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GST; Input Tax Credits; Unregistered Supplier (post supply)

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Consider a hypothetical situation where a supply of services has been made to you in Timeframe A. Subsequently, the supplier ceases to exist and ceases to be registered for GST. Let’s call the supplier’s post-registration Timeframe B.

 

You are a purchaser who purchased X from the supplier in Timeframe A, when they were registered. You have a court case with the supplier in Timeframe B, disputing the price of the supply made in Timeframe A, where the settlement price increases the consideration for the supply. The GST on the supply made in Timeframe A has now increased because the consideration for the taxable supply has been settled as a larger amount than previously.

 

You wish to claim an income tax credit from that purchase for the extra GST you are now having to pay.

 

  1. Since the settlement price is referable to the taxable supply in Timeframe A, does liability arise for the extra GST resulting from the increase in consideration due?
  2. Can the (now unregistered) supplier issue an adjustment note?
  3. Can you claim an input tax credit when the supplier is no longer registered for GST?

 

 I could not find any relevant rulings, except for GSTR 2013/2, GSTR 2000/19 and GSTR 2001/4. Allegedly, entitlement to input tax credits does not depend on the supplier being registered. However, how would a claim be made as a matter of practical reality?

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ATO Certified Response

Community Support

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Hi @LucyB,

 

Thanks for getting in touch!

 

As we can provide general information here on our Community, however we'd need more information to provide a more tailored reposnse and we cannot provide advice on hypotheticals.

 

If the situation relates to you or a client and you'd like a more tailored response, you can write to GSTmail@ato.gov.au and provide detailed information about the situation to receive a response.

 

Thanks, JodieH.

1 REPLY 1

Most helpful response

ATO Certified Response

Community Support

Replies 0

Hi @LucyB,

 

Thanks for getting in touch!

 

As we can provide general information here on our Community, however we'd need more information to provide a more tailored reposnse and we cannot provide advice on hypotheticals.

 

If the situation relates to you or a client and you'd like a more tailored response, you can write to GSTmail@ato.gov.au and provide detailed information about the situation to receive a response.

 

Thanks, JodieH.