From 1 July 2012, businesses that account for GST on a cash basis and make acquisitions under hire purchase arrangements can now claim GST upfront!
Division 158 has been introduced into the GST Act allowing taxpayers who account for GST on a cash basis to be treated the same as taxpayers who account on an accruals basis when they make acquisitions under hire purchase agreements.
In practical terms, this means that for agreements entered into on or after 1 July 2012, taxpayers on a cash accounting basis can claim the full amount of any available GST credit at the time the first payment under the hire purchase is invoiced or paid.
Before this change, cash basis taxpayers could only claim GST credits progressively as each payment under the hire purchase was made. See ATO site HERE