Taxation Theory, Practice & Law
1.0 Question one:
The transactions dealing with goods and services are subjected to the Australian tax act known as the good and services tax act. The supply of goods and the acquisition of those goods are liable for goods and services tax rate as determined by the GST ac of the Australian tax systems. There some conditions outlined in different goods and services tax act. The conditions are as follows; transaction involving the exchange of good or offering service, consideration, connection with Australia (Heng-Contaxis et al., 2013 and Mustapha et al., 2015)
The consideration is vital when it comes to GST and should be in cash or credit terms which is known and agreed by the parties involved. The payment made by the company to a local lawyer is a legal fee and this is included when making goods and services tax for the specific financial year as determined by the Government-S 9-15 of GST Act. The company is entitled to the input tan credit because it is part of the land acquisition.it is specific because it is known in figures$33,000.
Both the company and outsourced lawyer are from Australia and the piece of land is within the boundaries of Australia. This show there is a connection of the transaction of the land and legal services. The (S 9-25 of GST Act). The lawyer is an Australian origin because we are told that the lawyer is a local one and therefore the legal fee paid for the legal services offered by the lawyer (Heng-Contaxis et al., 2013 and Mustapha et al., 2015).
There should be a service of good involved in the transaction. The piece of land is a good and legal services offered by the lawyer by the name Maurice Blackburn. The payment is due to the service and the payment made for the piece of land and the serviced offered od to accomplish the transaction-(S 9-10 of GST) Therefore, there is legibility of the for GST because it is credible acquisition transaction of the pieces of land (Heng-Contaxis et al., 2013 and Mustapha et al., 2015).
There is set thresh-hold set by the GST act which should be attained for all the registered companies or individuals who have registered for the GST. for the company to declare and pay the GST arising out of the transaction od offering both service and goods should be at least $75,000 per year. The City Sky Co have a turnover of more than $75,000 which is the lowest set turnover set by the GST act for a company to be legible to register for GST and since the company is registered for GST, it means it meets all the requirement s as outlined in the GST act of the Australian Tax System-S 23-5 of GST Act. The value of the transaction is included as in the more than 300,000 turnover made by the company. because this is a cost and therefor the company should less the GST made when it subjected to the goods and services tax act (City, 2017).
The goods and services tax act require the company to calculate the total GST that is supposed to be paid by the company at the end of the year and make some necessary adjustment by deducting the input tax credit entitled with is equal to the GST, adding increase in adjustments and deduct the decreased adjustments for the company to know exactly. Therefore, the company will need to calculate 10% of the amount of the total turnover that is mentioned to be more than $300,000 and deduct the input tax credit arising sue to the legal fee made by the company in the process of land acquisition (Heng-Contaxis et al., 2013 and Mustapha et al., 2015
The GST is arriving at by the application of the 10% on the total amount payables or paid as legal fees to the lawyer who offered the paralegal series that was needed for the land acquisition to be complete.
goods and service tax rate
goods and services tax payable
input tax credit entitled.