Also called: Input tax credit, GST credit
GST on an asset purchase
GST on an asset purchase is the goods and services tax included in the price of business equipment or vehicles, which a GST-registered business may be able to claim as an input tax credit. The timing of the claim depends on the finance structure and whether you account on a cash or accruals basis.
What is a gst on an asset purchase?
GST on an asset purchase is the goods and services tax included in the price of business equipment or vehicles, which a GST-registered business may be able to claim as an input tax credit. The timing of the claim depends on the finance structure and whether you account on a cash or accruals basis.
Example
On a $110,000 machine including $10,000 GST bought under a chattel mortgage, a registered business may claim the $10,000 credit on its next BAS.
Why it matters
Structure choice changes when the credit can be claimed, which affects cash flow in the first quarter after purchase.