Budget 2008-09: ITC and Termination of Enterprise
21.10.08
The District Court of Queensland has reduced the indemnity costs payable by a plaintiff by the input tax credit (ITC) that an applicant could have claimed, even though the applicant was no longer carrying on an enterprise for GST purposes.
The District Court found that in resisting the plaintiff’s claims, the applicant had carried on an incidental aspect of its business, while terminating its enterprise. Therefore, the applicant was entitled to claim the ITC.
It is the Tax Office’s view that whether an activity relates to the termination of the enterprise is one of fact and degree, which depends on the circumstances of the termination.
