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Special Allowable Amounts (G10/11)

There are special rules for the amounts allowable at Labels G10 and G11.

Purchases of second-hand trading stock from unregistered persons:

If the business buys second-hand goods for trading stock for the business or other enterprise and there is no GST included in the price paid for those goods (for example, the goods may have been purchased from a person who is not registered for GST), include the amount paid or payable even though there was no GST included in the amount paid for the goods.

To claim a credit for second-hand trading stock, a record showing the name and address of the supplier is required, as well as a description of the goods, including the quantity, the date of purchase and the amount paid or payable.

If more than $300 was paid for the second-hand goods, a credit can be claimed only when the goods are sold and GST is charged on the sale. This means that the amount paid for second-hand goods needs to be included in the activity statement for the tax period in which the business sold the goods. If the goods were sold for less than what was paid for them, include only an amount equal to the sale price.

If $300 or less was paid for the second-hand goods, include the amount paid on the activity statement for the tax period in which it was paid.

Alternatively the business can choose to not include the amount paid on the activity statement until the goods are sold, as for goods where more than $300 was paid.

If the business does not account for GST on a cash basis, include the total purchase price on the activity statement for the tax period in which any of the consideration is paid or an invoice is issued.

A special method of working our second-hand goods credits applies if the business buys second-hand trading stock which is divided into a number of sales, for example in the case of motor vehicle dismantlers. The effect is that GST is paid on the sales only after the business has used up all of the credits for these goods.

For more information contact the ATO on 13 24 78.

Refunds for returnable containers: If the business pays a refund on returnable containers to unregistered persons, there will be no GST included in the refund that the business pays.

However, the business can claim a credit when it sells the containers and charges GST on the sale. This means that the amount paid as refunds for the containers needs to be included at Label G11.

Insurance premiums: Credits can be claimed only if GST has been included in the insurance paid or are required to be pay to the insurance company. Generally, GST will be charged on insurance policies other than life insurance and health insurance policies.

For compulsory third party motor insurance premiums paid before 1 July 2003, the amount of the insurance premium cannot be included in the purchases of the business.

Long-term accommodation in commercial residential premises: If the business has an expense relating to accommodation for a period of 28 days or more in a hotel, motel, inn, hostel, boarding house, caravan park, camping ground or similar commercial residential premises for the purposes of its enterprise and GST was included in the amount paid (or are liable to pay if accounting on a non-cash basis), there is a special method of calculating the amount of this expense to show at Label G11.

Include an amount equal to the amount of GST shown on the tax invoice multiplied by eleven, instead of the amount actually charged for the accommodation.

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