Whether weathertightness payments by the Crown are subject to GST

TDS 22/05: Whether weathertightness payments by the Crown are subject to GST. It was held in the IRD decision a large settlement fund paid to the taxpayer related to weathertightness was subject to GST. The Crown FAP Payments to the Taxpayer are gratuitous payments to encourage or promote the repair of leaky buildings. Accordingly, the payments are in the nature of a grant or subsidy for the purposes of s 5(6D) of the Goods and Services Tax Act 1985 (GST Act). The Crown FAP payments are therefore deemed to be consideration for a supply under s 5(6D) of the GST Act. 

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