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GST

Understanding Contracts and the GST Clause

Contract mistakes can be costly, and administering them often needs an understanding of both what is trying to be achieved and the legal aspects. It is important, as part of the overall contract, to have an understanding of the Goods and Services Tax (GST) issues that may arise as a result of the transaction.

GST Issues that may arise in Contracts

Under the GST Act, the supplier incurs the liability to pay GST but the supplier has no statutory right to pass on that GST liability to the purchaser – this needs to be done as part of the contractual relationship. How this contractual relationship is recorded is critical and many of the commercial disputes involve a contest about the terms of the contractual relationship.

Retirement villages, aged care and GST

We aren’t getting any younger - 
It is no secret that Australia has an aging demographic and the demand for aged care and retirement villages is increasing exponentially. According to a recent survey by the Australian Bureau of Statistics (ABS), the average male life expectancy is 80.9 years and females 85 years old. This places immense pressure on the aged care sector and as such, we are seeing a large increase in the construction of aged care and retirement facilities which also offer a vast range of services.

Should a review of GST be on the table?

Last week we asked about the future of GST in Australia and as we expected, more than 65% of the respondents felt that change is required.

As we come out of COVID-19, revenue collection will be high on the Government’s agenda, primarily to fund the cost of stimulus funding. On numerous occasions, our leaders have stated that they are against increasing taxes and want to encourage consumer spending in Australia. There are media reports of personal tax rate cuts being brought forward to reinvigorate the economy.

​Our GST system is complex and needs improvement. There have been some minor adjustments, such as making certain foreign suppliers of goods and services in Australia being liable for GST, but there is scope to make some targeted changes to improve the efficiency of the GST system. Read more about our thoughts and the options available.