ATO ID 2002/24: GST and reception and transfer services
Date of decision: 10 September 2001
Business line: Indirect Tax

Issue
Is the entity, a supplier of reception and transfer services to overseas students, required to be registered for goods and services tax (GST), in accordance with the compulsory registration requirements in subsection 144-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)?

Decision
No, the entity is not required to be registered for GST in accordance with the compulsory registration requirements under subsection 144-5(1) of the GST Act.

Facts
The entity is a supplier of reception and transfer services to overseas students. The entity supplies the services to the students upon their arrival in Australia. As part of this service, the entity deals with any problems facing the students upon their arrival including lost baggage and Customs, and provides the students with information on schools, relevant local conditions, settling in services and general orientation activities. Sometimes the entity uses its vehicle to convey the overseas students from the airport to the students accommodation. The entity's vehicle is not a limousine. The entity receives a standard amount for the reception and transfer services it provides to each student. The entity's current and projected GST turnover is below the registration turnover threshold in section 23-15 of the GST Act.

Reasons for decision
Summary: Under subsection 144-5(1) of the GST Act, an entity is required to be registered for GST if, in the course of 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. As the entity's vehicle is not a limousine, it remains to be determined whether the services that the entity provides amounts to transporting passengers, by taxi, for fares. The word 'taxi' is not defined in the GST Act and accordingly takes on its ordinary meaning. The Macquarie Dictionary (1997), defines 'taxi' as, 'a motor car for public hire, especially one fitted with a taximeter.' In this case, the entity supplies reception and transfer services. The conveying of passengers from the airport to their accommodation is part of the reception and transfer service that the entity provides. The entity does not use its vehicle in a taxi like manner or operate its vehicle on a fare for distance or time arrangement. Additionally, the entity's vehicle is not available for public hire. The entity's vehicle is not a 'taxi' and it is considered that the entity is not providing a service that is similar to services provided in the taxi industry nor is it providing a service that essentially competes with the taxi industry. Accordingly, the entity is not supplying taxi travel as defined in section 195-1 of the GST Act. As the entity is not providing taxi travel, it is not required to register for GST in accordance with the compulsory registration requirements in subsection 144-5(1) of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 section 23-15 subsection 144-5(1) section 195-1
Other references: The Macquarie Dictionary, (1997), 3rd edn, The Macquarie Library Pty Ltd, New South Wales
Subject references: Goods & services tax GST registration GST annual turnover GST turnover threshold Required to be registered GST special rules Registration of taxis