Edited version of your written advice

Authorisation Number: 1051432578730

Date of advice: 26 September 2018

Ruling

Subject: GST registration

Question

Are you required to be registered for the goods and services tax (GST)?

Answer

No, as your current GST turnover is less than the GST registration threshold you are not required to be registered for GST. The current registration turnover threshold (other than for non-profit bodies) is $75,000.

If at any point your GST turnover meets the registration turnover threshold you will be required to be registered for GST.

You are not required to be registered for GST as per the compulsory registration requirements in subsection 144-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) when you supply vehicle services for weddings and school formals.

This ruling applies from 1 July 2018.

Relevant facts and circumstances

● You have an ABN but are not currently registered for GST.

● You advised that your current GST turnover is below the GST registration threshold.

● You supply car hire and chauffeuring services for weddings and school formals.

● You state that you are not in competition with the taxi industry and are only available for private hire. You are available for private hire by appointment only.

● You only book out your cars once per day you do not take multiple bookings.

● The driving licences issued by the relevant state authority and held by your drivers do not allow drivers to operate from taxi ranks, 'ply for hire' or tout for the purpose of hire; and must not display signage that presents it in a manner resembling a taxi.

Relevant legislative provisions

section 23-5 of A New Tax System (Goods and Services Tax) Act 1999

section 23-15 of A New Tax System (Goods and Services Tax) Act 1999

Division 144 of A New Tax System (Goods and Services Tax) Act 1999

subsection 144-5(1) of A New Tax System (Goods and Services Tax) Act 1999

subsection 182-10(2) of A New Tax System (Goods and Services Tax) Act 1999

paragraph 182-10(2)(a) of A New Tax System (Goods and Services Tax) Act 1999

section 195-1 of A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision

Under section 23-5 of the GST Act entities carrying on an enterprise must register for GST if their GST turnover meets the registration turnover threshold. If an entity's GST turnover is below the registration turnover threshold, that entity does not have to register for GST but it may do so if it chooses.

Subsection 188-10(1) of the GST Act provides:

(1) You have a GST turnover that meets a particular turnover threshold if:

(a) your current GST turnover is at or above the turnover threshold, and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold; or

(b) your projected GST turnover is at or above the turnover threshold.

The current registration turnover threshold (other than for non-profit bodies) is $75,000.

Under subsection 144-5(1) of the GST Act, an entity is required to be registered for GST if, in carrying on its enterprise, it supplies taxi travel. Section 195-1 of the GST Act defines taxi travel to mean travel that involves transporting passengers, by taxi or limousine, for fares.

The terms 'taxi' and 'limousine' are not defined in the GST Act and therefore take on their ordinary meaning. The Macquarie Dictionary 1997, defines 'taxi' as, 'a motor car for public hire, especially one fitted with a taximeter'. In accordance with the restricted hire licence, the entity's vehicle is only available for private hire. The vehicle is not available for public hire, and therefore, the wedding car is not a taxi.

The Macquarie Dictionary 1997 defines 'limousine' as any large luxurious car.' Some, if not all, of the vehicles that the entity uses would satisfy the ordinary definition of a limousine.

However, the definition of 'limousine' should be interpreted in accordance with the context in which the term 'limousine' is used. The term 'limousine' is included in the definition of taxi travel for the purposes of Division 144 of the GST Act. The explanatory section in Division 144 states that 'Taxi operators are required to be registered, regardless of turnover.' Subsection 182-10(2) of the GST Act provides that while explanatory sections are not operative provisions they may be considered in certain circumstances. Paragraph 182-10(2)(a) of the GST Act provides that explanatory provisions can be used to determine the purpose or object underlying the provision.

The purpose of Division 144 of the GST Act is to require all taxi operators to register for GST. The term 'limousine' is therefore used in the context of taxi operations. Taking this into account, it is considered that only limousine services that are provided by the taxi industry or are similar to and essentially in competition with the taxi industry are 'taxi travel'.

In your case, you are a private hire vehicle operator that only uses its vehicles for the transport of passengers on their wedding day or school formal. Your vehicles and driver are only available for private hire by appointment only. You only book out your cars once per day you do not take multiple bookings.

Based on the facts provided you are not providing a service that is similar to the services provided by the taxi industry nor are you providing a service that essentially competes with the taxi industry. As such, you are not providing travel in a 'limousine' for the purposes of the GST Act and therefore, you are not supplying taxi travel as defined in section 195-1 of the GST Act.

Therefore, you are not required to be registered for GST as per the compulsory registration requirements in subsection 144-5(1) of the GST Act when you supply car hire and chauffeuring services for weddings and school formals.