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Edited version of your written advice

Authorisation Number: 1012701903639

Ruling

Subject: Cars for use by disabled people

Question

Can I, a disabled war veteran, buy a new car GST-free before the expiry of two years from the date of the previous purchase of a GST-free new car?

Answer

Yes.

This ruling applies for the following periods:

Not applicable

The scheme commences on:

Not applicable

Relevant facts and circumstances

Relevant legislative provisions

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

Reasons for decision

Under subsection 38-505(1) of the A New tax System (Goods and Services Tax) Act 1999 (GST Act), a supply of a car is GST-free to an individual who:

(Terms marked with an asterisk are defined in section 195-1 of the GST Act)

Subdivision 38-P is defined in section 195-1 of the GST Act as follows:

Subdivision 38-P period, in relation to the supply of a *car to an individual, means the period starting when he or she acquires it and ending at the earliest of the following times:

In this case you purchased a new car GST-free within the last two years. You intended to use it for two years at the time you purchased it. However, due to your changed circumstances, you now wish to purchase another new car (before the expiry of two years).

The key requirement of the relevant legislation is that you must have an "intention" to use the car for two years at the time you purchase it. If your circumstances change, and consequently your intention changes within the two years, it would not bar you from purchasing another new car GST-free within that period.

Therefore, as long as the requirements of subsection 38-505(1) are satisfied, a supply of a new car to you is GST-free.

Please note that the GST-free provision is limited to the extent that the GST inclusive market value of the car does not exceed the luxury car threshold.


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