GST issues registers

Issues in this register that are a public ruling can now be found in the Public Rulings section of this Legal Database.

Issues in this register that have not been labelled as public rulings, constitute written guidance. We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information on these issues and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we must still apply the law correctly. If that means you owe us money, we must ask you to pay it but we will not charge you a penalty. Also, if you acted reasonably and in good faith we will not charge you interest. If correcting the mistake means we owe you money, we will pay it to you. We will also pay you any interest you are entitled to.

If you feel that the guidance in this issues register does not fully cover your circumstances, or you are unsure how it applies to you, you can seek further assistance from us.

This issue addresses what supplies occur under a bailment arrangement, how GST is calculated and the input tax credits available in relation to bailment arrangements.

1.a. What supplies occur under a bailment arrangement?

1.b. How is GST calculated?

1.c. Are motor vehicles held by a finance company under a bailment arrangement trading stock for the purposes of luxury car tax?

1.d. What input tax credits are available in relation to bailment arrangements?

1.e. How are input tax credits calculated on used vehicles traded from unregistered entities and sold to a finance company for purposes of bailment to the dealer?

1.f. What is the amount of input tax credit that a finance company can claim where they acquire a car from a dealer for the purposes of bailment and withhold part of the consideration as a security deposit?

This issue addresses whether an eligible disabled person can purchase or lease a car GST-free, eligibility definitions, how luxury car tax applies for people with a disability, and documentation requirements for cars sold to people with a disability.

2.a. Who is an eligible person with a disability?

2.b. Can an eligible person with a disability purchase or lease a car GST-free?

2.c. Can an eligible person with a disability acquire car parts GST-free?

2.d. Are oils and lubricants purchased by a person with a disability 'parts' for the purposes of Subdivision 38-P of the GST Act?

2.e. What medical aids or appliances in relation to motor vehicles for use by people with a disability are GST-free?

2.f. How does luxury car tax (LCT) apply to cars for people with disabilities?

2.g. How does luxury car tax apply on cars that are GST-free?

2.h. How is GST and LCT calculated on cars purchased by a person with a disability?

2.i. Will dealers be required to obtain documentation to support GST-free or luxury car tax free car sales to a person with a disability?

2.j. Is a dealer entitled to an input tax credit on a second-hand vehicle acquired from an unregistered entity that is sold GST-free to an eligible person with a disability?

2.k. Can input tax credits be claimed by an eligible person with a disability on a car that they have acquired or imported GST-free?

This issue addresses whether tax credits are available for demonstrator vehicles held at 1 July 2000.

3.a. Is a special credit available for sales tax borne on demonstrator vehicles held at 1 July 2000?

3.b. Is an input tax credit available on demonstrator vehicles held at 1 July 2000?

This issue addresses whether GST applies to costs such as delivery charges, stamp duty, transfer fees, registration and insurance.

4.a. Does GST apply to costs such as dealer delivery charges, stamp duty, transfer fees, registration and compulsory third party insurance?

4.b. How is GST calculated on a motor vehicle and other charges associated with the sale?

4.c. Compulsory third party insurance

4.c.(i) Is an entity entitled to claim an input tax credit for compulsory third party insurance premiums paid before 1 July 2003?

4.c.(ii) Is an entity entitled to claim an input tax credit for compulsory third party insurance premiums paid on or after 1 July 2003?

This issue addresses whether the payment of a deposit which is subject to forfeiture triggers a GST liability.

5.a. Does the payment of a deposit which is subject to forfeiture trigger a GST liability?

This issue addresses the rules that apply for a registered entity to obtain input credits relating to input-taxed financial supplies.

6.a. What is the de minimis test?

6.b. Is the de minimis threshold based on a group wide test or is the threshold based upon an entity basis only?

The following categories are considered in this issue:

•

Stock on hand

•

Spare parts, paint, oil and grease held at 1 July 2000

•

Phasing in input tax credits

•

Trade-ins

•

Input tax credits.

7.1. Stock on hand

7.1.a. What credits are available for new vehicles held for sale or exchange (including any options added) at 1 July 2000?

7.1.b. What credits are available for second-hand vehicles held for sale or exchange (including any modifications or parts added) at 1 July 2000?

