If I purchase an item through a hire purchase arrangement do I have any Goods and Services Tax (GST) obligations?

• The answer will depend on a number of factors.
• For agreements entered into before 1 July 2012 you will have to pay GST on the total purchase price if the seller does not separately identify and disclose the interest charge to you. You may be able to claim a GST credit if the items were for a business use.

• According to the Australian Tax Office (ATO) the seller discloses the interest charge to the buyer if he or she tells you any of the following in the hire purchase agreement:

• the dollar amount of the credit charge;
• the interest rate;
• the formula or formulas used to work out the credit charge amount; or
• any other information enough to work out the credit charge amount.

• For agreements entered into on or after 1 July 2012 all parts of the hire purchase agreement will be subject to GST regardless of whether the seller disclosed the interest charge to the buyer. GST will also have to be paid on any associated fees and charges such as late payment fees.