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Edited version of your written advice
Authorisation Number: 1013033090111
Date of advice: 22 June 2016
Ruling
Subject: GST and LCT liabilities under a motor vehicle incentive payment
Question 1
If a manufacturer changes their incentive payment system will it be third party consideration for a supply of a vehicle made either by a dealer to a manufacturer or by a dealer to a customer?
Answer
No. The payments are not third party consideration for any supply between the dealer and the manufacturer or as between the dealer and the customer.
Question 2
If the incentive payment is not third party consideration, will the Dealer be liable to LCT under section 5-10 of the A New Tax System (Luxury Car Tax) Act 1999 (the LCT Act)?
Answer
No. LCT is not payable on the proposed incentive payment because the incentive payment is not third party consideration.
Question 3
Do the anti-avoidance provisions, Division 165 of the A New System (Goods and Services Tax) Act 1999 (GST Act), apply to the proposed change to the incentive scheme?
Answer
No, as there is no GST benefit within the meaning of subsection 165-10 of the GST Act.
In the event that a GST benefit could be identified, it could not be said that the sole or dominant purpose or principal effect of the scheme was the obtaining of that GST and/or LCT benefit.
This ruling applies for the following periods:
20XX and following periods.
The scheme commences on:
20XX
Relevant facts and circumstances
You are a motor vehicle manufacturer.
You intend to change your incentive payments system.
Relevant legislative provisions
A New Tax System (Goods and Services Tax) Act 1999 section 9-5; 9-15; 9-75; Division 134 and Division 165.
A New Tax System (Luxury Car Tax) Act 1999 section 5-20; 15-5(1)(b); Divisions 25 and Division 27.
Reasons for decision
Altering the incentive payment system will not alter the GST treatment in this case.