ATO ID 2002/23: GST and registration of a wedding car operator
Date of decision: 10 September 2001
Business line: Indirect Tax

Issue
Is the entity, a wedding car operator, required to be registered for goods and services tax (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 it supplies car hire and chauffeuring services for weddings in accordance with a restricted hire licence?

Decision
No, the entity is not required to be registered for GST as per the compulsory registration requirements in subsection 144-5(1) of the GST Act when it supplies car hire and chauffeuring services for weddings in accordance with a restricted hire licence.

Facts
The entity is a wedding car operator. The entity supplies car hire and chauffeuring services for weddings but only uses its vehicles for the transport of passengers on the day of a wedding. The entity charges a fee for this service. The entity is accredited by the relevant transport authority as a private hire vehicle operator. The entity's vehicle is only authorised by the Department of Motor Transport to be used for the transport of wedding parties on the day of the wedding. The entity's current GST turnover and projected GST turnover are 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 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 this case, the entity is a private hire vehicle operator and only uses its vehicles in accordance with the restricted licences issued by the relevant transport authority for the transport of passengers on the day of their wedding. The entity is not providing a service that is similar to the services provided by the taxi industry nor is it providing a service that essentially competes with the taxi industry. As such, the entity is not providing travel in a 'limousine' for the purposes of the GST Act and therefore, the entity is not supplying taxi travel as defined in section 195-1 of the GST Act. The entity is not required to be registered for GST as per the compulsory registration requirements in subsection 144-5(1) of the GST Act when it only supplies car hire and chauffeuring services for weddings in accordance with a restricted hire licence.

Legislative references: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 section 23-15 Division 144 subsection 144-5(1) subsection 182-10(2) paragraph 182-10(2)(a) 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 Required to be registered GST special rules Registration of taxis