ATO Interpretative Decision
ATO ID 2002/24
Goods and Services Tax
GST and reception and transfer servicesFOI status: may be released
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the entity, a supplier of reception and transfer services to overseas students, required to be registered for goods and services tax (GST), in accordance with the compulsory registration requirements in subsection 144-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?
Decision
No, the entity is not required to be registered for GST in accordance with the compulsory registration requirements under subsection 144-5(1) of the GST Act.
Facts
The entity is a supplier of reception and transfer services to overseas students. The entity supplies the services to the students upon their arrival in Australia.
As part of this service, the entity deals with any problems facing the students upon their arrival including lost baggage and Customs, and provides the students with information on schools, relevant local conditions, settling in services and general orientation activities.
Sometimes the entity uses its vehicle to convey the overseas students from the airport to the students accommodation. The entity's vehicle is not a limousine.
The entity receives a standard amount for the reception and transfer services it provides to each student. The entity's current and projected GST turnover is below the registration turnover threshold in section 23-15 of the GST Act.
Reasons for Decision
Under subsection 144-5(1) of the GST Act, an entity is required to be registered for GST if, in the course of its enterprise, it supplies taxi travel.
Section 195-1 of the GST Act defines taxi travel to mean travel that involves transporting passengers, by taxi or limousine, for fares. As the entity's vehicle is not a limousine, it remains to be determined whether the services that the entity provides amounts to transporting passengers, by taxi, for fares.
The word 'taxi' is not defined in the GST Act and accordingly takes on its ordinary meaning. The Macquarie Dictionary (1997), defines 'taxi' as, 'a motor car for public hire, especially one fitted with a taximeter.'
In this case, the entity supplies reception and transfer services. The conveying of passengers from the airport to their accommodation is part of the reception and transfer service that the entity provides. The entity does not use its vehicle in a taxi like manner or operate its vehicle on a fare for distance or time arrangement. Additionally, the entity's vehicle is not available for public hire. The entity's vehicle is not a 'taxi' and it is considered that the entity is not providing a service that is similar to services provided in the taxi industry nor is it providing a service that essentially competes with the taxi industry. Accordingly, the entity is not supplying taxi travel as defined in section 195-1 of the GST Act.
As the entity is not providing taxi travel, it is not required to register for GST in accordance with the compulsory registration requirements in subsection 144-5(1) of the GST Act.
Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
section 23-5
section 23-15
subsection 144-5(1)
section 195-1
Other References:
The Macquarie Dictionary, (1997), 3rd edn, The Macquarie Library Pty Ltd, New South Wales
Keywords
Goods & services tax
GST registration
GST annual turnover
GST turnover threshold
Required to be registered
GST special rules
Registration of taxis
ISSN: 1445-2782
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
