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Edited version of your private ruling
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Ruling
Subject: Purchase of a motor vehicle
Question
As a disabled veteran, am I eligible to purchase a new car from a motor vehicle dealer GST-free?
Answer
Yes, you are eligible to purchase a new car from a motor vehicle dealer GST-free.
Relevant facts and circumstances
You are an eligible veteran with a disability for GST purposes. You have served in the Defence Force.
You are not registered for the goods and services tax (GST).
You do not have a tax file number (TFN) because you are not in an income tax paying situation.
You receive a totally and permanently incapacitated (TPI) pension under the Veteran's Entitlements Act 1986.
You have a TPI Gold Card issued to you by the Department of Veterans' Affairs (DVA).
You purchased a new car from an out of State motor car dealer in the relevant year and you use the car for personal transportation and intend to do so for at least X years more.
The price you paid for the vehicle is under the luxury car tax threshold.
The vehicle was not registered in the State in which you bought it.
You tendered a duly completed and signed declaration (Declaration for an exemption of GST on car or car parts - disabled veterans (Form NAT 3418)) to the car dealer to obtain the vehicle GST-free.
The dealer was vague about the process of obtaining an exemption for the GST and other taxes as the vehicle was not being registered in the State in which it was bought.
Therefore, the dealer did not supply the vehicle GST-free and advised you to apply to the Australian Taxation Office (ATO) regarding this matter.
The dealer issued you with a 21 day permit to drive your car back to the State in which you reside.
You took the car interstate and registered the vehicle with the relevant authorities in your home State.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 (GST Act) Section 38-505.
Reasons for decision
Under subsection 38-505 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), the supply of a car is GST-free when supplied to an individual who has served in the Defence Force or in any other armed force of Her Majesty, and as a result of that service:
§ has lost a leg or both arms; or
§ has had a leg, or both arms, rendered permanently and completely useless; or
§ is a veteran to whom section 24 of the Veterans' Entitlements Act 1986 applies and receives a pension under Part II of that Act; and
§ intends to use the car in his or her personal transportation during all of the 'Subdivision 38-P period'.
§ The GST Act defines the Subdivision 38-P period as the period starting when the person acquires the car and ending at the earliest of: the end of two years after the acquisition;
§ the time when the car is no longer reasonably capable of being used for the purpose for which cars of that kind are ordinarily used; or
§ a time that the Commissioner of Taxation considers to be appropriate in special circumstances.
In this case, you have served in the Defence Force and you are an eligible veteran receiving a TPI pension from the Department of Veterans' Affairs. You have informed us that you intend to use the new car for X years or more for your personal transportation. Therefore, you are eligible to purchase a car from a dealer GST-free.
Please note that where you buy, or register, the vehicle in Australia does not alter your eligibility to purchase the car GST-free. Also, as the price of the car is less than the luxury car tax threshold, you are eligible for the full exemption from GST on the purchase.
To obtain the GST exemption, you must complete the ATO form titled, "Declaration for an exemption of GST in a car or car parts - disabled veterans" (NAT 3418) and present this declaration to your motor vehicle supplier.
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