On 19 February 2015, the Federal Court handed down its decision in the case of Rio Tinto Services Ltd v FCT [2015] FCA 94.

In this case, the Court dismissed the taxpayer’s appeal concerning its entitlement to input tax credits (ITCs) for certain acquisitions relating to remote housing accommodation in Western Australia (WA).


Below is a summary of the case:

  • The taxpayer incurred expenditure on the construction and purchase of new housing, refurbishment and repairs of residential housing, mould removal and hygienic cleaning and cleaning housing and landscaping.
  • The accommodation was leased to workers and the leases were input taxed supplies of residential accommodation.
  • The taxpayer claimed it was entitled to ITCs of approximately $600,000 for the acquisitions in “providing and maintaining residential accommodation for its workforce in the Pilbara region”.
  • The Commissioner rejected the company’s ITC claim on the basis that although they were made in the course of the taxpayer’s enterprise, they related to making supplies that would be input taxed.
  • The Court held that the acquisitions in question had a direct connection with the provision of leased accommodation and therefore, the acquisitions were not made for a “creditable purpose” (i.e. the acquisitions related wholly to the provision of accommodation and constituted input taxed supplies). The taxpayer was therefore disallowed input tax credits in respect of the remote housing accommodation.


We recommend that you review any residential housing that you lease to workers and ensure that you are complying with GST legislation.