Hi there,
I have a corporate client ('A') who had around $60-$70k unclaimed GST on purchase for few years.
However, these invoices were addressed to another company ('B') owned by the same director. And these invoices were paid by the director's own account rather than paid by company's accounts. But the description in invoices were all related to 'A' company.
Can we claim back these GST on purchase amount in next quarter's BAS?
Hi @ZixinD
GST credits can only be claim on a valid tax invoice.
Where an invoice contains incorrect or incomplete information it is not a valid tax invoice.
In this instance the information is incorrect your client would need to ask the supplier to replace the invoice with an amended tax invoice showing the correct purchaser details.
Check out our When you can claim a GST credit page for further info.
We also have similar post relating to this one, you can find them under Incorrect Buyer Details on Invoice over $1000 and can we claim gst for tax invoice showing employee name.
Hi @ZixinD
GST credits can only be claim on a valid tax invoice.
Where an invoice contains incorrect or incomplete information it is not a valid tax invoice.
In this instance the information is incorrect your client would need to ask the supplier to replace the invoice with an amended tax invoice showing the correct purchaser details.
Check out our When you can claim a GST credit page for further info.
We also have similar post relating to this one, you can find them under Incorrect Buyer Details on Invoice over $1000 and can we claim gst for tax invoice showing employee name.
No they can not because it is not a creditable acquistion to them. A separate response will be posted soon explaining why, after the ATO have reviewed my in detail response @ZixinD
Your answer is wrong as yoiu have misread the question, this does not have anything to do with an incorrect invoice.
This is about one entity trying to claim the GST credits of another entity.
Entity B can not claim the GST of entity A even if they have the same director because it is not a creditable acquisition to Entity B.
No, this other company or any other entity can not claim back the GST because it is not a creditable acquistion to them.
To claim back GST it has to be a creditable acquisition ( ANTS GST ACT 1999 - SECT 11.5) and meet ALL of the following criteria:
(a) you acquire anything solely or partly for a * creditable purpose; and
(b) the supply of the thing to you is a * taxable supply; and
(c) you provide, or are liable to provide, * consideration for the supply; and
(d) you are * registered, or * required to be registered.
This other company even though it has the same director is a totally seperate entity and it is not a taxable supply to them, and they have not provided consideration for the supply, so they fail that test.
Why did the original company not claim that GST when they could have and the answer is probably becuase it is no longer operating or in liquidation and they do not want any other party taking those credits.
This is not a question of "incorect buyer details", and if this other company approaches that supplier to change the invoice details they would both be making false or misleading statements to the extent they could be prosecuted as well.
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