15.a. How are warranty plans treated for GST purposes?
For source of ATO view, refer to:
- paragraphs 56 to 69 of GSTR 2003/7External Link - Goods and services tax: what do the expressions 'directly connected with goods or real property' and 'a supply of work physically performed on goods' mean for the purposes of subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999?
- principles in GSTR 2005/6External Link - Goods and services tax: the scope of subsection 38-190(3) and its application to supplies of things (other than goods or real property) made to non-residents that are GST-free under item 2 in the table in subsection 38-190(1) of the A New Tax System (Goods and Services Tax) Act 1999.
There is no GST liability in respect of statutory warranties or the standard manufacturer's warranty included in the price of a motor vehicle sold before 1 July 2000, (subsection 12 (1A) of the Transition Act).
However, any warranties offered by the dealer in excess of these warranties for which there is a separate charge, such as 'extended warranties', will be subject to GST to the extent that the warranty relates to the period on or after 1 July 2000.
Warranties sold on or after 1 July 2000 will be subject to GST.