Indirect tax ebook - Australia

Other local requirements 

Recovery of input tax

GST is accounted for at the following times:

General rules
An entity that accounts for GST on a cash basis is entitled to claim back the GST on an acquisition made in the reporting period that it pays for the purchase made, as long as it holds a valid tax invoice. If the entity only pays part of the cost of the purchase in a reporting period, it can only claim the GST credit for that part of the cost in that reporting period.

An entity that accounts for GST on a non-cash basis can claim a GST credit for an acquisition made at the earlier of receiving an invoice from the supplier or making any payment in relation to the purchase. However, it must hold a valid tax invoice in order to claim a GST credit for the purchase.

Progressive or periodic acquisitions
The GST on a progressive or periodic acquisition is accounted for as if each component of the progressive or periodic acquisition is a separate acquisition.

Restrictions on claiming back GST incurred
The GST on acquisitions made for the purpose of making input taxed supplies is generally not recoverable (other than in certain limited circumstances).

The GST on purchases made for private or domestic use is also not recoverable.

Apportionment of GST incurred
An entity that only makes input taxed supplies cannot recover any GST incurred on acquisitions made for making those supplies (other than in very limited circumstances). However, if the entity makes taxable or GST-free supplies and input taxed supplies, it can apportion the GST on the acquisitions made (conditions apply).

Importation of goods
The GST on a taxable importation is paid by the importer at the time that the goods are entered for home consumption (unless it is registered for the deferred GST scheme).

Penalties

A number of different types of penalties can be applied where the GST on supplies made is not remitted by the due date or an incorrect amount is remitted, or if GST on acquisitions made is claimed back too early or too much is claimed back. The penalties that may apply vary depending on the situation and can be quite large.  


 

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply
• Other local requirements