Claiming the GST credit on a big equipment purchase: getting the BAS timing right

A $66,000 machine includes $6,000 of GST. For a registered business, that $6,000 is usually coming back as a credit on the BAS. But “coming back” can mean four weeks or four months, depending on when in the quarter you buy and how you account for GST. On a big purchase, that gap is real money sitting with the ATO rather than in your account.

Can I claim the GST on business equipment?

The ATO sets out the conditions. In summary, you can generally claim a GST credit when:

• you’re registered for GST;
• the purchase is for your business;
• the price includes GST;
• you have paid, or will pay, for it; and
• you hold a valid tax invoice for purchases over $82.50.

You claim the credit on your BAS (or annual GST return). If you miss it, the ATO says you need to claim within the 4-year time limit.

When does the credit come back?

That depends on two things: your accounting basis and your reporting cycle.

Accounting basis	When you generally claim the credit
Cash	In the BAS period you pay (to the extent you’ve paid)
Accrual	In the BAS period you receive the invoice or pay, whichever is earlier

The ATO notes small businesses can account on a cash basis, which aligns GST with the money actually moving through the business. For quarterly lodgers, the due dates are 28 October, 28 February, 28 April and 28 July.

So a purchase paid on 28 September can be claimed in the July–September BAS, due 28 October. The same purchase paid on 2 October waits for the October–December BAS, due 28 February. That’s a four-month difference for the same machine.

How should I time a big purchase around the BAS?

A few practical principles:

1. Late in a quarter beats early in a quarter — you wait less for the credit.
2. Make sure the tax invoice is correct before you pay; a missing ABN or wrong details delays the claim.
3. Consider lodging promptly — if your BAS shows a refund, lodging early rather than on the due date brings the money back sooner.
4. Plan the gap — between paying the GST and receiving the credit, your cash is lighter by the GST amount.

That fourth point is where finance planning comes in. On a large purchase, the GST portion alone can be a meaningful short-term squeeze.

Illustrative example: the refrigerated van

Illustrative figures only.

A catering business buys a refrigerated van for $77,000 including $7,000 GST. It’s registered, reports quarterly and uses the cash basis.

• Option 1: pays on 26 March. The $7,000 credit goes on the January–March BAS, due 28 April. If lodged in early April, the refund may arrive within weeks.
• Option 2: pays on 3 April. The credit goes on the April–June BAS, due 28 July. The business carries the $7,000 for nearly four months.

Buying a week earlier brought the credit back about three months sooner. Because the van is well over $20,000 (excluding GST), it goes into the small business pool rather than being written off instantly — but the GST timing works the same way.

Need to fund the purchase and the GST gap? Find out what’s possible in about a minute.

What if the GST credit is large?

A large refund-generating BAS may be checked by the ATO before the refund is released. That’s normal. Keep the tax invoice, proof of payment and any finance documents ready so questions can be answered quickly. If you rely on the refund to cover other bills, build a buffer for the checking time.

How does this fit with the write-off?

The instant asset write-off and GST are separate. For registered businesses, the ATO says you exclude the GST when working out an asset’s cost for the $20,000 threshold. So a $21,000 (GST-inclusive) item costs about $19,091 for write-off purposes. See instant asset write-off 2026 for the rest of the rules, and buy in June or July? for the year-end angle.

What should be on the tax invoice?

A GST credit depends on a valid tax invoice for purchases over $82.50, so check it before you pay. For a large equipment purchase, make sure it shows:

• the supplier’s identity and ABN;
• the date of issue;
• a description of what was supplied, including quantity and price;
• the GST amount (or a statement that the total includes GST);
• your business name or ABN, which is generally required on invoices of $1,000 or more.

Errors are easy to fix before payment and annoying to fix afterwards, especially if you’re relying on the credit coming back in a particular quarter. Keep the invoice with the delivery docket and installation sign-off, since the same paperwork supports the write-off timing described in installed ready for use by 30 June. For stock rather than equipment, see stock before EOFY.

Timing the purchase, funding the gap

Getting the GST timing right is free money in the sense that matters most to small business: cash back sooner. If you’re planning a purchase big enough for this to matter, send us an enquiry. No credit check is involved in asking. Your details go to one team, not every lender in town, and a lending specialist calls to plan the funding around your BAS dates. Please give us accurate figures for the price and timing so we can structure it properly first time.