ITC and GST Information
ITC is the Input Tax Credits which you claim with the ATO for your business to register its tax liabilities via your next Business Activity Statement (BAS). GST (Goods and Services Tax) is the tax placed on the items themselves when purchased, which is separate but related to the ITC.
If the insured business is registered for GST and uses the insured risk for business purposes, it can claim these credits on its BAS. However, when an insurance claim is settled, the insurer adjusts the payout amount based on your entitlement to ITC.
As part of making a claim, an insurer will ask what percentage you are entitled to claim of the items ITC. If you claim a percentage of the business use of the item or on the risk covered on the policy, the insurer is entitled to remove the ITC percentage from the claim settlement. You can claim this back, given you claim the tax credits under your business when you complete your income tax statements.
If the business is not registered for GST or uses the risk for non-business purposes, it cannot claim ITC, and the insurer provides this back to you. We may need evidence to confirm if you do not claim GST or ITC on the risk item, and will likely need to be provided from your accountant.
The below links may assist you, or your accountant on how GST and ITC relate to your settlement and how you can claim back via the ATO the remaining GST / ITC.