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Edited version of private ruling
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Ruling
Subject: Luxury Car Tax
Question
Are you liable to pay luxury car tax on the importation of two motor vehicles?
Answer
Yes. You are liable to pay luxury car tax on the importation of two motor vehicles.
Relevant facts and circumstances
You are an individual who is not registered for GST.
You wish to import two motor vehicles.
You have obtained approval to import the vehicles.
The vehicles will be used in Australia.
Reasons for decision
Section 7-5 of A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) states:
You must pay the luxury car tax payable on any taxable importation of a luxury car that you make.
Subsection 7-10(1) of the LCT Act states:
You make a taxable importation of a luxury car if:
a) the luxury car is imported; and
b) you enter the car for home consumption.
Subsection 7-10(3) of the LCT Act provides exemptions if you quote an ABN, have already paid LCT, the car is covered by certain items in Schedule 4 to the Customs Tariff or the car is a non-taxable re-importation. None of these exemptions apply to you. You enter a car for home consumption when it is to be used in Australia.
Subsection 25-1(1) of the LCT Act provides the meaning of a luxury car as a car whose luxury car tax value exceeds the luxury car tax threshold.
Subsection 25-1(2) also states that a car is not a luxury car if it is an emergency vehicle, fitted for transport disable people seated in wheelchairs, a commercial vehicle or a motor home or campervan.
Section 27-1 of the LCT Act states:
car means a motor vehicle (except a motor cycle or similar vehicle) that is:
(a) designed to carry a load of less than 2 tonnes and fewer than 9 passengers; or
(b) a limousine (regardless of the number of passengers it is designed to carry).
Section 27-1 of the LCT also defines a motor vehicle as 'a motor-powered road vehicle (including a 4 wheel drive vehicle)'.
The LCT Act does not provide a definition for a motor powered road vehicle. However, section 5 of the Motor Vehicle Standards Act 1989, provides guidance in a definition of a road motor vehicle which states:
road motor vehicle means:
(a) a motor vehicle designed solely or principally for the transport on public roads of people, animals or goods; or
(b) a motor vehicle that is permitted to be used on public roads.
The Luxury Car Tax guide (NAT 3394) states that a car does not include 'racing and rally cars that are not road vehicles and cannot be registered for use on public roads in any country in the world. These racing or rally cars are designed for use only on rally or racing circuits'. (see page 3 of NAT 3394)
Goods and Services Tax Advice GSTA TPP 077 Goods and services tax: Can an entity that purchases a rally car with a market value that exceeds the car limit claim input tax credits in excess of 1/11th of the car limit? states that, in relation to racing or rally cars, if the design of the vehicle makes it a class of vehicle suitable and capable of being registered for use on public roads anywhere in the world, it is a car.
In applying the above principle, information provided on the website in relation to these vehicles indicates that both fit the definition of a car in that they have been designed for, and have been registered and used on public roads in other countries around the world.
As such, they are 'cars' within the definition of the LCT Act in that they are motor vehicles designed solely or principally for transport on public roads of people, and are designed to carry a load of less than 2 tonnes and fewer than 9 passengers.
These vehicles by the nature of their values exceed the luxury car tax threshold and as such are luxury cars. They are not classified as an emergency vehicle, fitted for transport disable people seated in wheelchairs, a commercial vehicle or a motor home or campervan. Therefore they are not excluded from the definition of a luxury car.
The intended use of the vehicles is not the determining factor in this case. You intend to import two vehicles for exhibition purposes, which are classified as cars for the purpose of the LCT Act. As the value of each car will exceed the luxury car tax threshold, you will be making a taxable importation of a luxury car.
As such, you will be liable to pay luxury car tax on the importation of these vehicles.
Additional information
Please note that under Division 13 of the LCT Act, an amount of luxury car tax on a taxable importation of a luxury car is not payable if a security or undertaking is given under section 162 or 162A for the Customs Act 1901. Section 162 and 162A of the Customs Act 1901 allows delivery of imported goods if the importer gives a security or undertaking to pay any customs duty, GST and luxury car tax relating to the importation. This matter can be pursued further by contacting Customs.