The way you claim GST credits differs for Purchases for $300 or less and Purchases for more than $300.
In order to claim GST credits, there are Records you need to keep.
Purchases for $300 or less
If you account on a non-cash basis and you purchase second-hand goods for $300 or less, you can claim the GST credit for the purchase in the reporting period when you first made a payment or received an invoice for the purchase.
This does not apply if you choose to claim your credit in the reporting period in which you sell your goods.
If you account on a cash basis, you can claim the GST credit in each of the reporting periods that you paid for the purchase.
Report the amount of the GST credit at 1B (GST credits) on your activity statement.
Using the same rules, report amounts for purchases at G11 (non-capital purchases) on your activity statement.
See also:
- GST definitions: payment
Purchases for more than $300
You must wait until you sell the item you have purchased to claim the GST credit if you paid, or are liable to pay, more than $300 for the second-hand item you purchased. You can also choose to wait until you sell the item before claiming your GST credit even if you pay $300 or less for the second-hand item.
If you account on a non-cash (accruals) basis you can claim the GST credit for the second-hand item you purchased in the reporting period you first:
- receive any part of the payment for the sale of the item
- issue an invoice for the item you sold.
If you account on a cash basis, you can claim the GST credit for the purchase in each reporting period you receive a payment for the sale of the item.
Using the same rules, you report amounts for purchases at G11 (non-capital purchases) on your activity statement.
Report at 1B (GST credits) the lesser of:
- one-eleventh of the amount you paid or are liable to pay to purchase the goods
- the amount of GST in the price of the item when sold.
Report at G11 (non-capital purchases) on your activity statement the lesser of:
- the amount you paid, or are liable to pay, to purchase the goods
- the amount you are due to receive when you resell the goods.
If you use the calculation worksheet method, do not report any amount at G14 (acquisitions with no GST in the price).
Records you need to keep
In order to claim a GST credit, you must have the appropriate documentation. Although a tax invoice is not required, you must keep a record containing:
- the name and address of the seller of the goods
- a description of the goods (including their quantity)
- the date that you purchased the goods
- the amount you paid for the goods.