GST input tax credits
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If the acquisition or importation of a depreciating asset constitutes a creditable acquisition or a creditable importation, the cost or opening adjustable value of the asset is reduced by any input tax credit you are, or become, entitled to in relation to its acquisition or importation. For an explanation of opening adjustable value-see Methods of working out decline in value.
If the cost of a depreciating asset is taken to be its market value (such as for assets acquired under a private or domestic arrangement), the market value is reduced by any input tax credit to which you would be entitled had the acquisition been solely for a creditable purpose.
Similarly, any input tax credit you are entitled to claim in relation to the second element of a depreciating asset's cost reduces the cost or opening adjustable value of the asset.
Certain adjustments under the GST legislation reduce or increase the cost or opening adjustable value of the asset. Other adjustments are treated as an outright deduction or income.
Last modified: 01 Jun 2005QC 27399