Question 1 – Allowable Deductions
The main question is on the aforementioned case has depicted whether the allowable deductions needs to be permitted for relocation of machinery to a new site.
- “Section 8-1 of the ITAA 1997”
- “British Insulated & Helsby Cables”
- “Taxation ruling of TD 92/126”
Based on the aforementioned rulings it has been determined that the taxpayer cannot be held for allowable deductions as this has taken place based on their income assessable. Under the rulings of “Section 8-1 of the ITAA”, relocating any machinery or asset is an activity which results in an increased asset cost. Henceforth, as per the present condition that expenses incurred for moving machinery cannot be considered for allowable deductions as the activity has led to inflated cost of asset.
As studied in the case of “British Insulated & Helsby Cables”, the company has taken advantage of relocating the depreciable asset to a new place which has been evident in the aforementioned case. Based on the study of the case the “Taxation ruling of TD 92/126” debate that the cost for out setting out setting of the new missionary is a part of the revenue is directly comes under cost of capital and hence cannot be considered under permissible deductions.
Conclusion:
Based on the aforementioned consideration the costs involved in moving of machinery cannot be considered under allowable deduction as such costs forms a part of the capital.
The important question has been answered with whether the asset revaluation for insurance needs to be entitled for allowable deductions by consideration of “Section 8-1 of the ITAA 1997”.
- “Section 8-1 of ITAA 1997”
As per the given situation the cost of the valuation of assets as a result of insurance cover needs to be entitled for the allowable deductions directly under per “Section 8-1 of the ITAA 1997”. This is mainly seen to be applicable for the repeatability of the expenditure. The outlay cost incurred for the fixed asset revaluation is further apportioned on straight-line basis. The different types of cost incurred shows that they are impertinent in nature to the advantages and also predictive. Therefore such costs shall be considered for deductions under “Section 8-1 of the ITAA 1997” (Barkoczy 2016).
Conclusion:
Based on the aforementioned criteria, the revaluation of that said as a result of new insurance cover needs to be held deductible per “Section 8-1 of the ITAA 1997”.
The aforementioned question related to the case has been seen in terms of whether the legal expenditure for opposing a winding up petition needs to be considered for allowable deductions.
- “FC of T v Snowden and Wilson Pty Ltd (1958)”
- “Section 8-1 of the ITAA 1997”
Question 2 – Input Tax Credits
In order to see the applicability aspect it is to be forced a certain whether minding up of business is an outlay of business function in such a case the legal expenditure cannot be considered as for allowable deductions as per “Section 8-1 of the ITAA 1997”. As per the depictions made from “Taxation ruling of ID 2004/367”, the different types of costs are seen to be legally associated for execution of business operation and henceforth the cost incurred by taxpayer is utilised for producing assessable income.
Based on the depictions made in the “FC of T v Snowden and Wilson Pty Ltd (1958)” case, it has been determined that the main outlay of the expenses has been taken place from the ordinary course of business and henceforth the taxpayer required to outlay such state of affairs to prevent any expense which is considered admissible for deduction.
In spite of the qualification cost according to the positive limbs, the very essence of expenditure cannot be held permissible for deductibility aspect as the expenses of features stating it as cost of capital.
Conclusion:
Based on the aforementioned case, it can be clearly mentioned that the cost involved in opposition to the petition cannot be held claimable for the allowable deduction with the application of rulings under “Section 8-1 of the ITAA 1997”.
The given issue has been able to make sure whether expenses borne for the services of solicitor needs to be considered for deductions under “Section 8-1 of the ITAA 1997”.
- “Section 8-1 of the ITAA 1997”
The ruling stated for the various types of trading activities needs to be taken into consideration for various types of admissible deductions. It has been further noted that as per “Section 8-1 of the ITAA 1997”, if the expenditure is of capital or domestic in nature then it cannot be taken as non-exemption and non-accessible deduction. Although in order to meet the criteria for the allowable deductions of legal expenditure, such expenditure needs to be linked with the revenue producing activities. Based on the given case, the taxpayer has undertaken the expenditure taking the various types of services of solicitor related to business function and these needs to be entitled for the deductions under “Section 8-1 of the ITAA 1997”.
Conclusion:
Based on the depictions made from the applications it has been seen that the legal service charge is born for the solicitor in discharging of business function should be held directly under “Section 8-1 of the ITAA 1997” as the different types of legal expenditure is associated to revenue generating activity.
Question 3 – Foreign Tax Offset
The given case is related to ascertain whether the determination of tax input credit subjected for GST applicability under “GST Act 1999”.
- “Ronpibon Tin NL v FC of T”
- “Goods and Service Taxation Ruling of GSTR 2006/3”
- “GST Act 1999”
Based on the given case of Big Bank Ltd the applicability aspect has been dealt with data mining whether the GST supplies is made with determination of input tax credit for determining advertising expenditure. As per the ruling is considered in “Chapter 2 of the GST Act 1999”, any sort of commercial unit needs to be permitted for claiming input tax which has been undergone by the organisation in usual course of business. Despite of this it needs to be further ascertained that the expenditure needs to be inclusive of the GST amount charged. As per the present case of Big Bank Ltd., the organisation has been able to put forward its financial services in more than 50 branches situated throughout the country.
As per the given case under “division 11-15 and 129 of the GST Act 1999”, “division 11-15 and 129 of the GST Act 1999”, it has been determined that the credible acquisition recognised has been mentioned previously. With reference to “GSTR 2006/3”, has been further identified that the business concern has exceeded the financial benchmark for acquisition of input tax credit. In context of Big Bank the advertisement expenses has taken place inclusive of the GST amount, therefore “GSTR 2006/3”, is seen to be applicable for the given case.
The application of “Ronpibon Tin NL v FC of T” has been further identified as the application of important legislation directly linked with “GSTR 2006/3”, which has been able to depict the “extent” and “to the extent” GST supplies concept. Based on the depictions of “para 11-5 and 15-5” under “GSTR 2006/3”, it has been able to determine whether the credible acquisitions are made wholly or partially (Millar 2014).
In addition to the aforementioned paragraph, “Section 11-5 and 15-10” has been able to signify whether the acquisitions needs to be treated creditable as per the financial supplies arising out of the commercial activity including some of the input tax which may be claimed.
Conclusion:
The application of the given case has shown GST ruling under “GSTR 2006/3” is directly related to the case of Big Bank Ltd as it adheres to the various types of input tax credit resulting from expenditure.
References
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Millar, R., 2014. Grappling with basic VAT concepts in the Australian GST: the meaning of ‘supply for consideration’. World Journal of VAT/GST Law, 3(1), pp.1-31.
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