• Dealers

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    GST treatment

    If you are a dealer, you report GST on the total consideration received for the sale, including the consideration received from the customer and any third party MVIPs.

    Usually, you report the total GST on the sale of a motor vehicle in the tax period that is the earlier of when you:

    • receive any of the consideration
    • issue an invoice for any of the consideration.

    When you report GST will change if you:

    You can issue a customer either a tax invoice or document that meets all the tax invoice requirements. However, it does not need to include information about the third party MVIP and the GST for that MVIP.

    See also:

    Receiving a MVIP and then selling the vehicle in a later period

    If you receive a third party MVIP and then make a sale in a later tax period, you can delay reporting all of the GST payable (and any LCT applicable) until you know the total amount of the consideration.

    Selling the vehicle then receiving a MVIP in a later period

    If you sell a motor vehicle, and then receive a third party MVIP in a later tax period when you report depends if you were:

    MVIP of a known amount

    If you were aware you would receive the third party MVIP and know the amount of the payments, you report GST for the total consideration (including payment from the customer and the third party MVIP) in the tax period that's earlier of when you: 

    • receive any payment from the customer
    • issue an invoice to the customer.
    MVIP of an unknown amount

    If you were aware you would receive the third party MVIP but the amount of the payment was unknown, you report the GST on the:

    • amount charged to the customer in the tax period that's earlier of when you
      • receive the payment from the customer
      • issue an invoice to the customer
       
    • third party MVIP in the tax period when you received it.
    Unaware of a MVIP

    If you were unaware you would receive the third party MVIP you report the GST on the:

    • amount charged to the customer in the tax period that's earlier of when you
      • receive the payment from the customer
      • issue an invoice to the customer
       
    • third party MVIP in the tax period you received it, which will result in additional GST by making an increasing adjustment in your activity statement.

    See also:

    Receiving a MVIP but not making a sale

    If you receive a third party MVIP but you do not end up making a sale of the motor vehicle to a customer, no GST liability arises as there is no supply for which the payment is consideration.

    LCT treatment

    You report and pay any LCT on the total consideration received for the sale, including the consideration received from the customer and the third party MVIP received from the manufacturer.

    If LCT is payable and you receive a third party MVIP in a later period and you were:

    • aware when you made the sale that you would receive an MVIP of a known amount, you include the MVIP when you calculate and report the LCT
    • unaware of the MVIP (or uncertain of the exact amount), you make an adjustment in your activity statement for the increased LCT.

    See also:

    Examples – working out the GST and LCT

    Example: Working out the LCT and GST payable for a luxury vehicle including an MVIP

    In February 2017, Matty Bee Motors (MBM) sold a non-fuel-efficient luxury motor vehicle for $77,500, plus GST and LCT. This price did not include stamp duty, registration, extended warranty or compulsory third party insurance.

    The manufacturer gave MBM a third party MVIP of $2,000 (MBM will include it in their activity statement as part of the vehicle sale and pay GST on this amount).

    To work out the total consideration for the vehicle, MBM Motors added together the amount paid by the customer and the amount paid by the manufacturer, which is
    $77,500 + $2,000 = $79,500

    The total luxury motor vehicle value is used to work out if the price of the vehicle (including GST) is higher than the LCT threshold. To work this out, MBM Motors adds the GST to the total consideration, which is:
    $79,500 + ($79,500 × 10÷100) = $87,450

    MBM works out the amount of LCT as follows:

    (LCT value − LCT threshold) × 10 ÷ 11 × 33%

    ($87,450 − $64,132) × 10 ÷ 11 × 33%

    $23,318 × 10÷11 × 33%

    $21,198 × 33%

    The LCT payable is $6,995.

    In summary, the sale was for a total of $94,445, including: $79,500 (before tax), plus GST of $7,950 plus LCT of $6,995.

    When MBM completes its monthly activity statement it reports GST of $7,950, which includes the GST collected from the customer plus GST for the MVIP. It also reports its LCT liability of $6,995.

    End of example

     

    Example: Working out GST and LCT payment when a luxury motor vehicle has an all-inclusive retail price

    In February 2017, Matty Bee Motors (MBM) sold a luxury motor vehicle that is not a fuel-efficient vehicle, for an all-inclusive retail price of $93,017 including GST and LCT. This price did not include stamp duty, registration, extended warranty or compulsory third party insurance.

    The manufacturer gave MBM a third party MVIP of $2,000. GST and LCT is worked out on the all-inclusive price, which is $95,017 ($93,017 + $2,000).

    Work out the amount of LCT

    MBM takes out the GST and LCT payable from the amount above the LCT threshold.

    = (all-inclusive price − LCT threshold) ÷ 1.43

    *1.43 represents cumulatively the GST at 10% and LCT at 33%

    = ($95,017 − $64,132) ÷ 1.43

    = $21,598

    MBM then works out the LCT payable:

    = $21,598 × 33%

    = $7,127

    Work out the amount of GST in the all-inclusive price

    MBM first works out the LCT value, which is usually the GST inclusive price of the vehicle:

    = (all-inclusive price − LCT payable on the sale) × 1 ÷ 11

    = ($95,017 − $7,127) × 1 ÷ 11

    = $87,890 × 1 ÷ 11

    = $7,990

    The total consideration of $95,017 includes $7,127 LCT and $7,990 GST.

    The LCT amount of $7,127 represents the total LCT payable on both the MVIP and the amount paid by the customer to the dealer.

    End of example
      Last modified: 31 May 2017QC 49280