In September 2016, client's entity purchased a luxury car and claimed GST on luxury car limit $57,581. Car was purchased with $100,000, GST claimed was $5,234.64. Client is registered annual GST. In 2020 EOY, client want to deregister GST on 30 June 2020 (MV is still within adjustment period). I've checked the ATO website QC16374 " Motor vehicles held when your GST registration is cancelled", increasing adjustment using market value times % of business use and divided by 11, that's GST payable amount needs to be adjusted before GST is cancelled. My questions are:
1./ If the % of business use is NIL, does it means no GST payable to be adjusted in final GST report before it's de-registered? I don't believe so, but based on the formula, it looks like GST payable is zero. (FBT is paid every year)
2./If the % of business use is not NIL (100% for business as an example), but the market value of the car at the point when GST is cancelled is $80,000, this means GST payable of adjustment is over what the entity claimed in 2016 $5,234.64. Is GST payable $5,234.64 or $7,272.73?
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