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Edited version of your private ruling
Authorisation Number: 1012617354775
Ruling
Subject: GST and claiming reduced input tax credits during administration of liquidation of a company
Issue:
The Commissioner was asked to rule on the following issue.
Question
Are the various services acquired by the administrators and Liquidators of an incapacitated company, from a third party reduced credit acquisitions (RCAs) of debt collection services under Item 17 of Regulation 70-5.02 (Item 17) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)?
Answer
To the extent that services acquired during the period of the Voluntary Administration in relation to client debtors, the acquisitions are not a RCA under Item 17. Accordingly a reduced input tax credit is not available. During this period the acquisitions related to identification and quantification of debts of client debtors and not their collection or recovery.
To the extent that the services acquired relate to the recovery of debts from client debtors in the liquidation period, the acquisitions will qualify as a RCA under Item 17. To this extent a reduced input tax credit is available.