9.3. When will the GST liability and input tax credit entitlement arise if I am a lessor?
Non-interpretative – other references (see GSTR 2000/29External Link - Goods and services tax: attributing GST payable, input tax credits and adjustments and particular attribution rules made under section 29-25)
If the lessor accounts for GST on a cash basis, GST liability is attributable to the tax periods in which payments for the supply are received.
The attribution rules for supplies of goods under lease agreements are provided by Division 156 of the Act. Section 156-5 of the Act has the effect of treating each progressive or periodic component as a separate supply. That is, the general attribution rules in Division 29 of the Act apply to each component of the supply.
Therefore, lessors who account for GST on a non-cash basis will be liable for GST for the supply in the tax period in which:
- payment is received by the lessor, or
- when a lease payment is due and payable by the lessee as outlined in the payment schedule contained in the lease agreement document, if this is earlier.