Edited version of your written advice

Authorisation Number: 1012875072434

Date of advice: 9 September 2015

Ruling

Subject: LCT and refund of LCT paid

Question

Are you entitled to a refund of luxury car tax (LCT) paid on your purchase of the vehicle?

Answer

Yes. You are entitled to a refund of LCT paid on your purchase of the vehicle.

Relevant facts and circumstances

You bought a vehicle in the relevant income year.

You are not registered for GST.

The vehicle has been fitted with flashing light, extension flag and two way radio for, haul road access

The characteristic specifications of the 4x4 wheel drive vehicle are as follows:

• outside length 4783 mm

• wheelbase 2745 mm

• base curb weight (without a driver) 2460 kg

• gross vehicle weight 3175 kg

• payload 715 kg

• ground clearance 227 mm

• seats 5

You claim that the vehicle qualifies as a commercial vehicle as the majority of the designed load carrying capacity of the vehicle is not attributable to its passenger carrying capacity.

You want a refund of the LCT paid.

Relevant legislative provisions

A New Tax System (Luxury Car Tax) Act 1999 section 25-1

Reasons for decision

Paragraph 25-1(2)(c) of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) provides that a car is not a luxury car if it is a commercial vehicle that is not designed for the principal purpose of carrying passengers.

All subsequent legislative references in the Ruling are to the LCT Act unless otherwise indicated.

Commercial vehicle

The term 'commercial vehicle' is not defined in the LCT Act and therefore, the ordinary meaning of the words applies. The Macquarie Dictionary (Australia) gives the following meaning to the term 'commercial vehicle':

a vehicle able to carry goods or passengers, and designated for use by businesses, as a panel van, utility, etc.'

In this instance what needs to be established is whether the vehicle described above in the facts are designed for the principal purpose of carrying goods for business or trade.

Dual purpose

Some vehicles with a load carrying capacity of less than two tonnes can be designed to carry both passengers and goods. These vehicles include: dual cab vehicles; crew cab vehicles; and utility vehicles.

These vehicles are referred to as dual purpose vehicles. The principal purpose of such a vehicle depends on the load carrying capacity of the vehicle and whether it is designed to carry mainly passengers or goods.

The Vehicle Standard (Australian Design Rule - Definitions and Vehicle Categories) 2005, (ADR) (The Australian Design Rules) states that:

A vehicle constructed for both the carriage of persons and the carriage of goods shall be considered to be primarily for the carriage of goods if the number of seating positions times 68kg is less than 50 percent of the difference between the 'Gross Vehicle Mass' and the 'Un-laden Mass'.

Thus, the process to determine whether the dual purpose vehicle supplied constitutes a luxury car is as follows:

• determine whether the LCT value of the vehicle exceeds the LCT threshold. If so;

• calculate the difference between the gross vehicle mass and the un-laden mass of the vehicle in kilograms and then calculate 50% of that difference;

• calculate the total passenger weight by multiplying the total seating capacity including the driver by 68kg;

• determine whether the total passenger weight exceeds 50% of the difference between the gross vehicle mass and the un-laden mass;

• if so, the principal purpose of the vehicle is to carry passengers and it is a luxury car within the meaning of section 25-1; and

• If not, the principal purpose of the vehicle is for the carriage of goods and it is not a luxury car within the meaning of section 25-1.

From the information provided, in relation to the gross vehicle mass, un-laden mass and the seating capacity including the driver, we can conclude that the majority of the designed load carrying capacity of the vehicle described in this ruling will not be attributable to its passenger carrying capacity.

As the majority of the designed load carrying capacity of the vehicle is not attributable to its passenger carrying capacity; the vehicle is not designed for the purpose of carrying passengers. As such the vehicle is excluded from being a luxury car by virtue of paragraph 25-1(2)(c).

Accordingly, no luxury car tax (LCT) is payable on the supply of the vehicle.

You are entitled for a refund of the LCT paid. To obtain a refund of the LCT paid you will need to fill in the attached form - Application for luxury car tax refund - entities not registered for GST and mail it to the address on the form.