Announcements
The JobKeeper Payment scheme finished on 28 March 2021. Find out what this means for your business.

ATO Community

Re: Claiming GST on purchases

Devotee

Views 125

Replies 4

Hi , Please assist 

 

A business registers for GST in July 2020. It incurred an expense (GST inclusive) in April 2020 prior to getting registered for GST.

 

The expense was only paid in October 2020 and the BAS reproting method is Cash and income tax on accrual basis.

 

Is the business eligble to claim GST on the expense in the October BAS ?

 

Note : if  Yes, then  its income tax reported for 19-20 FY would be  incorrect as the  deductible expense at that time was the entire cost.

 

Thank you

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hello @Joachim


It does not matter if you were not registered for GST at the time the invoice is issued, you were registered for GST at the time the invoice was paid. As you are on a cash basis, you can claim any GST credit in the period it is paid.


TonyATO

4 REPLIES 4

ATO Community Support

Replies 3

Hello @Joachim

 

If you account for income tax on an accruals basis, then you would claim a deduction for the purchase (minus the GST) in the 2020 financial year as this is when the invoice was issued.

 

If you account for GST on cash basis, you can claim the GST credit in October (or any BAS within 4 years), as this is when the GST was paid.

 

It sounds like you've done the right thing Smiley Happy

 

TonyATO

Devotee

Replies 2

Hello @TonyATO 

 

Thanks for the reply but the invoice was received in April ( 19-20 FY) and the GST claim ( if allowed) is to be made in October 2020  ( 20-21) FY.

 

It would have been perfectly fine if the business was registered for GST by 2020 April .

 

It only registered in July 2020 ( effective from that date onwards and not backdated).

 

So  in the 19-20 financials the invoice was  not recorded as net of GST.( No GST recognised)

 

Please assist thank u

Most helpful response

ATO Community Support

Replies 1

Hello @Joachim


It does not matter if you were not registered for GST at the time the invoice is issued, you were registered for GST at the time the invoice was paid. As you are on a cash basis, you can claim any GST credit in the period it is paid.


TonyATO

Devotee

Replies 0

@TonyATO Thank you