1.4. When will liability for GST arise for the financier of goods in a hire purchase agreement?
For source of ATO view, refer to paragraphs 209 and 210 of 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 financier accounts for GST on a cash basis, GST payable on a taxable supply under the hire purchase agreement will be attributable to the tax periods in which payments are received for the supply.
If the financier accounts for GST on a non-cash basis, GST is payable upon issuing the invoice or receiving payment for the supplies made under the hire purchase agreement, whichever is earlier. If a tax invoice is issued in the tax period in which a hire purchase agreement is entered into, all the GST payable on the taxable part of the agreement is attributable to the tax period in which the agreement is entered into.
Goods and Services Tax Ruling GSTR 2000/29External Link provides further information on the attribution of GST under section 29-25 of the GST Act.