Under a Commercial Hire Purchase agreement, GST is payable on the purchase price of the vehicle and also on all term charges and any fees. These GST charges are payable upon settlement of the contract, and can either be added to the loan or paid up-front. Businesses using either the Cash or Accruals accounting method (and registered for GST) can claim the GST paid on the purchase price of the vehicle up-front when they lodge their next BAS. Additionally, the GST charged on the interest (term charges) and any fees can be claimed back as Input Tax Credit progressively over the life of the loan. Where the vehicle is used for business purposes, the hirer can claim depreciation up to the Depreciation Limit and interest charges on the contract as a tax deduction.