WHAT IS THE EFFECT OF GST ON A NOVATED LEASE?
GST is payable on the sale of a new and second hand vehicles, with the exclusion of private sales. What occurs with a leased vehicle is that it is sold to Interleasing and we then lease the vehicle on to you. We pay the full amount of the sale price of the vehicle to the supplier who then pays the GST component of the vehicle to the ATO. As GST cannot be paid twice on the same transaction to the ATO, we can claim the GST component that we have paid to the supplier back from the ATO. The refund of the GST is known as an Input Tax Credit (ITC). As a result of the claiming of an ITC, we lease to you the vehicle at the full sale price less the GST component, if applicable. The ITC is capped to a maximum amount of $5,182.64. In addition to the GST on the sale price of the vehicle, GST is payable on your Lease and Operating Costs including: Lease Rental Fuel Maintenance Tyres Insurance Management Fees Sundry Expenses Through an Interleasing Novated Lease, the GST on these Lease and Operating
