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  • Purchases from sellers not registered for GST

    You may be able to claim GST credits when you purchase second-hand goods from an unregistered seller for resale.

    Find out about:

    Statement by a supplier

    An unregistered seller cannot give you a tax invoice and you cannot issue them with a recipient-created tax invoice (RCTI). They must provide you with a 'statement by a supplier' when your purchase is greater than $82.50.

    They can use the form Scrap metal industry: statement by a supplier or incorporate the information required into their normal invoicing system.

    See also:

    Second-hand goods purchased for resale

    The value of second-hand goods you purchase for resale affects when and how you can claim GST credits.

    Purchases of $300 or less

    You can claim GST credits for purchases of $300 or less in the tax period you make the purchase, regardless of when you intend to sell it.

    Purchases costing more than $300

    You can only claim GST credits for purchases costing more than $300 when you resell the goods. You calculate and claim the GST credit in the period of your sale.

    The GST credit which you can claim is equal to the lesser of:

    • 1/11th of the your payment for the second hand goods
    • the amount of the GST payable on the sale of the second-hand goods.

    Purchases divided for resale

    If you choose to divide purchases for resale the process for claiming GST credits is slightly different. This process is called global accounting.

    The global accounting process applies when:

    • you purchase second hand goods
    • the purchase costs more than $300
    • you expect to divide it into two or more separate sales.

    You may also choose to use this process when you purchase second-hand goods for $300 or less and sell them in at least two separate sales.

    When using this method (global accounting), you pool your GST credits and GST payable so that you only need to pay GST when the GST payable exceeds the amount of credit available. Where the amount of GST credit exceeds the GST payable, no refund is payable. However, this net amount is carried forward and off-set against the GST payable you need to pay in the next tax period.


    GST for different periods example


    1st tax period

    2nd tax period

    3rd tax period

    GST credit carried over from previous period




    GST collected (as a result of sales)




    GST credits (as a result of purchases)




    GST payable to ATO




    GST credit to be carried over to next period





    End of example

    In all circumstances, care needs to be taken in claiming GST credits when goods are subsequently exported. 

    What you need to make a claim

    In order to claim a GST credit for a purchase greater than $82.50, the seller must provide you with a statement by a supplier for your records.

    For purchases less than $82.50 you will need documentation that includes:

    • the name and address of the seller
    • a description of the type and quantity of the goods
    • the date and cost of the purchase.

    Export goods purchased from unregistered sellers

    Exported goods are GST-free.

    If the seller is not registered for GST, you cannot claim GST credits on your purchases which you subsequently export.

    See also:

      Last modified: 24 May 2017QC 17303