Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Taxation Expert

Question

An entity which is GST registered (or which needs to be registered) needs to charge GST on its taxable supplies (s.9.70, A New Tax System (Goods and Services Tax) Act 1999 ("GSTA")). While some transactions may only involve the exchange of a ‘taxable supply', some transactions may involve a mix of ‘taxable supplies' as well as ‘GST-free' and/or ‘input taxed' supplies.

, GSTA, requires that, "if a supply (the actual supply) is (a) partly a taxable supply, and (b) partly a supply that is GST-free or input taxed, the value of the part of the actual supply that is a taxable supply is the proportion of the value of the actual supply that the taxable supply represents." In other words, where a transaction involves the exchange of multiple types of supplies, it is necessary to identify which of these were taxable, because it is only the proportional value of those taxable supplies which would need to be taxed.

In order to determine whether a transaction involved the exchange of a taxable supply, and to determine its value, it is necessary to first identify what the customer was actually paying for. Was it paying a single price in order to receive the value of each element separately, in which case the price should be apportioned so that each element should be treated (for tax purposes) separately based on the tax treatment of its characteristics? Or, alternatively, was it paying for one ‘whole deal' which comprised of different elements? If it is one ‘whole deal', what is the proper characterization of that deal?

Assume that you have been approached by a prospective client, Burwood Cheese; a retail shop that specializes in assorted cheese products. The client is looking to introduce a promotional deal to customers, which involves packaging a new exclusive cheese product along with a T-Shirt. The client is aware that, if supplied separately, the cheese would be a GST-free supply, whereas the T- Shirt would be a taxable supply. The client is asking to have you:

- explain the issue(s) involved in taxing a transaction that provides a package deal that consists of mixed supplies (of the cheese and the T-Shirt);
- identify the relevant legislative provision(s), tax ruling(s), and case law (the client has requested reference to at least one case as an example); and
- suggest how the Commissioner may tax this transaction.

Taxation, Accounting

  • Category:- Taxation
  • Reference No.:- M93107810
  • Price:- $80

Guranteed 48 Hours Delivery, In Price:- $80

Have any Question? 


Related Questions in Taxation

Question 1for each of the following scenarios prepare dated

Question 1 For each of the following scenarios, prepare dated journal entries on the acquiring company's books for the investment from acquisition to disposal. Ignore income taxes. a) On March 1, 20X7, Rondeau Ltd., a pr ...

Assignment - all answers must be supported with references

Assignment - All answers must be supported with references to relevant legislation, caselaw and/or tax rulings QUESTION 1 - Principles and Concepts Between April 1981 and May 2017, Simon Krupcheck held various managerial ...

Tax policy is defined as which taxes the government chooses

Tax policy is defined as which taxes the government chooses to levy, in what amounts and on whom. Elements of this decision are based on both the amount needed to pay for expenditures as well as the effect taxes can have ...

Taxation theory practice amp law assignment -question 1 -

Taxation Theory, Practice & Law Assignment - Question 1 - You are working as a tax consultant in Mayfield, NSW. Your client is an investor and antique collector. You have ascertained that she is not carrying on a busines ...

Taxation theory practice amp law assignment -question 1 -

Taxation Theory, Practice & Law Assignment - Question 1 - You are working as a tax consultant in Mayfield, NSW. Your client is an investor and antique collector. You have ascertained that she is not carrying on a busines ...

Tax policy is defined as which taxes the government chooses

Tax policy is defined as which taxes the government chooses to levy, in what amounts and on whom. Elements of this decision are based on both the amount needed to pay for expenditures as well as the effect taxes can have ...

Question 1ruby engineering pty ltd ruby was incorporated in

Question 1 Ruby Engineering Pty Ltd [Ruby] was incorporated in 1990 and produced engine components used in the Australian car industry. In 2016 the business and company assets were sold to Diamond Ltd. Under the terms of ...

Business taxation assignment -assignment question - carson

BUSINESS TAXATION ASSIGNMENT - ASSIGNMENT QUESTION - Carson Pty Ltd ("Carson"), an Australian resident company for tax purposes, carries on numerous business activities. In the first half of 2014, Carson has thoughts of ...

Assessment type financial activity bas statement and

Assessment Type: Financial Activity, BAS Statement and Report Task A- Record Asset Valuation 1. Read through the scenario provided. 2. Review Packet Packaging's organisations chart of accounts. 3. Using the General Journ ...

Assignment1 section 5 of the income tax act 1967 describes

Assignment 1. Section 5 of the Income Tax Act 1967 describes the ascertainment of chargeable income. Describe the steps that are used to ascertain the chargeable income of a taxpayer. 2. Identify and briefly explain any ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As