This question is based on end of chapter question 25.7 of PoTL 2019. Therefore, you are required to use the information in the three paragraphs of this question as the basis upon which you answer the questions set out below. In addition, assume that the invoice is for one months membership, and that Krafty Kitchens Ltd pays for the golf club membership every month relevant to minor fringe benefit rule.

25.7

Krafty Kitchens Ltd is a large kitchen manufacturer that is registered for GST purposes. It accounts for GST on an accruals basis and submits its BASs monthly. Krafty Kitchens Ltd organises and pays for the golf club membership of its Head of Sales, Samuel. This is treated as a fringe benefit for fringe benefits tax purposes.

On 16 April, Krafty Kitchens Ltd received a tax invoice from Samuels golf club, Greenvale Golf Club, for the payment of Samuels membership fees of $220 (including GST). Krafty Kitchens did not pay the membership fee for Samuel until 2 July, due to an oversight by the companys accounts clerk.

Greenvale Golf Club accounts for GST on a cash basis and submits its BASs quarterly.

Discuss whether Krafty Kitchens can claim an input tax credit with respect to the golf club fees. If it can claim an input tax credit, when would it do so? When would Greenvale Golf Club report the GST payable with respect to Samuels membership fees on its BASs?

You are required to:

a. Discuss the Income Tax implications of the events. Show all calculations. Your answer must reference relevant sections of the Income Tax Assessment Acts.

b. Briefly discuss the GST implications of the events. Show all calculations. Provide reasons for your answer.

c. Discuss the Fringe Benefits Tax implications of the events. Show all calculations, provide reasons for your answer.