Decision impact statement

Dreamtech International Pty Ltd v Commissioner of Taxation

Venue: Federal Court of Australia
Venue Reference No: VID 159 of 2010
Judge Name: Stone, Gordon & McKerracher JJ
Judgment date: 25 August 2010
Appeals on foot:
No

Impacted Advice

Relevant Rulings/Determinations:

• None

Subject References:
Taxation
luxury car tax
whether stretched Hummer within the definition of 'car' in the A New Tax System (Luxury Car Tax) Act 1999 (Cth)
whether construction of the word 'limousine' was a question of fact or a question of law within s 44(1) of the AAT Act.

Decision Outcome:

Favourable

Précis

The issue in this case was whether or not a stretched Hummer vehicle was a "limousine" and, therefore, came within the definition of "car" in section 27-1 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act).

Brief summary of facts

The Administrative Appeals Tribunal found the following facts (although it is noted that Dreamtech disagreed with certain of the findings):

•

Dreamtech is a licensed motor vehicle dealer. It imported a Hummer H1 which had been stretched from its original 122.8 inch wheelbase to a 140 inch wheelbase. It weighed 5.82 tonnes and had a carrying capacity of 14 people, including the driver. Following importation, the applicant made some modifications to the vehicle in order to comply with the Australian standards.

•

Upon importation, the interior of the stretched Hummer included such features as leather-look seating, flashing lights, strobe lights under the seats, large ice buckets for holding alcoholic beverages, liquid crystal display screens, DVD player, built in sound system, polished stainless steel ceiling and fibre optic lights.

•

The price of the vehicle exceeded the LCT threshold. Dreamtech agreed that should the stretched Hummer be found to be a 'car' for LCT purposes, it would be subject to LCT.

Issue decided by the Tribunal

•

The stretched Hummer was a 'limousine' and therefore a car within s 27-1 of the LCT Act. The Tribunal found that the ordinary meaning of the word 'limousine' is reasonably wide and referred to the common use of the term in colloquial speech.

Issues decided by the Full Court

•

The Tribunal gave the word 'limousine' its ordinary meaning and took into account all relevant considerations. The Tribunal considered both whether the vehicle was a motor vehicle and a limousine before correctly making a finding that the vehicle was a car for the purposes of s27-1 of the LCT Act. Further, the Tribunal gave due consideration to Dreamtech's arguments that the vehicle is similar to a bus and is defined to be a heavy vehicle under the Australian Design Rules.

•

The construction of the definition of 'limousine' is a question of law; however, whether a particular vehicle falls within the definition of 'limousine' is a question of fact.

Tax Office view of Decision

The decision confirms the ATO's view of the attributes that are to be taken into account when determining whether or not a vehicle is a limousine.

Administrative Treatment

None - the case confirms the ATO view.

Court citation:
[2010] FCAFC 103
(2010) 270 ALR 471
(2010) 187 FCR 352
2010 ATC 20-204
80 ATR 276

Legislative References:
A New Tax System (Luxury Car Tax) Act 1999
25-1
27-1


A New Tax System (Indirect Tax and Consequential Amendments) Act (No 2) 1999

Case References:
Deputy Commissioner of Taxation v ICI Australia Operations Pty Ltd
(1987) 18 ATR 313
87 ATC 4069

Falkiner v Whitton
[1917] AC 106
22 CLR 324

Metropolitan Gas Co v Federated Gas Employees' Industrial Union
(1924) 35 CLR 449
31 ALR 117

Seay v Eastwood
[1976] 1 WLR 1117
[1976] 3 All ER 153

Adams v Rau
(1931) 46 CLR 572
38 ALR 87

Baxter Healthcare Pty Limited v Comptroller-General of Customs
(1997) 72 FCR 467

Brutus v Cozens
[1973] AC 854

Collector of Customs v Pozzolanic Enterprises Pty Ltd
(1993) 43 FCR 280
115 ALR 1

Commissioner of Taxation v Murray
(1990) 21 FCR 436
21 ATR 78
90 ATC 4182

Ergon Energy Corporation Ltd v Commissioner of Taxation
[2006] FCAFC 125
153 FCR 551
64 ATR 130

Hope v Bathurst City Council
[1980] HCA 16
144 CLR 1
12 ATR 231
80 ATC 4386

NSW Associated Blue-Metal Quarries Limited v Federal Commissioner of Taxation
[1956] HCA 80
94 CLR 509

Peacock v Zyfert
(1983) 48 ALR 549
77 FLR 47

Price Street Professional Centre Pty Ltd v Commissioner of Taxation
[2007] FCAFC 154
243 ALR 728
2007 ATC 5044
67 ATR 544

Sharp Corporation of Australia Pty Ltd v Collector of Customs
(1995) 59 FCR 6
22 AAR 35