4-year credit time limit
Your entitlement to a GST credit ceases unless it is included in an assessment before the end of 4-year credit time limit.
The 4-year credit time limit ends 4 years after the lodgment due date of the BAS for the tax period in which you could have first claimed the GST credit (setting aside any requirement to hold a tax invoice).
If you account for GST on a cash basis, the earliest tax period in which you could claim a GST credit for a purchase is the tax period in which you make the payment. If you make the payment over multiple tax periods, the 4-year credit time limit applies separately to each part of the payment.
If you account for GST on a non-cash (accruals) basis, the earliest tax period in which you could claim a GST credit for a purchase is the first tax period in which either:
- an invoice for the purchase is issued
- you provide part or all of the payment for your purchase.
If you lodge your BAS on time and include the GST credits you are entitled to, those credits will be included in an assessment well within the time limits and you will not lose your entitlement. Conducting timely reviews or reconciliations to identify errors early will ensure you have sufficient time to address mistakes before the 4-year credit time limit ends.
Even where the 4-year credit time limit for claiming GST credits is about to end, you still need to ensure that you are adhering to your GST reporting obligations. If you claim additional GST credits and we review them and decide you are not entitled to those GST credits, you may be subject to penalties and interest.
Actions taken after the 4-year credit time limit ends can't revive your entitlement to a GST credit. We have no discretion to extend the 4-year credit time limit.
Example: time limit for GST credit (cash accounting)
Mia paid for office equipment in March 2020. Mia reports quarterly and on a cash basis.
The first tax period in which Mia could have claimed GST credits for the purchase of office equipment is her March 2020 quarterly tax period. Mia's BAS for this quarter is due on 28 April 2020. The 4-year credit time limit ends at the end of the day on 28 April 2024.
End of exampleWhen a GST credit is included in an assessment
A GST credit that you have included in your BAS for a tax period is included in your assessment for that tax period. The GST credit is included in your assessment on the day you lodge your BAS.
Where we make an amendment to your assessment to include additional GST credits, those credits will also be included in an assessment. These credits are included on the day we make the amended assessment.
When a GST credit is not included in an assessment
The following actions don't result in a GST credit being included in your assessment:
- applying for a private ruling
- making a request for an amendment to your assessment
- lodging a revised activity statement (this is treated as a request for an amendment to your assessment)
- making a voluntary disclosure
- lodging an objection.
If you consider you are entitled to GST credits that haven't been included in an assessment, we recommend you consider your options early and do not leave things to the last minute.
Options for unclaimed GST credits
If you are yet to lodge your BAS for the tax period in which the GST credits could be claimed, you can claim the credits in that BAS. Your BAS must be lodged before the end of the 4-year credit time limit or you will lose your entitlement to the GST credits.
If you have already lodged your BAS for the tax period in which the GST credits could be claimed, your options include:
- claiming GST credits in a later BAS
- amendment requests
- objections.
If you are under current compliance activity, you should engage with the compliance team in relation to your options.
Claiming credits in a later BAS
GST credits that you have not previously claimed don’t have to be claimed in the original tax period. You can claim the credits in a later BAS. However, the BAS will need to be lodged within the 4-year credit time limit for those GST credits otherwise your entitlement to those credits will cease.
Amendment requests
Amendment requests and voluntary disclosures that seek to include additional unclaimed GST credits in a past tax period are requests for us to do something. Consideration of your request may take time and we may require evidence to verify your entitlement to the additional GST credits. Any revision or amendment we make to your assessment as a result of your request may not be done on the day you made the request.
GST credits are only included in your assessment if we make a revision or amendment to your assessment. The GST credits will be included in the assessment at the time the revision or amendment is made.
Your entitlement to GST credits can cease in the period between when you submit an amendment request or voluntary disclosure to us and when amendments are processed. If the 4-year credit limit has ended before any revision or amendment is made, your entitlement to the GST credit will have ceased and we can't revise or amend your assessment to include the GST credits, unless an exception applies. It doesn't matter if your application or request was made within the 4-year credit time limit for the GST credits or during the period of review for the assessment.
You should consider making your amendment request via Online ServicesExternal Link using a revised BAS (RBAS). These requests are generally processed faster than amendment requests made through other channels. If you have lodged an amendment request, you should actively monitor the request.
