ATO ID 2004/523: GST and registration of motor powered tricycle operator
Date of decision: 8 October 2001
Business line: Indirect Tax

Issue
Is the entity, a business operator, 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 (GST Act), when the entity transports passengers, for a fare, by way of a motor powered tricycle?

Decision
No, the entity is not required to be registered for GST in accordance with the compulsory registration requirements in subsection 144-5(1) of the GST Act when the entity transports passengers, for a fare, by way of a motor powered tricycle.

Facts
The entity is a business operator. The entity transports passengers by way of a motor powered tricycle and charges its passengers a fare. The motor powered tricycle is a motorcycle with additional seating capacity constructed to transport passengers. The entity's current GST turnover and projected GST turnover are below the registration turnover thresholds as set out in section 23-15 of the GST Act.

Reasons for decision
Summary: Subsection 144-5(1) of the GST Act provides that an entity is required to be registered for GST if, in carrying on its enterprise, it supplies taxi travel. The term 'taxi travel' is defined in section 195-1 of the GST Act 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 it is appropriate to consider their ordinary meaning. The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, NSW defines 'taxi' as 'a motor car for public hire, especially one fitted with a taximeter' and the term 'limousine' as 'any large luxurious car'. The motor powered tricycle supplied by the entity is a motorcycle with additional seating capacity constructed to transport passengers and as such, does not fall within the definition of either a taxi or a limousine. Although the entity charges a fare for its supply of transport by way of motor powered tricycle, the motor powered tricycle is neither a taxi nor a limousine for the purposes of the GST Act. As such, the supply of transport by way of motor powered tricycle is not the supply of 'taxi travel' as defined in section 195-1 of the GST Act. Therefore, the entity is not required to be registered for GST in accordance with the compulsory registration requirements in subsection 144-5(1) of the GST Act when the entity transports passengers, for a fare, by way of a motor powered tricycle. Note. When an entity's current or projected GST turnover from its enterprise meets the registration turnover threshold in section 23-15 of the GST Act it will be required to registered for GST under section 23-5 of the GST Act.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 subsection 144-5(1) section 195-1
Related ATO interpretative decisions: ATO ID 2004/478
Other references: The Macquarie Dictionary, 1997, 3rd edn, The Macquarie Library Pty Ltd, NSW
Subject references: Goods and services tax GST special rules Registration of taxis