| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012410755801
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: GST and purchasing a car
Question
Are you entitled to purchase a car GST-free?
Answer
No.
Relevant facts and circumstances
· You are not registered for goods and services tax (GST).
· You were issued with a permanent disability certificate (a certificate issued for life) by Health Services Australia several years ago. This certificate states that you are unable to use public transport.
· When the certificate was issued you were gainfully employed but have given up your employment due to health reasons and not because you wanted to.
· You believe that the permanent disability certificate can still be used and should allow you to purchase a car GST-free.
· You have now purchased a new car.
· You require the car to attend regular medical appointments and to maintain a level of independence.
· You are not a disabled veteran.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) 1999
Subsection 38-510(1).
Reasons for decision
An individual's entitlement to purchase a car GST-free is created by legislation either through the A New System (Goods and Services Tax) Act 1999 (GST Act) or some other Act. An individual meeting the requirements of this legislation would then be entitled to purchase a car GST-free.
Given this, under subsection 38-510(1) of the GST Act a GST registered car dealer is entitled to sell a car GST-free provided certain circumstances are met. Subsection 38-510(1) the GST Act states:
(1) A supply is GST-free if it is a supply of a *car to an individual who:
(a) has a current disability certificate issued by:
(i) the person holding the position of Managing Director of the nominated company (within the meaning of Part 2 of the Hearing Services and AGHS Reform Act 1997); or
(ii) an officer or employee of that company who is authorised in writing by the Managing Director for the purposes of this section;
certifying that the individual has lost the use of one or more limbs to such an extent that he or she is unable to use public transport; and
(b) intends to use the car in his or her personal transportation to or from gainful employment during all of the *Subdivision 38-P period.
Note that the asterisks indicate a defined term in the GST Act.
To make a GST-free sale under this legislative provision, a car dealer must ensure that both paragraphs of the provision are satisfied, that is, the individual holds the necessary disability certificate and is also gainfully employed. Where either requirement is not met, the car dealer would not be entitled to make a GST-free sale.
In your case, although you have been issued with the necessary disability certificate, you were not gainfully employed at the time of the purchase and therefore, the car dealer is not entitled to sell you a GST-free car under this legislative provision.
There are no other legislative provisions in the GST Act or any other Act that would allow a car dealer to sell a GST-free car to an individual (except where the individual is a disabled veteran), albeit the individual requires the car for medical and personal reasons.
Treasury
Treasury is the Commonwealth Department having the responsibility for amending the GST legislation. If you consider the legislation to be harsh or unfair then you would need to contact them either directly or through your Commonwealth Member of Parliament.
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).
