Home » News » New AAT Case: GQHC and ATO Considers Feedstock Provisions and Scope of ATO Power to Assess Activity Eligibility in Absence of AusIndustry Finding

New AAT Case: GQHC and ATO Considers Feedstock Provisions and Scope of ATO Power to Assess Activity Eligibility in Absence of AusIndustry Finding

March 18th, 2024

A new AAT case dated 16 February 2024 (GQHC and Commissioner of Taxation (Taxation) [2024] AATA 409), considered a situation where the ATO determined a company had not engaged in eligible R&D activities, but where no findings had been made by AusIndustry, who usually has jurisdiction over activity assessment.

The matter considered jurisdiction issues of:

• whether the Commissioner has the power to assess or make decisions as to whether a company’s registered activities consist of eligible “R&D activities” as defined in Division 355 of the ITAA 1997; and, therefore,
• whether the Tribunal has jurisdiction in the proceeding to assess or make decisions as to whether a company’s registered activities consisted of eligible “R&D activities” as defined in Division 355 of the ITAA 1997.

The matter also considered the scope and application of feedstock adjustment provisions.

The AAT appear to have decided around activity assessment that, pursuant to section 355-705, the ATO is bound by certain findings of the board; however, if the board had not made any findings on activities, it may be left open to the ATO to review activity eligibility.

The case is interesting and complex, and will require further analysis in due course.

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