TAXATION RULING NO. ST 2440

ST 2440

SALES TAX : MOTOR CYCLES USED IN AGRICULTURAL INDUSTRY: TWO-WHEELED, THREE-WHEELED AND FOUR-WHEELED

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FOI status:

May be releasedFOI number: I 1211363

PREAMBLE

The purpose of this Ruling is to advise of the models of motor cycles that currently are accepted as qualifying for exemption from sales tax under subitem 13(1), First Schedule, when purchased for use in agricultural industry.

2. It should be noted that for sales tax purposes the term "agricultural industry" does not include persons engaged in the fishing industry. Thus persons engaged in that industry cannot purchase motor cycles for use in that industry free of sales tax.

FACTS

3. Certain models of motor cycles are accepted as machinery of a kind used exclusively, or primarily and principally, in agricultural industry and qualify for exemption when sold for use in agricultural industry. Exemption is limited to those models that are of a particular design and have characteristics that make them suitable for use on agricultural properties. They must also be models that are of a kind sold principally to primary producers.

4. Models which have been accepted as used predominantly in the agricultural industry incorporate a number of characteristics which have the cumulative effect of distinguishing them from general purpose road and trail motor cycles. The main distinguishing features are:-

(a)

engine geared for travel at extremely low speeds, or fitted with dual rear sprockets or single oversize rear sprocket;

(b)

engine protection plate or guard fitted to the base of the engine, or engine protected by the frame of the motor cycle;

(c)

upswept or high level exhaust;

(d)

brief type mudguards with no valances and/or high clearance mudguards;

(e)

knobbled tread or similar heavy duty tyres;

(f)

seating provision for one person only; and

(g)

heavy duty carrier at rear.

5. Some models have qualified for exemption in the form produced for the market. Others have been accepted as qualifying for exemption subject to certain modifications being made to make them suitable for use in agricultural industry and not for general usage.

RULING

Below is a list of motor cycles (subject to modifications as indicated) that have been accepted as qualifying for exemption under subitem 13(1) when purchased for use in agricultural industry.

COMMISSIONER OF TAXATION
29 September 1988

References

ATO references:
NO 87/3932-3

Date of effect:
Immediate

Related Rulings/Determinations:

ST 2036
ST 2068
ST 2084
ST 2125
ST 2270

Subject References:
MOTOR CYCLES FOR USE IN AGRICULTURAL INDUSTRY

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEM 13, FIRST SCHEDULE