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Ruling
Subject: GST and person with disabilities
Question
Are you entitled to purchase a car GST-free?
Advice:
No.
Relevant facts:
You are not registered for goods and services tax (GST).
You advised that you have lost the use of one of your limbs such that you cannot use public transport.
You hold a current certificate of medical eligibility (CME) issued by Medibank Health Solutions which certified that you are a disabled person who has lost the use of one or more limbs to such an extent that you are not able to use public transport.
You advised that your only source of income is pensions.
You are not engaged in any paid employment and are not involved in any business activities.
Relevant legislative provisions:
A New Tax System (Goods and Services Tax) Act 1999 subsection 38-510(1).
Reasons for decision
Section 38-510 of the A New Tax System (Goods and Services Tax Act) 1999 (GST Act) sets out the requirements for a supply of a car to a person with disabilities to be GST-free.
Under subsection 38-510(1) of the GST Act a person with disabilities can purchase a car (or car parts) is GST-free if:
· the person holds a current disability certificate issued by Medibank Health Solutions which certifies that the person has lost the use of one or more limbs and is unable to use public transport; and
· the person intends to use the car for his or her personal transportation to or from gainful employment for a period of two years or until the car has travelled 40 000 kilometres.
As you currently hold a CME certifying that you are a disabled person who has lost the use of one or more limbs and you are not able to use public transport, you satisfy paragraph 38-510(1)(a) of the GST Act.
The next criterion is whether you intend to use the car for your personal transportation to or from gainful employment (for a period of two years or until the car has travelled 40 000 kilometres).
Gainful employment
The term 'gainful employment' is not defined in the GST Act. However, it is considered that a person is undertaking 'gainful employment' where the person is:
· undertaking paid work, or working in his or her own business, for at least eight hours weekly on a regular basis; and
· receiving a monetary reward which is commensurate to the person's age, experience and capabilities.
Therefore we do not consider a person is not undertaking gainful employment where he or she is not engaged in a paid employment and is not involved in any business activities.
Where a person with disabilities is not gainfully employed, they do not satisfy the criterion that they intend to use the car in their personal transportation to or from gainful employment for the period of two years or until the car has travelled 40 000 kilometres.
You advised that your current income source is pensions. You are not engaged in any paid employment and are not involved in any business activities to satisfy the conditions for gainful employment.
Therefore as you are not gainfully employed, you do not satisfy the criterion that you intend to use the car for your personal transportation to or from gainful employment for the period of two years or until the car has travelled 40 000 kilometres. You are therefore not entitled to buy a car (or car parts) GST-free even if you hold a current CME.
You may find more details on people with disabilities purchasing GST-free cars in the fact sheet GST and LCT on cars you buy - people with disabilities (NAT 4325).
Please note:
Although you cannot purchase your car or car parts GST-free, you may purchase medical aids and appliance for your car GST-free. The medical aids and appliances are specifically designed for people with disabilities. We enclose a copy of the fact sheet "GST and medical aids and appliances" (Nat 4651) for your reference.