ATO Interpretative Decision
ATO ID 2002/167 (Withdrawn)
Goods and Services Tax
GST and rental expenses for vending machine operatorsFOI status: may be released
-
This ATO ID is a straight application of the law and does not contain an interpretative decision.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Withdrawn 2 December 2005
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is the entity, a vending machine operator, entitled to an input tax credit under section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it pays rent for floor space, from which it operates its vending machines?
Decision
Yes, the entity is entitled to an input tax credit under section 11-20 of the GST Act when it pays rent for floor space, from which it operates its vending machines.
Facts
The entity is operating a vending machine business. The entity pays rent on floor space, which it uses to operate its vending machines. The supply of the floor space to the entity is a taxable supply. All supplies the entity makes from the vending machine are taxable supplies. The entity is registered for goods and services tax (GST).
Reasons for Decision
Under section 11-20 of the GST Act, an entity is entitled to an input tax credit for any creditable acquisition that it makes. Section 11-5 of the GST Act provides that an entity makes a creditable acquisition if:
- •
- it acquires anything solely or partly for a creditable purpose;
- •
- the supply to it is a taxable supply;
- •
- it provides, or is liable to provide, consideration for the supply, and
- •
- it is registered or required to be registered for GST.
The first requirement in section 11-5 of the GST Act is that the entity makes the acquisition solely or partly for a creditable purpose.
Subsection 11-15(1) of the GST Act provides that an entity acquires a thing for a creditable purpose to the extent that it acquires the thing in carrying on its enterprise. The entity is paying rent on floor space it uses to operate its vending machines from. Therefore, the acquisition has been made in carrying on the entity's enterprise and is for a creditable purpose.
The supply of the floor space to the entity is a taxable supply, paying the rent is consideration for the supply and the entity is registered for GST. As such, the entity makes a creditable acquisition under section 11-5 of the GST Act.
Therefore, the entity is entitled to an input tax credit under section 11-20 of the GST Act for the rental expenses when renting floor space to carry on its enterprise.
Date of decision: 4 December 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-5
section 11-5
subsection 11-15(1)
section 11-20
Keywords
Goods & services tax
GST supplies & acquisitions
Creditable acquisition
Creditable purpose
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 4 December 2001 | Original statement | |
| You are here → | 2 December 2005 | Archived |