GST on levies

Hi everyone,

Our Strata Company was previously registered for GST. We didn’t need to as we come under the threshold but the previous Manager (who is also the Developer of the building and still owns one unit) did so because we have two commercial units in the building (12 residential for a total of 14) so he thought it would benefit them (we have since deregistered). 

When he was issuing levies, he was only charging GST on the levies for the commercial units, which as far as we are concerned, is incorrect. There is no reference to such a decision anywhere on the ATO website, and the tax document he relied upon to make that decision actually refers to leasing units. 

When our new Manager took over, he entered all the financial information and entitlements in to the software, ticked the box for GST registered, and the result was that it recalculated everyone’s fees. The residential owners had a slight increase (mine was $12 a quarter) while the commercial owners had a decrease. Essentially, the GST being collected from the commercial units was being shared across all units, but the main thing is our annual income did not change. 

A problem has arisen because the same Manager who made the original mistake took us to the State Adminstrative Tribunal (I’m in WA) to say the the new Manager breached the by-laws and Strata Titles Act by raising the fees without having a vote at a General Meeting. He has refused to pay the extra, and has also claimed that because of the incorrect levies he now receives, the entire thing is just so confusing and erroneous that he won’t pay any levies until it is sorted.

My questions to everyone are;

Does GST need to be charged on levies, regardless of it being a residential or commercial unit, if the Strata Company is GST registered?

Do you think he has a case for the levies being altered without the correct vote, despite the very minor increase being a result of his error?

Could we be in a potential breach of the GST laws for the previous way it was being done, and would the ATO likely come down hard on us if they were to find out?

We are actually about to send him a letter outlining our position, telling him he was wrong and showing proof that he was wrong, giving him 14 days to prove otherwise, or else we will continue to charge him the correct amount and commence debt collection proceedings. I just want to be absolutely sure that we are right before sending that letter!