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Ruling

Subject: GST and importation of a car

Question 1

Is GST payable upon the importation of a car (Car)?

Answer

The importation of the Car will be subject to GST to the extent that the GST-free inclusive market value exceeds $59,133.

Relevant facts and circumstances

You are a TPI who holds a Gold Card and are eligible to purchase GST-free cars under section 38-505 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). You have previously purchased GST-free cars in Australia.

You purchased the Car overseas and are about to import it into Australia. The car is roadworthy and will be registered as a normal road vehicle. The car is for your personal use.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 section 13-10

A New Tax System (Goods and Services Tax) Act 1999 section 38-505

Reasons for decision

Summary

GST is payable on the component of the importation that exceeds the 'car limit'.

Detailed reasoning

GST is payable upon the importation of goods if the transaction is a taxable importation. Subsection 13-5(1) of the GST Act states:

However, the importation is not a taxable importation to the extent that it is a *non-taxable importation.

An importation is a non-taxable importation if it meets the requirements of section 13-10 of the GST Act, this is if:

In your case the equivalent supply of the Car would be GST-free under the provisions of section 38-505 of the GST Act provided that you intend to use the Car for your personal transportation for either:

However subsection 38-505(2) of the GST Act limits the extent of this GST-free treatment. Effectively, if a car has a GST inclusive price that exceeds the 'car limit', the portion of the supply over that limit will be subject to GST. The car limit for the 2012-2013 financial year is $59,133.

As it is your intention to use the Car for your personal transport for either 2 years or 40,000 kilometres, you may make a non-taxable importation of the Car up to $59,133. The residue of the importation above that amount will be subject to GST.

To work out the GST-inclusive value of the car, include the value of any parts, accessories or attachments supplied or imported at the same time as the car.

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