Private ruling: GST and claiming reduced input tax credits during administration of liquidation of a company
Published: April 2014

Ruling: Q1: Are the various services acquired by the administrators and Liquidators of an incapacitated company, from a third party reduced credit acquisitions (RCAs) of debt collection services under Item 17 of Regulation 70-5.02 (Item 17) of the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations)? | A1: To the extent that services acquired during the period of the Voluntary Administration in relation to client debtors, the acquisitions are not a RCA under Item 17. Accordingly a reduced input tax credit is not available. During this period the acquisitions related to identification and quantification of debts of client debtors and not their collection or recovery. To the extent that the services acquired relate to the recovery of debts from client debtors in the liquidation period, the acquisitions will qualify as a RCA under Item 17. To this extent a reduced input tax credit is available.




Issue: The Commissioner was asked to rule on the following issue.