GST core
Time limit for GST credits
There is a time limit for claiming GST credits, generally four years from the due date of the BAS for the period in which the credit could first have been claimed.
You cannot claim a GST credit forever. The GST law sets a time limit within which you must claim a credit for a purchase, and if you miss it, the credit is lost. The general rule is that you have four years to claim, counted from the due date for lodging the BAS for the tax period in which the credit first arose. This applies to ordinary credits for business purchases and also to many adjustments.
The practical effect is that you can often go back and claim a credit you missed, as long as you are inside the four year window. For example, if you find an old tax invoice from two years ago that you never claimed, you may be able to claim it on a current BAS, provided the purchase was for a creditable purpose and you hold a valid tax invoice. You report it on the current BAS or revise an earlier statement, following the ATO's guidance.
The four years run from the date the BAS for the relevant period was due, not from the date of the invoice or the date of payment. A credit that first arose in a period with a due date four years ago is close to the limit, while one from a more recent period has more time. If a BAS was lodged late, the due date still decides the clock, not the lodgment date.
Keeping good records helps you use the full period. A well-run accounting system with receipts attached to each transaction makes it much easier to catch missed credits during a review. The same records also allow you to respond to any questions from the ATO. Remember that you must generally keep records for five years, which is slightly longer than the claim period, so documents are available if the claim is questioned.
Common misunderstandings include thinking that you must claim a credit in the exact BAS for the period of the purchase, or that you can claim credits without any limit. You are generally expected to claim in the right period, but a late claim within four years is usually possible. Another is thinking that the time limit applies only to refunds, whereas it applies to credits in general. The time limit also does not extend if the ATO is slow to process your claim.
If you have older invoices that you think could still be claimed, check the dates and confirm the position before lodging. This content is general information only, so confirm the correct time limit for your circumstances with the ATO or a registered tax professional.
Worked example
In October, a registered business finds an unclaimed tax invoice for $2,200 including GST ($200 GST) for equipment bought three years earlier, with a valid tax invoice and creditable purpose. The due date for the BAS for that period was about three years ago, so it is inside the four year limit. The business can claim the $200 credit on a current BAS or by revising the earlier statement.
Practical tips
- Review old invoices once a year to catch missed credits, as long as they are still within four years of the relevant BAS due date.
- Keep the records for at least five years, which covers the claim period and gives you a buffer.
- Calculate the cut-off date for older invoices before you lodge, so you do not spend time preparing a claim that is out of time.