TaxTMI 
TaxTMI 
INPUT CREDIT OF GST COLLECTED BY GOVERNMENT BODY ON FINES AND PENALTIES LEVIES FOR DELAY IN SUBMISSION OF FORMS.
IS THERE ANY RESTRICTION FOR CLAIMING GST INPUT IN THIS CASE
INPUT Credit
18 May 2018 
8 Replies 
1463 Views Asked by
Input tax credit on penalties is barred where the payment is not a supply; test supply characterisation and invoice compliance.
Input tax credit on penalties or late fees paid to a regulatory body is generally unavailable where the payment does not constitute a supply in the course or furtherance of business; adjudicated penalties as sanctions are treated as non-creditable. Entitlement depends on factual and documentary elements: whether the payment can be characterised as consideration for a supply, whether an invoice reflecting a taxable supply exists, and whether statutory conditions for claiming credit (tax charged and return compliance) are met. (AI Summary)
Input tax credit on penalties or late fees paid to a regulatory body is generally unavailable where the payment does not constitute a supply in the course or furtherance of business; adjudicated penalties as sanctions are treated as non-creditable. Entitlement depends on factual and documentary elements: whether the payment can be characterised as consideration for a supply, whether an invoice reflecting a taxable supply exists, and whether statutory conditions for claiming credit (tax charged and return compliance) are met. (AI Summary)