Private ruling: GST and GST credit for purchase of second-hand goods
Date of advice: 1 October 2015
Published: March 2016

Ruling: Q1: Based on the information provided to the Australian Taxation Office, are you entitled to claim input tax credits (ITCs) under Division 66 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) where you acquire second-hand goods for the purposes of sale or exchange (but not manufacture) from individuals who are neither registered for GST nor required to be registered for GST? | A1: Yes, you are entitled to claim an ITC under Division 66 of the GST Act where you acquire second-hand goods for the purposes of sale or exchange (but not manufacture) from individuals who are neither registered for GST nor required to be registered for GST. | Q2: If the answer to question 1 is yes, is the ITC to be calculated as 1/11 of the purchase price paid to the unregistered individual supplier? | A2: Section 66-10 of the GST Act provides that the amount of the ITC is 1/11 th of the consideration payable on the second-hand goods. However, if the consideration is more than $300, the credit cannot be more than the amount of GST charged when the goods are sold.




Subject: GST and GST credit for purchase of second-hand goods: In order to protect the privacy and commercial in-confidence components of this private binding ruling the following summary is provided