GST and attribution of input tax credits on creditable importations

Does the entity, a business operator, attribute the input tax credit for a creditable importation, under subsection 29-15(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), to the tax period in which the goods and services tax (GST) on the importation was paid, even though the entity does not pay its overseas supplier for the goods until the entity on-sells the goods in Australia?

Yes, the entity does attribute the input tax credit for a creditable importation, under subsection 29-15(1) of the GST Act, to the tax period in which the GST on the importation was paid, even though the entity does not pay its overseas supplier for the goods until the entity on-sells the goods in Australia.

The entity is a business operator that accounts for GST on a cash basis. The entity makes a taxable importation under subsection 13-5(1) of the GST Act. The entity pays the goods and services tax (GST) on the importation at the time of the importation, in accordance with paragraph 33-15(1)(a) of the GST Act. The importation is also a creditable importation for which the entity is entitled to an input tax credit under section 15-15 of the GST Act.

The entity does not pay its overseas supplier for the goods until the entity subsequently sells the goods in Australia.

The entity has not entered into the deferred GST payment scheme for taxable importations.

The entity is registered for GST.

Under subsection 29-15(1) of the GST Act, an entity must attribute an input tax credit for a creditable importation to the tax period in which the entity pays the GST on the importation.

However, if paragraph 33-15(1)(b) of the GST Act applies to the payment of the GST on the importation, the input tax credit is attributable to the tax period in which the liability for the GST arose (subsection 29-15(2) of the GST Act).

Paragraph 33-15(1)(b) of the GST Act refers to a scheme the entity may have entered into under the A New Tax System (Goods and Services Tax) Regulations 1999 to defer the GST payable on an entity's taxable importations. The entity has not entered into such a scheme, and therefore, paragraph 33-15(1)(b) of the GST Act does not apply to the payment of the GST on the importation.

The entity has paid the GST on the importation at the time of the importation. Therefore, under subsection 29-15(1) of the GST Act, the entity attributes the input tax credit on the creditable importation to the tax period in which the importation was made. [Note: The fact that the entity does not pay its overseas supplier for the goods until the entity subsequently sells them does not effect the attribution of the input tax credit for a creditable importation, even where an entity accounts for GST on a cash basis.]