In certain circumstances you can claim a GST credit for the full amount of GST included in the price of a car even if the car costs more than the car limit. If Darren planned to use the car only 50% in carrying on his business, he would report $30,366 at label G10 and include a GST credit of $2,760 (50% of $5,521) at label 1B.ĭarren cannot claim a credit for the luxury car tax paid on the car.
As the car limit for the 2021–22 financial year is $60,733, the maximum GST credit Darren can claim is $5,521 (1/11 × $60,733).ĭarren reports $60,733 at label G10 on his activity statement and includes a GST credit of $5,521 at label 1B. Darren plans to use the car 100% in carrying on his business. If you use the calculation sheet method to work out your GST amounts, use the calculation sheet to work out how much to include at label 1B.ĭarren purchases a new car for $93,654.40 (including $8,000 GST and $5,654.40 luxury car tax) on 12 July 2021.
If you use the accounts method to work out your GST amounts, include one-eleventh of the car limit (or the proportion that relates to your business use) at label 1B (GST on purchases). If you purchase a car with a price that is more than the car limit, you include only the amount of the car limit (or the proportion of the car limit relating to business use) at label G10. This limit also applies to cars which are fuel efficient. Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of that limit. The car limit is used to calculate depreciation deductions under the income tax law. Special rules apply for cars with a value exceeding the car limit. Purchasing a car for more than the car limit