7.1.c. What credits are available for second-hand vehicles imported by dealers and held for sale or exchange at 1 July 2000?

7.1.d. What formula will the ATO accept in order to calculate the special credit where the sales tax is not shown on a suppliers invoice?

7.2. Spare parts, paint, oil and grease held at 1 July 2000

7.2.a. Does the special credit apply to the sales tax borne on spare parts held by a dealer as at 1 July 2000?

7.2.b. Can the special credit for sales tax be claimed for parts, paint, oil and grease held at 1 July 2000?

7.2.c. Will the ATO issue a refund if the special credit exceeds the GST payable in the return in which it is claimed?

7.3. Phasing in input tax credits

7.3.a. What purchases or importations are covered by the phasing in of input tax credits?

7.3.b. What are the effects of the phasing in of input tax credits for vehicles?

7.3.c. What constitutes a second-hand vehicle?

7.3.d. Is an entity that was sales tax exempt subject to the phase in provisions on the acquisition of a car?

7.3.e. What is a 'Motor Vehicle' for GST purposes?

7.3.f. What charges or additions, in respect of a motor vehicle, are subject to the phasing in provisions?

7.3.g. What input tax credits are available where the value of a vehicle exceeds the car limit?

7.3.h. Who is entitled to quote for the purposes of the Luxury Car Tax Act?

7.3.i. How do the phasing in provisions in the GST law apply to leases?

7.3.j. How do the phasing in provisions in the GST law apply to hire purchase arrangements?

7.3.k. Where a business acquires a car by lease, is the amount of input tax credits on the lease payments limited to 1/11th of the car limit?

7.3.l. Where the value of a car, that is not a luxury car, exceeds the car limit, is the amount of the input tax credit limited to 1/11th of the car limit?

7.3.m. Can input tax credits be claimed by an eligible person with a disability on a car that they have acquired or imported GST-free?

7.4. Trade-ins

7.4.a. How are input tax credits calculated on used vehicles traded from registered entities?

7.4.b. How are input tax credits calculated on used vehicles traded in from unregistered entities or entities not required to be registered for GST?

7.4.c. Is a dealer entitled to an input tax credit on a second-hand vehicle acquired from an unregistered entity that is sold GST-free to an eligible person with a disability?

7.4.d. Is a dealer entitled to an input tax credit on a second-hand vehicle acquired from an unregistered entity when the subsequent supply by the dealer is a GST-free export?

7.4.e. In what circumstances is a dealer entitled to claim an input tax credit for motor vehicles acquired/traded in from charities, gift deductible entities or government schools?

7.4.f. What are the GST implications with respect to over allowances on trade-in vehicles?

7.5 Input tax credits

7.5.a. What input tax credits are available where the value of a vehicle exceeds the car limit?

7.5.b. Where a business acquires a car by lease, is the amount of input tax credits on the lease payments limited to 1/11th of the car limit?

View history: issue 7.1

View history: issue 7.2

View history: issue 7.3

This issue addresses the definitions and requirements for luxury car tax purposes.

8.a. What vehicles are subject to luxury car tax?

8.b. What is a car for luxury car tax purposes?

8.c. What vehicles are not subject to luxury car tax?

8.d. How does luxury car tax apply to the fitting of parts, attachments and accessories to luxury cars?

8.e. For luxury car tax purposes, what is the date of importation for a car?

8.f. When is luxury car tax payable?

8.g. Who is entitled to quote?

8.h. Is there an input tax credit for luxury car tax?

8.i. Luxury motor vehicles for primary producers and tourism operators

8.j. Fuel efficient motor vehicles

This issue addresses contracts and service arrangements that span 30 June - 1 July 2000

9.a. Where a contract for the sale of a vehicle is prepared prior to 1 July 2000, but the vehicle is not delivered until after 1 July 2000, is the vehicle subject to wholesale sales tax or GST?

9.b. What is the position with 'scheduled servicing' arrangements if a vehicle is sold prior to 1 July 2000, but the 'scheduled servicing' extends beyond 1 July 2000?

9.c. Can parts used in repairs spanning pre and post 1 July 2000 be taxed under different tax regimes?

This issue addresses the treatment and valuation for GST purposes of vehicles provided as part of sponsorship arrangements.

