| Revenue Ruling Public Ruling
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| This ruling clarifies how ad valorem duty under items 6 and 7 of Schedule 2 to the Stamp Duties Act 1931 (“the Act”) applies to a conveyance or transfer of real or personal property (hereinafter referred to as a "conveyance") and a contract of sale or an agreement for the sale of a business (hereinafter referred to as a "contract") subject to GST. Preamble Following the introduction of GST by the Commonwealth Government on 1 July 2000 there has been some confusion as to the stamp duty implications relating to conveyances of property which attract GST. Ad valorem stamp duty at the rate specified under items 6 and 7 of Schedule 2 to the Act is charged on the greater of the consideration for, or the full unencumbered value of, the property being conveyed. GST is imposed under A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth on taxable supplies at 10% of the value of the supply. The value of a taxable supply is 10/11ths of the price. The price of a taxable supply is the amount or market value of the consideration for the supply without any discount for the amount of GST (if any) payable on the supply. GST is payable by the person who makes the taxable supply. RULING Where a conveyance or contract is silent as to whether the transferor is liable to GST in respect of the transaction, stamp duty will be assessed on the consideration or the full unencumbered value of the property, whichever is the greater (ie: on the basis that 1/11th of the consideration or full unencumbered value is attributable to GST). Where a contract contains a condition that the transferee will pay the stated consideration plus an amount equal to the GST payable by the transferor, stamp duty will be assessed on the GST “inclusive” amount. The GST component forms part of the consideration and stamp duty is assessed on the greater of the consideration (including the GST component) or the full unencumbered value of the property, whichever is the greater. Where a contract contains a clause or provision which indicates that the transferor’s liability to GST is unknown as at the date of contract or transfer but that should it be payable, an amount equal to that liability will be paid by the transferee to the transferor, the stamp duty will be assessed on either the consideration (exclusive of any GST component) or the full unencumbered value of the property provided that an undertaking from the transferee in the form of the attached declaration accompanies the lodgement. In completing the declaration, the transferee is undertaking to re-lodge the contract with the State Revenue Office in the event that GST is paid on the transaction at a later date. The power to re-assess an instrument after it has been stamped is contained in section 15(5) of the Act. It is envisaged that compliance activity will be conducted on these contracts and also on contracts that are ‘silent’ as to the payment of GST. All rulings must be read subject to Revenue Ruling PUB-GEN-2001-1. Peter Coe COMMISSIONER OF STAMP DUTIES COMMISSIONER OF STATE REVENUE |
