You must be registered for GST to claim GST credits.
You can claim a credit for any GST included in the price you pay for things that you use in your business. This is called a GST credit (or input-tax credit, a credit for the tax included in the price of your business inputs).
You claim GST credits in your activity statement.
You can claim GST credits if the following four conditions apply:
- you intend to use your purchase solely or partly in carrying on your business and the purchase does not relate to making input-taxed supplies
- the purchase price included GST
- you provide, or are liable to provide, payment for the item you purchased
- you have a tax invoice from your supplier (for purchases more than $82.50).
A four-year time limit applies.
GST and purchases for private use
If you purchase goods or services to use for both business and private use, you can only claim a GST credit for the part of the purchase relating to your intended business use.
If you later find your actual use differed from your intended use, you may need to adjust the amount of GST credits you have claimed.
If you are a small business, you may be able to account for the private portion of your business purchases once a year, rather than each time you lodge an activity statement. To do this you need to make an annual ‘private apportionment election’.
When you need a tax invoice
You must have a tax invoice to claim a GST credit for purchases that cost more than $82.50 (including GST).
Your supplier has 28 days to provide you with a tax invoice after you request one. Wait until you receive it before you claim the GST credit, even if this is in a later reporting period.
When a tax invoice is incomplete
An invoice containing incorrect or incomplete information is not a valid tax invoice. You may be able to treat it as a tax invoice if it is missing information that can be obtained from other documents the supplier has given you. Alternatively, you can ask your supplier to replace it with a complete and correct tax invoice. The Commissioner can also treat an incomplete document as a tax invoice.
When you don’t receive a tax invoice
If your supplier does not respond to your request for a valid tax invoice within the 28-day period and you haven’t been able to find the missing information from other documents, you can seek our permission to claim the GST credit.
To request permission to claim the credit, either:
- email us at GSTmail@ato.gov.au
- write to us at
Australian Taxation Office
PO Box 3524
ALBURY NSW 2640
Small purchases
To claim a GST credit for purchases that cost $82.50 or less (including GST), you should have one of the following:
- a tax invoice
- a cash register docket
- a receipt
- an invoice.
If you can’t get one of these, keep a record of the purchase, such as a diary entry with the name and ABN of the supplier, the date of purchase, a description of the items purchased, and the amount paid.
How to work out a GST credit
If your tax invoice does not specify the amount of GST included in the price of your purchase and only states that the price includes GST, you can work out the GST amount yourself by dividing the price by 11. The answer is the amount of GST credit you can claim (provided you use the item wholly for business purposes).
For purchases that you use both for business and private purposes, you can claim a GST credit for the portion you use for business purposes. For example, if 50% of your use of the purchased item is for business purposes, you can claim a credit of 50% of the GST you paid.
If you account on a cash basis and have not fully paid for a purchase, you can claim a GST credit only for the GST included in the amount you have paid. (For more information, refer to Choosing an accounting method).
When you have worked out your total GST credits, you can offset them against the amount of GST you are liable to pay to us. If your GST credits are greater than the amount you are liable to pay, you’re entitled to a refund.