10.a. What is the treatment and valuation for GST purposes of vehicles provided as part of sponsorship arrangements?

10.b. Monetary sponsorship

10.c. Non-monetary sponsorship

This issue addresses when a taxable supply occurs, and how the value of a taxable supply is calculated.

11.a. When does a taxable supply occur?

11.b. How is the value of a taxable supply calculated?

This issue addresses the requirements, including documentation required, for each of the following:

•

tax invoices

•

adjustment events

•

recipient created tax invoices

•

RCTI determinations.

12.1. Tax invoices

12.1.a. In preparing a tax invoice, is it acceptable to show total value and total GST to arrive at total, price, rather than showing separately the price, GST and value of each individual item?

12.1.b. Is the part number on the tax invoice sufficient to identify goods?

12.1.c. Is it necessary to provide detail at line item level or will a delivery or supply summary be sufficient to satisfy the content requirements of an electronic tax invoice?

12.1.d. Is a warranty claim made by a dealer for work carried out in respect of a manufacturer/importer warranty a tax invoice?

12.1.e. Who is responsible for issuing a tax invoice when a customer purchases a car under a hire purchase agreement?

12.1.f. Can a tax invoice be issued for an individual dealer to cover a month's supplies rather than for each individual supply by that dealer?

12.1.g. What is an acceptable electronic data interchange (EDI) format for a tax invoice?

12.1.h. Will the ATO accept a tax invoice in a non-human readable form

12.1.i. Is there a need to have an Australian business number (ABN) in the EDI purchase order document?

12.2. Adjustment events

12.2.a. If there is a change in price and an adjustment note is issued, does the adjustment note have to identify a specific shipment and a specific invoice?

12.3. Adjustment events current period

12.3.a. When completing the business activity statement (BAS), why is it necessary to show adjustments relating to the current and earlier tax periods differently?

12.3.b. What type of documentation is required for current period adjustment events?

12.4. Recipient created tax invoices

12.4.a. Can a recipient created adjustment note be issued if the supplier issued the initial tax invoice?

12.4.b. What is the responsibility of the recipient who creates a recipient created tax invoice in case of understatement of GST payable?

12.5. RCTI Determinations

This issue addresses how a cash-back paid by a car manufacturer to a customer is treated for GST.

13.a. How is a cash-back paid by a car manufacturer to a customer on the purchase of a car treated for GST?

13.b. What type of documentation is required to reflect a third party payment?

This issue addresses who has the liability to pay GST when vehicles are sold.

14.a. Who has the liability to pay GST where vehicles are sold on consignment?

14.b. Are vehicles sold at auction by government vendors a taxable supply?

14.c. Is the price of vehicles sold at auction to business purchases GST-inclusive?

This issue addresses questions on GST and warranty plans, warranty repairs and warranty claims.

15.a. How are warranty plans treated for GST purposes?

15.b. Can parts used in warranty repairs be taxed under different regimes? Withdrawn 29/01/2004.

15.c. Is a warranty repair carried out by a dealer for a customer a taxable supply?

15.d. Is warranty work carried out by a dealer that is invoiced to the manufacturer/importer a taxable supply?

15.e. Is a warranty claim made by a manufacturer/importer on an overseas manufacturer a taxable supply?

15.f. Is a warranty claim made by a local car manufacturer or distributor on a local component manufacturer a taxable supply?

15.g. Is GST payable on refunds from overseas suppliers where the goods have been rejected by the importer?

15.h. Is there GST on warranty repairs on second-hand vehicles? Withdrawn 29 January 2004.

This issue addresses questions on pay as you go withholding.

16.a. Are spotters' fees subject to PAYG withholding?

16.b. Is the amount of a special credit for sales tax required to be included as instalment income at label T1?

This issue addresses questions on motor vehicles used within the Diplomatic Community.

17.a. Can embassies, consulates, international organisations, diplomatic and consular staff purchase vehicles GST and LCT free?

17.b. Can these organisations and individuals receive a refund of GST and LCT which they pay?

17.c. Are all entitlements the same?

17.d. Are there different entitlements for locally manufactured and imported cars?

17.e. What about imported vehicles?

17.f. What is the situation concerning imported vehicles which are purchased in Australia from bond?

17.g. Where can I obtain further information?