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Ruling

Subject: tax invoice

Question

Does the draft invoice submitted by the receiver have all the information necessary, as per the GST legislation, for it to be considered as a tax invoice?

Answer

No, the draft invoice does not contain all the information necessary as per GST legislation for it to be considered as a tax invoice. It does not have the supplier's Australian Business Number (ABN).

Relevant facts and circumstances

You are a partnership registered for the goods and services tax (GST).

You are carrying on an enterprise of leasing real estate property.

You entered into a contract to purchase a property and the property was sold as vacant possession.

The property was sold to you by the receiver and manager appointed by the mortgagee in possession of the property in satisfaction of a debt.

The owners of the property were five individuals who were not registered for the GST.

You believe the property was previously leased by the owners to the operator of a commercial enterprise and the annual rent was less than $75,000.

The commercial enterprise was not operational at the time of the sale.

You believe that the property was previously a residential premises which was converted for the purpose of the operating the commercial enterprise.

Your intention is to use the property to conduct a commercial enterprise similar to the one which was carried on from the premises previously.

The receiver has informed you that the sale is a taxable supply and that even though the five individuals were not registered for the GST, they were required to be registered for the GST. Hence you were informed by the lawyer representing the vendor that the supply was a taxable supply.

You requested a draft of the invoice from the receiver as you wanted to test its validity as a tax invoice to enable you to claim input tax credit on the acquisition.

You have now submitted the draft invoice for the Australian Taxation Office (ATO) to comment on its validity as a tax invoice.

The draft invoice does not have the Australian Business Number (ABN) of the supplier.

Reasons for decision

Section 29-70 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states that a tax invoice is a document that complies with several requirements. Paragraph 29-70(1)(c)(i) states that the document that purports to be a tax invoice must be on an approved form which contains enough information to clearly ascertain the supplier's identity and the supplier's ABN.

In the draft invoice you have submitted, the ABN of the supplier is not provided. Consequently, the draft invoice in the form it is presented will not satisfy the requirements for it to be a tax invoice.

Subsection 29-70(1A) of the GST Act states that a document issued by an entity to another entity may be treated by the other entity as a tax invoice for the purpose of the GST Act if:

a. it would comply with the requirements for a tax invoice but for the fact that it does not contain certain information, and

b. all of that information can be clearly ascertained from other documents given by the entity to the other entity.

Please note that in the absence of any other document issued to you by the supplier that provides this information, you cannot treat the draft invoice provided to you by the supplier as a tax invoice.

Under subsection 29-70(2) of the GST Act, the supplier of a taxable supply must, within 28 days after the recipient of the supply requests it, give the recipient a tax invoice for the supply, unless it is a recipient created tax invoice. As the invoice is not created by the recipient in this instance, the supplier must, under the GST Act, provide you with a tax invoice that satisfies all of the requirements as specified in section 29-70 of the GST Act.

Please also note that for you to claim a GST credit for a purchase that cost more than $82.50 (including GST), you must be registered and you have a valid tax invoice. Also, the acquisition must be a creditable acquisition as defined in the GST legislation. If you use an incorrect or incomplete tax invoice to claim a GST credit, the GST credit may not be allowed.

We have enclosed the following fact sheets for your information:

Valid tax invoices and GST credits (NAT 12358-08.2011)

GST for small business (NAT 3014-12.2008)

These two documents provide more information on tax invoices and about claiming GST credits (input tax credits).