ATO Interpretative Decision
ATO ID 2001/582 (Withdrawn)
Goods and Services Tax
GST and entitlement to an input tax credit for a creditable acquisitionFOI status: may be released
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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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 business, 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 acquires goods?
Decision
Yes, the entity is entitled to an input tax credit under section 11-20 of the GST Act when it acquires goods.
Facts
The entity is a business. The entity acquires goods for use in the enterprise that it carries on. The supply of the goods to the entity is a taxable supply under section 9-5 of the GST Act. The entity holds a tax invoice for the acquisition. The entity provides consideration for the supply of the goods.
The entity is registered for goods and services tax (GST).
Reasons for Decision
An entity is entitled to an input tax credit under section 11-20 of the GST Act when it makes a creditable acquisition.
Under section 11-5 of the GST Act, an entity makes a creditable acquisition if:
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- it acquires anything solely or partly for a creditable purpose;
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- the supply of the thing to it is a taxable supply;
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- it provides, or is liable to provide, consideration for the supply; and
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- it is registered, or required to be registered for GST.
Under subsection 11-15(1) of the GST Act, an entity acquires a thing for a creditable purpose to the extent that it acquires the thing in carrying on its enterprise. The entity acquired the goods for use in the enterprise that it is carrying on and as such, the goods have been acquired for a creditable purpose.
Based on the above facts, the acquisition of the goods also satisfies the other requirements to be a creditable acquisition. In addition, as the entity holds a tax invoice, the requirement under subsection 29-10(3) of the GST Act, that it must hold a tax invoice for the acquisition to which it is entitled to claim an input tax credit, is also satisfied.
Therefore, the entity is entitled to an input tax credit under section 11-20 of the GST Act when it acquires goods.
Date of decision: 22 August 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
subsection 29-10(3)
Keywords
Goods & services tax
GST supplies & acquisitions
Creditable acquisition
creditable purpose
Taxable supply
ISSN: 1445-2782
| Date: | Version: | |
| 22 August 2001 | Original statement | |
| You are here | 13 September 2005 | Archived |