A New Tax System (Goods and Services Tax) Act 1999

Chapter 4 - The special rules  

Part 4-4 - Special rules mainly about net amounts and adjustments  

Note:

The special rules in this Part mainly modify the operation of Part 2-4 , but they may affect other Parts of Chapter 2 in minor ways.

Division 131 - Annual apportionment of creditable purpose  

Subdivision 131-B - Consequences of electing to have annual apportionment  

131-40   Input tax credits for acquisitions that are partly creditable  

(1)    
The amount of the input tax credit on an acquisition that you make that is *partly creditable is an amount equal to the GST payable on the supply of the thing acquired if:

(a) an *annual apportionment election that you have made has effect at the end of the tax period to which the input tax credit is attributable; and

(b) the acquisition is not an acquisition of a kind specified in the regulations.

(2)    
However, if one or both of the following apply to the acquisition:

(a) the acquisition relates to making supplies that would be *input taxed;

(b) you provide, or are liable to provide, only part of the *consideration for the acquisition;

the amount of the input tax credit on the acquisition is as follows:

Full input tax credit

×

Extent of non-input-taxed purpose

×

Extent of consideration

where:

extent of consideration
is the extent to which you provide, or are liable to provide, the *consideration for the acquisition, expressed as a percentage of the total consideration for the acquisition.

extent of non-input-taxed purpose
is the extent to which the acquisition does not relate to making supplies that would be *input taxed, expressed as a percentage of the total purpose of the acquisition.

full input tax credit
is what would have been the amount of the input tax credit for the acquisition if it had been made solely for a *creditable purpose and you had provided, or had been liable to provide, all of the consideration for the acquisition.

(3)    
In determining for the purposes of subsection (2) whether, or the extent to which, an acquisition relates to making supplies that would be *input taxed, subsections 11-15(3) to (5) apply in the same way that they apply for the purposes of paragraph 11-15(2)(a) .

(4)    
Determinations made by the Commissioner under subsection 11-30(5) apply (so far as they are capable of applying) to working out the extent to which a *partly creditable acquisition does not relate to making supplies that would be *input taxed.

(5)    
This section does not apply to an input tax credit on an acquisition if the acquisition is, to any extent, a *reduced credit acquisition.

(6)    
This section has effect despite sections 11-25 and 11-30 (which are about amounts of input tax credits).