Birchstone Brief for the week ended 13 October 2023

ATO Updates

GSTD 2023/D1 – GST implications of combination food

Following the AAT’s decision in Chobani Pty Ltd v FCT [2023] AATA 1664 (covered in the Birchstone Brief for the week ended 23 June 2023), the ATO has released provisional guidance regarding:

  • when a supply will be a supply of a combination of one or more foods, at least one of which is taxable; and 
  • the GST implications of such supplies. 

GSTD 2023/D1 provides that the Commissioner considers:

  • a supply of combination food is a supply of a product comprising two or more separately identifiable foods, at least one of which is taxable for GST purposes; 
  • to be a combination food, the separately identifiable foods must be sufficiently joined; 
  • two or more foods will not be a combination food if the taxable food is so integrated into, or insignificant within, the overall product supplied that it has no effect on the essential character of that product;
  • the classification of a food product is an objective question of fact and degree to be answered with reference to all relevant factors. 

ATO to obtain visa data 

The ATO has announced that it will acquire visa data from the Department of Homes Affairs for the 2024 to 2026 income years. Data that will be collected includes identification details for visa applications and sponsors, migration agent details, and all international travel moments undertaken by visa holders. The purpose of the data matching program is to help ensure that individuals and businesses are fulfilling their tax and super reporting obligations. 

Draft FBT Legislative Instruments

The ATO has issued five draft legislative instruments regarding records that may be used as an alternative to employee declarations for FBT substantiation purposes. They are:

Class ruling issued

The ATO has issued CR 2023/57 – Unity Bank Limited – Unity Capital Notes. 

 

Cases

Appeals – JMC Pty Ltd

The High Court has dismissed the Commissioner’s application for special leave to appeal against the Full Federal Court’s decision in JMC Pty Ltd v FCT [2023] FCAFC 76 (covered in the Birchstone Brief for the week ended 26 May 2023). In that case, the Full Federal Court overturned the primary judge’s decision and held that, in light of the relevant parties’ rights and obligations under their written contract: 

  • a lecturer was engaged by the appellant as an independent contractor and was not an employee, within either the ordinary meaning of that term or the extended definition in section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth); and
  • consequently, the appellant was not required to make superannuation guarantee contributions in respect of the lecturer.

Appeals – Godolphin

The High Court has granted the taxpayer’s application for special leave to appeal against the NSW Court of Appeal’s decision in Chief Commissioner of State Revenue (NSW) v Godolphin Australia Pty Ltd [2023] NSWCA 44 (covered in the Birchstone Brief for the week ended 31 March 2023). In that case, the Court of Appeal held that the respondent taxpayer was not entitled to a NSW land tax exemption for primary production in respect of the land on which it conducted a business of breeding, training, racing and selling thoroughbred racehorses. This was because a majority of the Court was not satisfied that the taxpayer had proven its dominant use of the land in the relevant years was maintaining animals for the purpose of selling them, their natural increase or bodily produce, as was required to avail of the exemption.

 

Legislation

Consultation Paper: Payday Super

Treasury has released a Consultation Paper regarding the 2023-24 Federal Budget measure requiring employers to pay superannuation on the same day that they pay their employees’ salary and wages from 1 July 2026. The last day for comments is 3 November 2023. 

 

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