What are the GST implications if the recipient defaults in making payment under the agreement and the financier repossesses the goods?
Where the financier and recipient account for GST on a non-cash basis they may be required to make adjustments pursuant to Division 19 of the GST Act. The adjustments will be in respect of the GST previously paid and the input tax credits already claimed. The financier will be required to make a decreasing adjustment and the recipient an increasing adjustment. Where they account on a cash basis there may not be any GST implications. Any subsequent sale, lease or hire purchase agreement in respect of the repossessed goods will be treated as a new transaction and 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 the GST implications if the recipient defaults in making payment under the agreement and the financier repossesses the goods?
