GST issues registers

Motor vehicle industry partnership

Issue 14 - Vehicles sold on consignment, at auction, or at auction by government vendors

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

For source of ATO view, refer to paragraphs 20 to 25 of GSTR 2000/37 - Goods and services tax: agency relationships and the application of the law.

Where a dealer is acting as agent for the other party, the principal, and does not obtain title to the vehicle, the GST liability, if any, on the supply of the vehicle rests with the principal, and not the dealer. The dealer would have a GST liability in relation to the supply of a selling service, if a commission is received from the principal.

When the dealer is acting on behalf of a registered person, the dealer may issue the tax invoice rather than the principal.

Registered entities may enter into an arrangement in writing, under which an agent acting for a principal will be treated as a supplier or acquirer, ie, as a principal in their own right. The agent will issue the tax invoice and adjustment notes to the third parties and the principal will not issue such documents. Certain conditions will apply.

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

Non-interpretative - other references (see principles in GSTR 2000/37 - Goods and services tax: agency relationships and the application of the law).

Government bodies that are registered or required to be registered and sell motor vehicles make a taxable supply of the vehicle. If the auctioneer is acting as agent, the GST liability, if any, on the supply of the vehicle rests with the principal not the auctioneer.

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

For source of ATO view, refer to general principles and paragraph 38 of GSTR 2000/37 - Goods and services tax: agency relationships and the application of the law.

If the vendor is a registered entity it is required to charge GST. The auctioneer has to state whether the vendor is a registered or unregistered entity and also state whether the bid is GST-inclusive or exclusive. Auctioneers will have to decide on how it will operate in practice.

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