ATO Interpretative Decision
ATO ID 2002/871 (Withdrawn)
Goods and Services Tax
LCT and dealer delivery charges and warrantiesFOI status: may be released
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This ATO ID is withdrawn as the ATO view on this matter is now contained in the Guide to luxury car tax.This document incorporates revisions made since original publication.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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 costs for:
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- dealer delivery;
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- statutory warranties; and
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- standard manufacturer's warranty
that are incorporated into the price of the car, in the 'luxury car tax value' as defined in section 5-20 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act)?
Decision
Yes, the entity does include the above costs that are incorporated into the price of the car, in the 'luxury car tax value' as defined in section 5-20 of the LCT Act.
Facts
The entity is a car dealer. The entity sells a luxury car. The sale is a taxable supply of a luxury car under section 5-10 of the LCT Act.
The amount charged by the dealer for the luxury car includes:
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- dealer delivery;
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- statutory warranties; and
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- standard manufacturer's warranty.
They are not separate supplies to the supply of the car.
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:
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- any luxury car tax for that supply; and
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- any other Australian tax, fee or charge, other than GST and customs duty payable on the supply of the car.
'Price' is defined in section 27-1 of the LCT Act as having the same meaning given in section 9-75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Section 9-75 of the GST Act defines price as the amount of consideration received for the supply including the GST payable on the supply.
The entity is making a taxable supply of a luxury car to a customer. The amount charged by the entity includes the costs of:
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- dealer delivery;
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- statutory warranties; and
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- standard manufacturer's warranty.
These items form part of the supply of the car. They are not separate supplies to the supply of the car. Therefore, the cost of these items is part of the consideration (the price) for the supply of the car.
As the costs are part of the price of the luxury car, they are included in the 'luxury car tax value' as defined in section 5-20 of the LCT Act.
Date of decision: 23 August 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 9-75
section 5-10
section 5-20
subsection 5-20(1)
section 27-1 Related ATO Interpretative Decisions
ATO ID 2002/869
ATO ID 2002/870
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
ISSN: 1445-2782
| Date: | Version: | |
| 23 August 2001 | Original statement | |
| You are here | 3 November 2006 | Archived |