ATO Interpretative Decision

ATO ID 2004/585 (Withdrawn)

Goods and Services Tax

Luxury car tax and hearses
FOI status: may be released

This ATO ID is withdrawn as the issue is dealt with in the publication Rental Properties 2005-06.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Is the entity, a motor car dealer, making a taxable supply of a luxury car under section 5-10 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act), when it sells a hearse?

Decision

No, the entity is not making a taxable supply of a luxury car under section 5-10 of the LCT Act when it sells a hearse. The hearse is a commercial vehicle that is not designed for the principal purpose of carrying passengers.

Facts

The entity is a motor car dealer. The entity sells a hearse to a funeral director. The hearse is used for transporting deceased persons to a place of burial.

The selling price of the hearse exceeds the luxury car tax threshold.

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

Reasons for Decision

To make a taxable supply of a luxury car under subsection 5-10(1) of the LCT Act, one of the requirements that must be satisfied is that the car must be a 'luxury car' as defined in section 25-1 of the LCT Act (paragraph 5-10(1)(a)of the LCT Act).

Subsection 25-1(1) of the LCT Act provides that a 'luxury car' is a car whose luxury car tax value exceeds the luxury car tax threshold. The selling price of the hearse exceeds the luxury car tax threshold.

However, paragraph 25-1(2)(c) of the LCT Act provides that a car is not a luxury car if it is a commercial vehicle that is not designed for the principal purpose of carrying passengers.

The term 'commercial vehicle' is not defined in the LCT Act. The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, NSW defines the term 'commercial vehicle' as a vehicle able to carry goods or passengers, and designed for use by business, as a panel van, utility truck, etc.

A hearse is a vehicle that is used for conveying a deceased person to a place of burial as part of the undertaker's business and therefore, falls within the definition of the term 'commercial vehicle'. In addition, a hearse is not designed for the principle purpose of carrying passengers. As the supply of the hearse satisfies the exclusion contained in paragraph 25-1(2)(c) of the LCT Act, it does not fall within the definition of a 'luxury car'.

Therefore, the entity is not making a taxable supply of a luxury car under section 5-10 of the LCT Act when it sells a hearse. The sale of a hearse is not subject to luxury car tax.

Date of decision: 11 June 2004

Legislative References:
A New Tax System (Luxury Car Tax) Act 1999
   section 5-10
   subsection 5-10(1)
   paragraph 5-10(1)(a)
   section 25-1
   subsection 25-1(1)
   paragraph 25-1(2)(c)

Other References:
The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, NSW

Keywords
GST Luxury Car Tax Stream
Luxury vehicles
Taxable supply

Business Line: GST

Date of publication: 16 July 2004

ISSN: 1445-2782

history

	Date:	Version:
	11 June 2004	Original statement
You are here	3 November 2006	Archived

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