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  • 2.11 Is a subcontractor who pays liquidated damages to a contractor entitled to an input tax credit for the payment?

    For source of ATO view, refer to paragraphs 110 to 114 of GSTR 2001/4 Goods and services tax: GST consequences of court orders and out-of-court settlements.

    ATO position

    No. The payment is not a creditable acquisition under section 11-5 of the GST Act because it is not consideration for a taxable supply: see the answer to Issue 2.10 above.

      Last modified: 12 Jun 2012QC 16479