Australian Case Studies
Learning Objective
Navigate real Australian business scenarios requiring compliance with ATO regulations and AASB standards. Each case tests your ability to apply regulations to practical situations.
GST on Construction Services
Background
BuildRight is a medium-sized construction company specializing in residential projects. They've just completed a $2.2 million apartment complex.
Issue
The client is claiming they shouldn't pay GST on the construction services as the building will be used for residential rental, which provides GST-free income.
Relevant Documents
Contract Extract
Services: Construction of 10 residential apartments Total Contract Value: $2,200,000 (GST inclusive) Completion Date: 30 June 2024 Purpose: Long-term residential rental
ATO Ruling Reference
GSTR 2003/3: GST and the construction industry states that construction services are taxable supplies regardless of the end use of the property.