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3 World J. VAT/GST L. 1 (2014)

handle is hein.journals/wjvatl3 and id is 1 raw text is: DOI: http://dx.doi.org/10.5235/20488432.3.1.1 Grappling with basic VAT concepts in the Australian GST: the meaning of'supply for consideration' REBECCA MILLAR' Professor of Law, Sydney Law School, The University of Sydney, Australia. The quintessentially eccentric style in which the Australian GST is drafted has led the High Court of Australia to suggest that Australia's GST differs from other value added taxes in respect of the basic concept of a 'supply for consideration'. This article examines the five most significant Australian cases on this concept, which deal with cancelled transactions, subsidies, and business incentive payments. A detailed analysis of these cases reveals that the issues that arise and the arguments made in respect of those issues though not always the conclusions reached are hardly unusual in the context of a VAT, and it remains unclear just how different the Australian GST really is. 1. Introduction The Australian goods and services tax (GST) was introduced to Parliament in an era when Australia's income tax laws were being swept clean with a new brush of modern, plain-English drafting.1 Only one year earlier, a large part of the income tax law had been re-enacted as a result of the Tax Law Improvement Project, a re-drafting exercise undertaken to make the law easier to understand.2 In keeping with this modernising trend, the drafting style used for the GST law adopted what Michael Evans recently described as a 'truth in drafting' principle.3 Evans shows that Australia's experiment with borrowing provisions from other countries, then melding and remixing them using a quintessentially eccentric drafting style, has led to real questions not only about what the words used in the GST law mean, but also about whether the law says what it means and means what it says. Is the Australian GST, as it was intended to be, a modern value added tax, similar to other value added taxes? If not, how and why is it different? Nowhere are these questions more evident than in discussions of the fundamental ques- tions: 'What is a supply?' and 'Is this supply made for consideration?'. The Australian approach to defining'supply; 'consideration, and the required nexus between them exemplifies the 'bor- The author is grateful to Christophe Waerzeggers (Consulting Counsel, International Monetary Fund) for his valuable insights and for reading multiple draft versions of this article, and also to Professor Joachim Englisch for reviewing the final draft and referring me to the case noted in n 71. The usual disclaimers apply. All websites accessed March 2014. 1 The proverb 'A new brush sweeps clean, but an old brush knows the corners' means that 'someone with a new perspective can make great changes' but cautions that 'experience is also a valuable thing'. See www.usingenglish, 2 Australian Taxation Office, Tax Law Improvement Project, Building the New Tax Law: Information Paper No 2 (AGPS, 1995). The project was never completed and Australia's income tax law is now spread across two statutes: Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997. The bills that became Australia's GST law were introduced in 1998, passed in 1999, and imposed GST from 1 July 2000. 3 Michael Evans, 'Horton's Lesson: Australia's Struggle with Truth in Drafting'( 1 World JournalofVAT/GST Law 21.

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