What are the GST implications if a hire purchase agreement is restructured during the currency of the agreement, where the outstanding balance is refinanced as a new hire purchase agreement?
Where the financier and recipient account for GST on a non-cash basis, they may be required to make adjustments under Division 19 of the GST Act. The financier would be required to make a decreasing adjustment and the recipient an increasing adjustment. • There would be an adjustment where the credit component was originally disclosed and the principal component has changed. • However, there is no adjustment if the restructured agreement relates only to a change to the credit component and the credit component was originally disclosed. Where the financier and recipient account on a cash basis there may not be any GST implications. In respect of the new hire purchase agreement the normal GST rules will apply.
Related Questions
- What are the GST implications if a hire purchase agreement is restructured during the currency of the agreement, where the outstanding balance is refinanced as a new hire purchase agreement?
- What are the GST implications if a hire purchase agreement is terminated during its currency, by the financier granting a loan with title passing to the recipient?
- What are a Commercial Hire Purchases tax & GST implications?
