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?
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, in relation to the termination of the agreement. The financier will be required to make a decreasing adjustment and the recipient an increasing adjustment. Where they account on a cash basis there will be no GST implications. In relation to the subsequent sale and the loan provided by the financier, 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?
- When will liability for GST arise for the financier of goods in a hire purchase agreement ?
