Know When To Claim GST Input Tax Credits

GST registered businesses can claim GST input tax credits of the GST included in the price of goods or services purchased for use in the business if a valid tax invoice is held.  The retention of a tax invoice is not required for purchases less than $75 GST exclusive.  While this concession was enacted to save on the retention of tax invoices for relatively small amounts, we recommend that tax invoices be held or be scanned for computer storage.  Please note that GST registered businesses must issue a tax invoice for the sale of all goods and services regardless of price.

GST input tax credits can only be claimed if purchases are made relating to the making of either:

• Taxable supplies (e.g. a property developer that sells new apartments may claim the GST charged on acquisitions relating to the sale); or
• GST-free supplies (e.g. a farmer who has carried on a farming business on the land for at least 5 years and sells the land to a buyer and the buyer intends that a farming business will be conducted on the land, may claim the GST charged on the original purchase price of the farmland).

GST input tax credits cannot be claimed on purchases relating to the making of input taxed supplies (e.g. selling financial products or second hand property).
 

Click   HERE to download the full edition of The Business Accelerator Magazine for March 2018.

Other Articles in this Edition:

• Half of Australian Small Businesses Don't Have a Website - Surely Not!
• Before You Buy a Franchise
• Cash is King
• ATO Audits - A Blitz on Cash-Based Businesses
• A Reporting Change for Employers - Single Touch Payroll
• When Can You Access Your Super?
• Reduction of Company Tax Rates & Imputation Credits