If the 4-year credit time limit for claiming the GST credits is within a one month of expiring and the amendment request has not been processed, you can phone us on 13 28 66 (within Australia).
Objections
Lodging an objection request by itself does not result in GST credits being included in your assessment.
But we may still be able to allow your GST credits in our objection decision if all of the following are met:
- you lodge a valid objection against your assessment for the tax period in which you could have claimed the GST credits (taking into account the tax invoice requirements) which includes your position that you are entitled to the unclaimed GST credits in the tax period
- the objection is lodged within the 4-year credit time limit for those GST credits
- we, or subsequent court or tribunal proceedings, agree you are entitled to the GST credits in that tax period.
If your objection is lodged outside the 4-year credit limit, your entitlement to the GST credits will have already ceased. This will be the case even if the objection was lodged in the objection time limits or is treated by us as being lodged within the objection time limits.
If unclaimed GST credits are not attributable to the tax period that the objection is for, the credits can't be allowed as part of the objection. If the 4-year time limit for those GST credits passes without the credits being included in an assessment, your entitlement to those credits will still cease.
Lodging a private ruling request, amendment request or a voluntary disclosure within the 4-year credit limit doesn't achieve the same outcome as lodging a valid objection within the 4-year credit time limit.
An objection should be a last resort as it's usually used to dispute a decision or assessment, not to fix a mistake. However, you should engage with us where there is a dispute, for example, where you are taking a position contrary to an ATO view, in which case an objection is an appropriate avenue.
Remember to be specific and state fully and in detail the grounds for objection. The amounts in your objection will be scrutinised and you must be able to substantiate amounts with appropriate documentation.
Example: objection in the 4-year credit time limit
John purchased various pieces of equipment for his business in June 2020 for $3,300. John paid for the equipment in full and received a tax invoice at the time of purchase. John reports quarterly and on a cash basis.
John could have claimed GST credits of $300 in the June 2020 tax period. John did not claim the credits when lodging the BAS for the tax period. The due date for the June 2020 BAS was 28 July 2020.
In July 2024, John realises he has not claimed credits for his purchases. John decides to lodge an objection for the June 2020 period. John lodges his objection on 24 July 2024 and states in his grounds that he is entitled to an extra $300 GST credits for his equipment purchases.
The Commissioner does not consider his objection until 4 August 2024, after the expiry of the 4-year credit time limit. Although the 4-year credit time limit has expired, the Commissioner can still allow John's objection (if satisfied that John is entitled to the credits) because:
- John's objection was lodged and raised the entitlement to the GST credit within the 4-year credit time limit, and
- the GST credit is attributable to the tax period objected to.
Period of review
The 4-year credit time limit is different to the period of review.
The period of review is the period during which we can amend your assessment. This is generally, 4 years from when you lodge your BAS. The period of review can be extended by an agreement or could be refreshed where there is an amendment. There are also some exceptions to this period where we can amend your assessment after the period ends. The 4-year credit time limit is not an exception to the period of review.
While we might be able to amend your assessment (for example, where we are within the period of review or because of an exception to the period of review), we can't amend the assessment to include unclaimed GST credits if the 4-year credit time limit has ended and no exception applies.
This means there are situations where we can amend your assessment for overpaid or underpaid GST, overclaimed credits and increasing or decreasing adjustments, but we can't include the unclaimed credits where your entitlement to those credits has ceased.
Exceptions to the 4-year credit time limit
There are two exceptions to the 4-year credit time limit. The first exception applies if, in the absence of fraud or evasion:
- you didn't claim a GST credit for an acquisition that you believed related to an input-taxed supply, and
- after the 4-year credit time limit has ended, we make an amendment on the basis that the supply is not input taxed.
You can claim the GST credit in these circumstances if we are still able to amend the assessment for the tax period in which you first could have claimed the GST credit (putting aside the tax invoice requirements).
The second exception applies where you ask us to treat a document as a tax invoice within the 4-year credit time limit. If we agree to your request after the 4-year credit time limit has ended, you will remain entitled to the GST credit.
For more information see:
• MT 2024/1: Miscellaneous Tax: time limits for claiming an input tax or fuel tax credit