Compulsory Third Party Insurance

Do GST credits apply to CTP?

Compulsory Third Party (CTP) insurance is provided by an authorised insurer and the applicable CTP insurance premium for your vehicle is listed on your renewal notice. This premium includes the Goods and Services Tax (GST).

For policies commencing on or after 1 July 2003, you may be entitled to claim an input tax credit on the GST component of your CTP premium, if the insured entity is GST registered.

Those entities which:

(a)       are registered for GST purposes, and

(b)       pay CTP insurance premiums for periods of cover commencing after 1 July 2003,

may be entitled to claim a tax credit on GST paid on their CTP premium if the insurance is business related.

GST credits cannot be claimed for CTP insurance premiums paid for periods commencing before 1 July 2003.

Premiums are priced differently depending on the GST registered status of the insured and are higher for those persons with an entitlement to claim an input tax credit. This is due to the increase in claims costs for CTP insurers on GST registered vehicles as a result of changes to the GST legislation.

The information above is not intended to give you advice about the legal position that will apply to you and whether or not you will be entitled to claim GST credits.  If you require further information about the effect of the GST transitional rules on your CTP insurance, contact the Australian Taxation Office, Tax Reform Information Line on 13 24 78, or your tax adviser.

A printer friendly version of this and all Frequently Asked Questions is available hereunder in the Documents section.

Documents

Name	Released	Type
Frequently Asked Question 16	10 July 2009	PDF [10Kb]
All Frequently Asked Questions	10 July 2009	PDF [46Kb]

Links

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