Private ruling: Entitlement to claim an input tax credit in relation to the purchase of a property
Date of advice: 30 March 2020
Published: May 2020
Date scheme commenced: The date of issue

Ruling: Q1: Is there an entitlement to claim an input tax credit for the purchase of a property? | A1: No.


Relevant legislative provisions: A New tax System (Goods and Services Tax) Act 1999 section 11-5 | A New Tax System (Goods and Services Tax) Act 1999 section 9-5

Reasons for decision: Summary: Under section 11-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you make a creditable acquisition if the supply of the thing to you was a taxable supply. Under section 9-5 of the GST Act, a supply is a taxable supply if the supplier of the item is registered or required to be registered for GST. The entity purchased the property, with settlement occurring on XXX, for $$$$. The GST section of the contract was not completed and where it is not completed the general condition 19 of the contract applies. In summary, general condition 19 provides that unless it is stated that the price includes GST (if any) then no GST applies to this sale. A tax invoice was not issued in relation to the sale of this property. Based on the information available in the Australian Business Number (ABN) systems the vendor of the property was not registered or required to be registered at the date of settlement. As a result, the sale of the property was not a taxable supply and the entity has no entitlement to claim input tax credits in relation to the purchase of the property. | Detailed Reasoning - Conclusion: Based on the above facts and information available, the sale of the property to the entity was not a taxable supply, the contract of sale did not include GST in the purchase price. Therefore, the entity is not entitled to claim an input tax credit in relation to the purchase of the property.

Relevant facts and circumstance: An entity has an Australian Business Number (ABN) and is registered for goods and services tax (GST), reporting on q quarterly basis. | The entity purchased a property at auction on XXXX with settlement occurring several months later. | The contract price of the property purchase was $$$ | No tax invoice was issued in relation to this sale.