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Edited version of your written advice
Authorisation Number: 1012740464893
Ruling
Subject: Luxury car
Question
Does the vehicle satisfy paragraph 25-1(2)(b) of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) as a car that is specially fitted out for transporting disabled people seated in wheelchairs (unless the supply of the car is GST-free under Subdivision 38-P of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)) and is therefore excluded from the meaning of a luxury car, and is not subject to luxury car tax?.
Answer
Yes.
This ruling applies for the following periods:
From 01 July 2014
The scheme commences on:
01 July 2014
Relevant facts and circumstances
• The entity is registered for the goods and services tax (GST).
• The entity is making a taxable supply of a car in Australia, in the furtherance of its enterprise.
• The car is purpose-built and is capable of carrying up to 5 passengers.
• The car has been specifically designed, engineered and built to carry wheelchair passengers in a seated position.
• The car is capable of carrying both wheelchair and non-wheelchair passengers.
• The car includes the following features:
• Integral fold away ramps and step with an extension designed for easy wheelchair access
• Wheelchair restraint system
• Wheelchair seat belt not secured warning indicator
• Wheelchair door access
• The luxury car tax value of the car exceeds the luxury car tax threshold.
• The supply of the car is not GST-free under Subdivision 38-P of the GST Act.
Relevant legislative provisions
A New Tax System (Luxury Car Tax) Act 1999 subsection 25-1(1),
A New Tax System (Luxury Car Tax) Act 1999 subsection 25-1(2),
A New Tax System (Luxury Car Tax) Act 1999 paragraph 25-1(2)(b),
A New Tax System (Luxury Car Tax) Act 1999 section 27-1, and
A New Tax System (Goods and Services Tax) Act 1999 subdivision 38-P.
Reasons for decision
Luxury car tax (LCT) is payable on taxable supplies of luxury cars.
Section 27-1 of the LCT Act provides that a car means a motor vehicle (except a motor cycle or similar vehicle) that is designed to carry a load of less than 2 tonnes and fewer than 9 passengers or a limousine (regardless of the number of passengers it is designed to carry).
Subsection 25-1(1) of the LCT Act provides that a luxury car is a car, whose luxury car tax value exceeds the luxury car tax threshold.
However, subsection 25-1(2) of the LCT Act excludes certain cars from the definition of a luxury car and you do not have to pay LCT on those cars even if they have a value that is above the LCT threshold.
Paragraph 25-1(2)(b) of the LCT Act provides that cars that are specially fitted out for transporting disabled people seated in wheelchairs are excluded from the definition of luxury car, and are not subject to luxury car tax.
However, if the supply of the car is goods and services tax (GST) free under Subdivision 38-P of the GST Act, then the car is a luxury car if its value is greater than the luxury car tax threshold, and would be subject to luxury car tax.
In this case, the luxury car tax value of the car exceeds the luxury car tax threshold and paragraph 25-1(2)(b) of the LCT Act is relevant for consideration.
The car has been specifically designed, engineered and built to carry wheelchair passengers in a seated position. The supply of the car is not GST-free under Subdivision 38-P of the GST Act. Therefore, the car satisfies the requirement of paragraph 25-1(2)(b) of the LCT Act and is excluded from being a luxury car even if it has a value that is above the LCT threshold.
As the car is not considered to be a luxury car, it is not subject to LCT.