GST Hire Purchase and Lease Payments

The original indication by the Tax Office was that a business could claim the GST at the time of purchase on the purchase of plant which was financed on Hire Purchase.

This is the position now
Hire Purchase
Accruals Basis for GST: you may claim the GST Input Credit at the time of purchase. You include the cost of the plant including GST at G10, monthly payments are not included in the BAS thereafter.

Cash Basis for GST: you claim the GST component of the monthly repayments, therefore the GST is claimed over the period of the loan.

You include the monthly repayments at G10 including the GST portion thereby claiming the GST in each BAS.

Our important advice
Before buying any Plant & Equipment you should contact our office to clarify both the financial, taxation, and GST position that the purchase would place you in, and if finance is needed we can help you in that area as well.