The going concern exemption is a Goods and Services Tax provision under Subdivision 38-J of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) that treats the sale of a business as a “supply of a going concern” and exempts it from GST. To qualify, the seller must supply all things necessary for the continued operation of the enterprise, the seller must carry on the enterprise until the day of supply, and both buyer and seller must be GST-registered and agree in writing that the supply is of a going concern.
Where the going concern exemption applies, GST is not added to the purchase price, which is generally seller-favourable. Failure to satisfy any of the conditions can result in unexpected GST liability that flows back to the seller.