Commentary

V3.461A Directly attributable input tax

Part V3 Supplies, acquisitions and imports

V3.461A Directly attributable input tax

V3.461A Directly attributable input tax

Goods and services used or to be used exclusively in making taxable supplies

The whole of the input tax on such goods and services is attributed to taxable supplies and is, therefore, eligible for credit1.

Disregarded supplies

Input tax on goods and services cannot be attributed under this head if the taxable supplies made or to be made are disregarded for the purposes of VAT, for example those made by one body corporate to another body corporate included in the same group registration2. Input tax on goods and services acquired by the supplier company is attributed under this or another head according to the use made or to be made of the supply by the ultimate recipient company in the group.

The following supplies are not taken into account as a supply made by the taxable person when determining the allowance of input tax in his case—

  1.  

    (a)     relevant services subject to the reverse charge3; and

  2.  

    (b)     the deemed supply by a representative member of chargeable assets of a business transferred as a going concern to a body corporate included in a group registration4.

Input tax on self-supplies

The input tax arising when a person makes a supply to himself is not allowable as attributable to the supply made5. It follows that the input tax arising may be attributable to other supplies made by him and it may be properly attributable, therefore, to taxable or exempt supplies, or to other activities.

Input tax on goods and services used or to

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