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ATO Interpretative Decision

ATO ID 2002/869 (Withdrawn)

Goods and Services Tax

LCT and accessories for luxury cars
FOI status: may be released
  • This ATO ID is withdrawn as the ATO view on this matter is now contained in the Guide to luxury car tax.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Does the entity, a car dealer, include the cost of a roof rack in calculating the 'luxury car tax value' as defined in section 5-20 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act), where the entity arranged for the roof rack to be fitted to the luxury car before its delivery to the customer?

Decision

Yes, the entity does include the cost of a roof rack in calculating the 'luxury car tax value' as defined in section 5-20 of the LCT Act, where the entity arranged for the roof rack to be fitted to the luxury car before its delivery to the customer.

Facts

The entity is a car dealer. The entity sells a luxury car. The customer is not entitled to quote for the supply of the luxury car (see note for explanation). The sale is a taxable supply of a luxury car under section 5-10 of the LCT Act.

The customer requests that a roof rack be fitted to the luxury car before delivery. The roof rack is an optional extra and is only fitted to the car at the request of the customer. The entity arranges for the roof rack to be supplied and fitted by a third party. The customer pays the third party directly for the roof rack. The customer picks the car up from the entity after the roof rack has been fitted by the third party.

The entity is registered for goods and services tax (GST).

Reasons for Decision

Section 5-20 of the LCT Act defines the 'luxury car tax value' of a car. Subsection 5-20(1) of the LCT Act provides that the luxury car tax value is the price of the car excluding:

•
any luxury car tax for that supply; and
•
any other Australian tax, fee or charge, other than GST and customs duty payable on the supply of the car.

Further, subsection 5-20(3) of the LCT Act provides that the luxury car tax value of a car includes the price of all supplies in relation to the car that are made to, or are paid for by, the recipient of the car and that are:

•
made before the end supply of the car; or
•
made under an arrangement with the supplier of the car, or with an associate of the supplier, at or before the time of the end supply of the car.

Section 27-1 of the LCT Act defines 'end supply' of a car to mean a supply of a car to a recipient who is not entitled to quote in relation to that supply.

As the customer is not entitled to quote for LCT purposes, the end supply of a car occurs when the car is delivered to the customer. Therefore, the end supply of the luxury car in question occurs when the car is delivered to the entity's customer.

The entity was instructed by the customer to arrange for the supply and fit of the roof rack to the luxury car before delivery. Therefore, the supply of the roof rack is a supply made in relation to the car before the entity delivers the car to its customer. As such, the costs associated with the supply of the roof rack and its installation are included in the 'luxury car tax value' according to subsection 5-20(3) of the LCT Act.

[Note: In certain circumstances, a recipient entity can quote their Australian Business Number (ABN) in the prescribed form for a supply or importation of a luxury car and not pay luxury car tax. This is designed to avoid luxury car tax becoming payable until the car is sold or imported at the retail level. Division 9 of the LCT Act sets out who is entitled to quote and the manner in which it is to be done.]

Date of decision:  23 August 2001

Legislative References:
A New Tax System (Luxury Car Tax) Act 1999
   section 5-10
   section 5-20
   subsection 5-20(1)
   subsection 5-20(3)
   Division 9
   section 27-1

Related ATO Interpretative Decisions
ATO ID 2002/870
ATO ID 2002/871
ATO ID 2002/872

Other References:
Guide to Luxury Car Tax - NAT 3394
Luxury Car Tax Fact Sheet - NAT 2963

Keywords
Goods & services tax
GST Luxury Car Tax Stream

Business Line:  GST

Date of publication:  27 August 2002

ISSN: 1445-2782

history
  Date: Version:
  23 August 2001 Original statement
You are here 3 November 2006 Archived

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