|Date of judgement||10 January 2017|
|Judge(s)||NS Isenberg, Senior Member|
|Court or Tribunal||New South Wales Civil and Administrative Tribunal|
REVENUE LAW – Gaming Machine Tax Act 2001 - apportionment of tax refund between multiple hoteliers – reassessment
In December 2012, the Applicant purchased a hotel in which a tax instalment under the Gaming Machine Tax Act 2001 had been paid by the previous owner of the hotel for the quarter ending 30 September 2012. The Applicant paid the tax instalments for the remaining quarters of that financial year.
The Chief Commissioner of State Revenue issued a Notice of Assessment to the Applicant for the entirety of the 2013 year and recorded that no gaming machine tax (“GMT”) was payable and a refund of $60,191.26 would be issued. This refund was then mistakenly paid to both the Applicant and the previous owner of the hotel. The Chief Commissioner requested the Applicant to refund an amount of $33,894.54.
In The Crest Hotel v Chief Commissioner of State Revenue  NSWCATAD 3, Verick SM, at  remitted the matter to the Chief Commissioner and directed the Chief Commissioner to:
The Chief Commissioner accordingly withdrew the Notice of Assessment and issued the Applicant with an Assessment Summary for the period 18 December 2012 to 30 June 2013, including a statement that the amount repayable by the Applicant to the Chief Commissioner was the (previously calculated) amount of $33,894.54, being approximately 43.7% of the total amount to be refunded.
The Applicant objected to the Assessment Summary, and applied to the Tribunal for a further review, following the disallowance of that objection. The issue in dispute was how much of the amount refunded by the Chief Commissioner could be retained by the Applicant.
Both the Chief Commissioner and Applicant submitted that there were several possible methods of calculating the amount of the Overpayment. The Chief Commissioner calculated the refund to the Applicant to be $33,894.54, based on the total profit for the 2013 year.
The Applicant contended that its maximum claim was to retain the whole $60,191.26 and submitted that an order should be made to that effect, or in the alternative, the Tribunal should apportion the $60,191.26 on a time basis and as the Applicant had paid for 3 of the 4 quarters it was entitled to retain 75% of the $60,191.26 and need only repay 25%.
Having regard to the scope and purpose of the GMTA as revenue legislation, the Tribunal found that the Chief Commissioner, in exercising his discretion under s.10(3), is bound to take into account the net profit in apportioning any relevant tax refund. The Tribunal determined that taking into account the total profit rather than the net profit disregards the statutory method of calculating GMT and has the potential to be manifestly unreasonable.
The Tribunal found that the Applicant as owner of the hotel on 31 December 2012 had a tax liability on that date in respect of the quarterly instalment for the second quarter, and noted that there was no evidence to support the Applicant’s claim that the Chief Commissioner should make any concession in respect of the second quarter payment as asserted by the Applicant.
Accordingly, the Tribunal determined that the refund Assessment issued 27 March 2015 should be set aside and directed the Chief Commissioner:
The appropriate method of calculation as outlined at  is:
The effect of the decision is that the amount of the repayment to which the Applicant was entitled increased from approximately 43.7% to approximately 45% of the total refund amount.