The Tax Office generally advises that contracts should include clauses that:
- Recognise whether the contract price is inclusive or exclusive of GST
- Clarify if GST has been determined with reference to the margin scheme
- Limit the liability of either party if GST was later found to be incorrect
- The purchaser tried to recover the GST component from the vendor after the purchaser's claim of input tax credits was disallowed by the Tax Office (residential property has no GST)
- The contract clearly stated the price was GST inclusive, although the vendor had not remitted GST to the Tax Office; and
- The court held that no implied terms and conditions could be read into the contract for the purpose of rectification and a claim to recover the GST was denied. To access an overview of the case, click here.
The Tax Office provides a 'Property contract and tax invoice – GST checklist' that deals with GST and property contracts which can be accessed here. The Tax Office further states that in order to claim GST, a valid tax invoice is required.