ATO Interpretative Decision
ATO ID 2002/1056
Goods and Services Tax
GST and input tax credits for a new pneumatic bulk road tanker acquired before 23 May 2001FOI status: may be released
Status of this decision: Decision current to 13 September 2006. Section 20 of the A New Tax System (Goods and Services Tax) Act 1999 was repealed with effect from 14 September 2006.
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the entity, a business operator, entitled to an input tax credit under section 11-20 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it acquires a new pneumatic bulk road tanker before 23 May 2001?
Decision
No, the entity is not entitled to an input tax credit under section 11-20 of the GST Act when it acquires a new pneumatic bulk road tanker before 23 May 2001.
Facts
The entity is a business operator. The entity acquires a new pneumatic bulk road tanker ('tanker') before 23 May 2001.
The entity is registered for goods and services tax (GST).
The tanker attaches to a prime mover but is not fixed to the prime mover. It is an item of mobile plant and not a self-propelled item. It is not designed to be towed by a car.
The purchase of the tanker is a creditable acquisition in accordance with section 11-5 of the GST Act.
The acquisition of the tanker would have been taxable under the sales tax law if sales tax had not been ended by the A New Tax System (End of Sales Tax) Act 1999.
Reasons for Decision
Under section 11-20 of the GST Act, an entity is entitled to an input tax credit for any creditable acquisition that it makes. The entity is making a creditable acquisition in accordance with section 11-5 of the GST Act.
However, section 20 of the A New Tax System (Goods and Services Tax Transition) Act 1999 (GST Transition Act) contains special transitional rules relating to the phasing in of input tax credits for new motor vehicles, certain trailers and bodies for motor vehicles.
Under subsection 20(2) of the GST Transition Act, an entity is not entitled to an input tax credit if the acquisition or importation is made before 23 May 2001.
Paragraph 20(1)(b) of the GST Transition Act provides that section 20 of the GST Transition Act applies to the acquisition of a new detachable trailer designed to be towed by a prime mover of a kind prescribed in the regulations.
Regulation 6 of the A New Tax System (Goods and Services Tax Transition) Regulations 2000, states that for paragraph 20(1)(b) of the GST Transition Act, any kind of detachable trailer designed to be towed by a prime mover (except a kind of detachable trailer designed to be towed by a car and commonly used for private or domestic purposes) is prescribed. Examples of detachable trailers that are designed to be towed by a car and are commonly used for private or domestic purposes are box trailers, horse floats and caravans.
The tanker attaches to a prime mover but is not fixed to the prime mover and is not designed to be towed by a car. This means that paragraph 20(1)(b) is satisfied and section 20 of the GST Transition Act does apply to the acquisition of a new pneumatic bulk road tanker.
Therefore, the entity is not entitled to an input tax credit under section 11-20 of the GST Act when it acquires a new pneumatic bulk road tanker before 23 May 2001.
Date of decision: 27 September 2001
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 11-5
section 11-20
section 20
paragraph 20(1)(b)
subsection 20(2) A New Tax System (Goods and Services Tax Transition) Regulations 2000
Regulation 6 A New Tax System (End of Sales Tax) Act 1999
The Act
Keywords
Goods and services tax
GST supplies & acquisitions
Creditable acquisition
GST transitional issues
Special transitional rules
ISSN: 1445-2782
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