Plan of Subdivision No. # being the whole of the land contained in Certificate of Title Volume # and Folio # known as Lot #, address of property, for $# ( Sale Contract ). | The Particulars of Sale in the Sale Contract shows the GST clause as follows. | GST (general condition 19) | Subject to general condition 19.2, the price includes GST (if any), unless the next box is checked. | GST (if any) must be paid in addition to the price if the box is checked | This sale is a sale of land on which a 'farming business' is carried on which the parties consider meets the requirements of section 38-480 of the GST Act if the box is checked | This sale is a sale of a 'going concern' if the box is checked | The margin scheme will be used to calculate GST if the box is checked | The reason that the Sale Contract was silent on GST withholding was because you simply did not believe that the sale was a taxable supply at the time of signing the Sale Contract. | In mmyyyy, you met with your legal advisor -solicitors, who advised you to register for GST. You then instructed your tax agent to apply for GST registration which was approved on ddmmyyyy to take effect from ddmmyyyy. You did not increase/adjust the sale price of Lot # subsequent to your GST registration. | On ddmmyyyy, your tax agent XYZ emailed solicitors in relation to the sale of the lots. The emails include: | "... GST - Whether the sale of Lot # constitutes a taxable supply is currently contentious. It may need a Private Ruling from the ATO to clarify. Nevertheless, I have advised our mutual clients to register for GST. I attach the ABN for your reference. The notice refers to House Construction which we will endeavour to change. We will now arrange the GST registration. | As the property was acquired before ddmmyyyy, our clients will be using the margin scheme. This will require written agreement from the Purchaser on or before settlement. On that basis the Purchaser should retain and remit 7% of the contract price to the ATO." | On ddmmyyyy, a day prior to the settlement date, you gave a separate written document 'GST Withholding Notice' to the Purchaser of Lot # with details including that the Purchaser is required to withhold an amount of $# for GST to pay to the Commissioner of Taxation pursuant to section 14-250 of Schedule 1 to the Taxation Administration Act 1953 (Cth). | On ddmmyyyy, a day prior to the settlement date, you entered into an agreement with the Purchaser to apply the margin scheme to the supply of Lot #. | An amount of $# was withheld at settlement and remitted by the Purchaser to the ATO on the ddmmyyyy. The amount $# was calculated at 7% of the sale price $# to reflect the calculation based on the margin scheme. | On ddmmyyyy, you lodged your business activity statement ( BAS ) for the quarterly period ended ddmmyyyy, reporting the sales of $# for Lot # together with capital acquisitions of $# and non-capital acquisitions of $#. The reporting resulted in a liability of $# with $# withholding credit being applied to offset the liability. You paid the balance owing of $# on ddmmyyyy. | You considered using the margin scheme was inconsistent because you had erroneously taken the Property as being purchased prior to ddmmyyyy (instead of yyyy). In addition, you were uncertain whether you had agreed to use the margin scheme at the time of your purchase . You rectified the inconsistency upon lodgement of the BAS which reported $# as the GST component for the sale worked out as 1/11 th of $#. | Lot # was sold for $#. The contract for the sale was entered into on ddmmyyyy, and settlement occurred on ddmmyyyy. The sale occurred whilst you were registered for GST and the contract provided for the margin scheme to be used. GST withholding of $# was remitted to the ATO. | Lot # was sold for $# and settled on ddmmyyyy. This property was sold without GST as it was treated as an input taxed supply of residential premises. | In this ruling, you are requesting the Commissioner's discretion to refund excess GST remitted, in accordance with Division 142 of the GST Act and GSTR 2015/1. Your request is only in relation to the sale of Lot # that was reported in the quarterly tax period ending ddmmyyyy and you provided the following reasons for your request: | You and the Purchaser signed the unconditional Sale Contract for the sale of Lot # on ddmmyyyy. At that time, you were advised that the sale was not a taxable supply under the GST Act. After receiving advice from your lawyer in mmyyyy, you registered for GST. When you settled the sale of Lot # on ddmmyyyy, you treated the sale as a taxable supply under the GST Act, without any adjustment to the sale price. However, upon further review, you consider it has become evident that the GST treatment applied to the sale was incorrect because you were not required to be registered for GST and the sale of the vacant land was not a taxable supply. | GST was not passed on to the purchaser however it was remitted to the ATO. You have not reimbursed the purchaser (name) . From your research the purchaser was never jointly registered for GST and in your opinion were the eventual private consumers.