04 Sep Do you or do you not want the STCs on the invoice?
If you’ve ever got an approval email from Solaris, you’ll have noticed that a lot of the time we ask for the STCs not to be mentioned on the invoice. But then other times we’ll say it must be noted.
These are not my rules, I am a broker, it is the rule of the financiers that fund the equipment.
The reason for this is that on an Operating Lease by law you are not allowed to finance part of the purchase. You need to finance the whole thing. It’s a tax thing.
Note, on a Chattel Mortgage it doesn’t make that much of a difference.
So technically if you deposit any amount on an asset, you are no longer allowed to finance it under an Operating Lease.
So that’s why things get complicated with solar because of STCs. Each bank and their flash team of lawyers interpret the laws differently.
Some say the STCs are technically a separate transaction and shouldn’t be on the invoice.
Some say it’s not a deposit and must be on the invoice for regulatory purposes.
And some couldn’t care less.
I don’t really have an opinion on this. Everyone I speak to has a different take on it, but they are all equally as confident that they are right. That includes solar guys.
My focuses are on the implications of this. Mainly that of GST. That’s where everybody gets worried (because you think you’re going to get in trouble).
Now as usual I’m not going to give you guys financial advice.
What I will say is how you claim GST is an independent process to the bank paying your invoice.
As long as the total amount you get paid is the same that’s all that really matters.
You can claim how you think it should be done. And the bank can claim it how they think it should be done.