GST Output Tax: Mortgagee sale / lease

Key requirements

The mortgagee claims through its own return where it selected and instructed the supplier and entered the contract requiring payment for the supply. Recovery of that cost from the mortgagor’s account does not change the contracting party. Where the supplier instead contracts with the mortgagor, only the mortgagor normally claims subject to the usual conditions. An administrative concession permits the mortgagee to deduct that input tax against the transaction’s output tax if it proves payment for the mortgagor’s contractual supply and confirms that the mortgagor has not claimed the same tax. Use supplier invoices addressed to the mortgagor for that deduction. Retain contract, payment and non-duplication evidence and follow the separate debt-satisfaction statement procedure for the sale or rent.