GST and postponement of attribution of an input tax credit

Can the entity, a business operator, attribute an input tax credit for a creditable acquisition to a tax period that is later than the tax period in which the entity first held a tax invoice for that acquisition, under section 29-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Yes, the entity can attribute an input tax credit for a creditable acquisition to a tax period that is later than the tax period in which the entity first held a tax invoice for that acquisition, under section 29-10 of the GST Act.

The entity is a business operator that is registered for goods and services tax (GST) and accounts for GST on a cash basis.

The entity made a creditable acquisition and provided all of the consideration for the acquisition in the one tax period. The entity did not receive the tax invoice for the acquisition until the next tax period.

The entity's GST return for the tax period in which the tax invoice was received did not take into account the input tax credit for that creditable acquisition.

Section 29-10 of the GST Act sets out the requirements for the attribution of input tax credits for creditable acquisitions.

If an entity accounts for GST on a cash basis and provides all of the consideration for a creditable acquisition in the one tax period, the input tax credit for that acquisition is attributable to that particular tax period (paragraph 29-10(2)(a) of the GST Act).

The entity made a creditable acquisition and provided all of the consideration for that acquisition in the one tax period. As the entity accounts for GST on a cash basis, the input tax credit for that acquisition is attributable to that particular tax period.

However, the entity did not receive the tax invoice for the acquisition until the next tax period, which was after all of the consideration for the acquisition was provided.

Paragraph 29-10(3)(a) of the GST Act provides that if an entity does not hold a tax invoice for a creditable acquisition when it submits its GST return (Business Activity Statement) for the tax period to which the input tax credit on the acquisition would otherwise be attributable, the input tax credit is not attributable to that particular tax period. Rather, the input tax credit is attributable to the first tax period for which a GST return is lodged at a time when the entity does hold the tax invoice for that acquisition (paragraph 29-10(3)(b) of the GST Act).

Therefore, it would appear that the input tax credit for this acquisition is attributable to the tax period in which the tax invoice is received.

However, when the entity received the tax invoice for the creditable acquisition, it did not take into account the input tax credit for this acquisition when lodging its GST return for that tax period.

Paragraph 29-10(4)(a) of the GST Act provides that where an entity lodges a GST return for a tax period referred to in paragraph 29-10(3)(b) of the GST Act and it does not take into account an input tax credit that is attributable to that tax period, the input tax credit is not attributable to that tax period. Rather, the input tax credit is now attributable to the first tax period for which the entity lodges a GST return that does take the input tax credit into account (paragraph 29-10(4)(b) of the GST Act).

The entity did not take into account the input tax credit on the creditable acquisition when lodging a GST return for the tax period in which the tax invoice was first held. Due to the operation of subsection 29-10(4) of the GST Act, the entity can attribute the input tax credit to a tax period that is later than the tax period in which the entity first held a tax invoice for that acquisition.