Joint submission on Draft Goods and Services Tax Ruling GSTR 2011/D5

On 10 February 2012, the professional bodies lodged a joint submission on Draft Goods and Services Tax Ruling GSTR 2011/D5 (Draft ruling) concerning the GST treatment of care services and accommodation in retirement villages and privately funded nursing homes and hostels.

In our submission, we noted that: 

• In respect of serviced apartments in retirement villages, most of the views in the Draft ruling are consolidations or extensions of views expressed in earlier ATO publications, particularly issue 10 of the Retirement Villages Industry Partnership issues register and the fact sheet ‘GST and serviced apartments in retirement villages’ NAT 12761 which will be withdrawn when the final Ruling is issued
• Just because some of the views expressed in the Draft Ruling may have been long-held ATO views does not however necessarily mean they are correct or appropriate interpretations of the legislation, particularly where formal external consultation processes were not undertaken in the formulation of those views. We welcome the opportunity to address some of these matters now
• Each of our specific comments in the submission demonstrates the Commissioner disregarding the actual words of the legislation or reading words or concepts into the GST Act which are simply not there. This is a disturbing continuation of the trend in the Commissioner’s approach to statutory interpretation for which the Commissioner has received recent judicial criticism, including in International All Sports v Commissioner of Taxation [2011] FCA 824 and by Emmett J in Gloxinia Investments Limited as Trustee for Gloxinia Unit Trust v FCT [2009] FCA 641 (affirmed by the Full Federal Court)
• In summary, we consider that the Commissioner’s interpretation in the Draft Ruling unduly limits the supplies which should be GST-free under subsection 38-25(3). A major concern with the Draft Ruling lies with the analysis of when services are provided in a 'residential setting' for the purposes of subsection 38-25(3).
  

Article last Updated 13 February 2012