question archive Sandy is an employee of a school
Sandy is an employee of a school
Subject:LawPrice:2.87 Bought7
Sandy is an employee of a school. She recently purchased a laptop computer costing $1,100 from XYZ Pty. Ltd. Sandy often works from home, completing administration tasks for her employer and she plans to use the laptop at home when she undertakes such work. Sandy will also use the computer to complete tasks relevant to her education degree which she studies at a local university. Required: Advise Sandy as to what input tax credits, if any, are available in respect of the laptop. Please provide your reasoning.
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Answer:
Input tax credit pertaining to goods which are partly used for business and partly for personal consumption shall be restricted to the extent of used for business.
Input tax credit shall be restricted on the basis of reasonable estimate for which the goods would be used for personal consumption.
In the present case, Sandy will not be eligible to claim complete input tax credit of the laptop since she is using it for work as well as education.
