DB 2Goods and services tax

1. A registered person is denied a deduction for the following:

2. input tax on a supply of goods or services to them:
3. a flat-rate credit, as defined in section 2(1) of the Goods and Services Tax Act 1985:
4. goods and services tax (GST) payable by them to the Commissioner.

5. A registered person is allowed a deduction for deductible output tax but only to the extent to which—

6. they are allowed a deduction for expenditure that they incur in acquiring or producing the goods or services; or
7. they are allowed a deduction for an amount of depreciation loss for the goods or services.

8. For the purposes of subsections (1) and (2), an underlying supplier referred to in section 8C of the Goods and Services Tax Act 1985 who is not a registered person is treated as if they were a registered person for the purposes of this section in relation to a deduction for expenditure to the extent to which the expenditure is attributable to a supply of listed services. However, this subsection does not apply if the underlying supplier has received a flat-rate credit, as defined in section 2(1) of that Act, in an income year and has chosen as described in section CH 5B (Adjustments for certain flat-rate credits under platform economy rules) to include the amount of the credit in their income for the income year.

9. Subsection (2) does not apply to an adjustment made in relation to a capital asset.

10. The provisions that apply when an amount of depreciation loss is quantified by reference to the cost of an item of depreciable property to a person are in section EE 54 (Cost: GST).

11. The link between this section and subpart DA (General rules) is as follows:

12. subsection (1) overrides the general permission:
13. subsection (2) supplements the general permission; the general limitations still apply.