ATO Interpretative Decision

ATO ID 2002/486

Goods and Services Tax

GST and taxi plate owner that does not provide taxi travel
FOI status: may be released

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Is the entity, a taxi plate owner, required to be registered for goods and services tax (GST) under the compulsory registration requirements in subsection 144-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it only leases out the taxi plate but does not provide taxi travel?

Decision

No, the entity is not required to be registered for GST under the compulsory registration requirements in subsection 144-5(1) of the GST Act, when it only leases out the taxi plate but does not provide taxi travel.

Facts

The entity owns taxi plates. The entity provides the taxi plates to a taxi company under a lease agreement. The taxi company attaches the plates to its vehicles.

The entity does not own a taxi or a taxi driver's licence.

Reasons for Decision

Subsection 144-5(1) of the GST Act provides that an entity is required to be registered if, in carrying on its enterprise, it supplies taxi travel.

Subsection 144-5(2) of the GST Act further states that it does not matter whether:

•: the entity's GST turnover meets the registration turnover threshold; or
•: in carrying on its enterprise, the entity makes other supplies besides supplies of taxi travel.

Taxi travel is defined in section 195-1 of the GST Act to mean 'travel that involves transporting passengers, by taxi or limousine, for fares.'

The entity is only leasing out the taxi plates, it is not transporting passengers. The leasing out of taxi plates in itself does not constitute the supply of taxi travel for the purposes of subsection 144-5(1) of the GST Act. Further, the entity does not own a taxi or a taxi driver's licence and the taxi company attaches the plates to its vehicles. It is the taxi company that provides the taxi travel.

Therefore, the entity is not required to be registered for GST, under the compulsory registration requirements in subsection 144-5(1) of the GST Act, when it only leases out the taxi plates but does not provide taxi travel.

[Note: The entity may be required to be registered under the general registration rules outlined in Division 23 of the GST Act.]

Date of decision: 23 February 2000

Legislative References:
A New Tax System (Goods and Services Tax) Act 1999
   Division 23
   subsection 144-5(1)
   subsection 144-5(2)
   section 195-1

Keywords
Goods and services tax
GST transport
GST registration
Registration of taxis

Siebel/TDMS Reference Number: CRS9994

Business Line: Indirect Tax

Date of publication: 30 April 2002

ISSN: 1445-2782

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