Hiring & Leasing
20/03/1974
Query
Accounting for VAT on new leases of large-scale capital equipment.
Decision
On application on a case-by-case basis, VAT on new leases of large-scale capital equipment may be accounted for by the lessor at the commencement of the lease and the lessee may be invoiced for the VAT in one lump sum. The lessee may take full input credit at this time. This concession is subject to the condition that tax will be accounted for on the "invoice" basis.
Value Added Tax
Section 3 (1)(b), Value Added Tax Act, 1972
Origin: Indirect Taxes Policy and Legislation
File ref:A/73 (b)