Private ruling: GST and creditable acquisitions
Date of advice: 3 August 2021
Published: October 2021

Ruling: Q1: Are you making a creditable acquisition under section 11-5 of A New Tax System (Goods and Services Tax) Act 1999 (GST Act) for your acquisition of freehold interests in a property and business interests of the accommodation business conducted on the property? | A1: No, the acquisition is not a creditable acquisition under section 11-5 of the GST Act. The supply to you as per the contract of sale of land is that of a going concern that has been treated as GST-free by the parties.

Relevant facts and circumstances: You are registered for GST. On XX XXXX XX, Entity A entered into a Contract of sale of land (Contract) for the purchase of the freehold interests in a property and the business interests which comprised an accommodation business operated from the property. The consideration for the sale per the Contract is $XX By way of a sale of real estate nomination form dated XX, you were nominated as the substituted purchaser to take a transfer or conveyance in lieu of the purchaser in respect of the sale. At the time of the sale the property included: • xxxxx • xxxxx • xxxxx • xxxxx • xxxxx. Under the Contract, the parties agree that the sale is the sale of a going concern. The relevant box in the Contract has been ticked. The sale settled on XX XXXX XX.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 11-15

Reasons for decision: Summary: Section 11-5 of the GST Act provides that you make a creditable acquisition if: • you acquire anything solely or partly for a creditable purpose; and • the supply of the thing to you is a taxable supply; and • you provide, or are liable to provide, consideration for the supply; and • you are registered or required to be registered. Under the Contract, both the vendor and the purchaser have agreed in writing that the supply of Xxxx Xxxx Xxxx is a supply of a going concern and have treated it as a GST-free supply of a going concern. As such, the acquisition of the freehold interests and the business interests in the property will not be as a result of a taxable supply to you by the vendor and hence the acquisition does not meet the requirements of section 11-5 of the GST Act. Therefore, the acquisition by you is not a creditable acquisition.