And potentially, refunds could be due to millions of consumers and businesses who have been wrongly charged GST.

 

The GST was introduced in July 2000, but eight years later the basic question about it remains - what constitutes the supply of goods and services?

 

The Reliance Carpet case, being heard in the High Court from today, is testing whether GST is payable on a deposit forfeited in an aborted property deal.

 

In a rebuke for the Taxation Office, the Federal Court found GST could not be charged on a deposit which had been surrendered in a property deal that failed to proceed.

 

The Tax Commissioner is appealing.

 

Tax experts say the principles of the case might apply more broadly to cancellation fees, late fees, break fees and the like - and refunds could be in order.

 

PricewaterhouseCoopers partner, Kevin O'Rourke, says it is an important case.

 

"It's a bit like income tax, where you have to determine what is income," he said.

 

"Under the GST you have to determine what is a supply, because without supply there is no GST."