Private ruling: GST and driver services
Published: May 2012

Ruling: Q1: Are you required to be registered for GST under the compulsory registration requirements contained in subsection 144-5(1) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A1: No, you are not required to be registered for GST under the compulsory registration requirements contained in subsection 144-5(1) of the GST Act as you are not making supplies of taxi travel.

Relevant facts and circumstances: You carry on an enterprise providing a driver service (the service) as a sole trader. You are registered for GST. The service involves providing drivers to drive clients home in the clients' own vehicles. The service requires two drivers to be despatched to meet the client. One driver drives the client to the client's destination in the client's vehicle and the other driver follows to collect the client's driver, once the client and the client's vehicle has reached the destination. Your vehicle is used for travelling to meet the client and following the client's vehicle to the client's destination. Your vehicle is registered for business use. You have workers' compensation and public liability insurance policies. Your annual turnover is less that $75,000.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 144-5 | A New Tax System (Goods and Services Tax) Act 1999 subsection 144-5(1) | A New Tax System (Goods and Services Tax) Act 1999 section 195-1.

Reasons for decision: Summary: Section 23-5 of the GST Act provides that you are required to register for GST if you are carrying on an enterprise and your GST turnover meets the registration turnover threshold, which in your case is $75,000. However, special rules are contained in section 144-5 of the GST Act which require entities carrying on an enterprise of supplying taxi travel to be registered for GST even if the entity's GST turnover is below the registration turnover threshold. Section 144-5 of the GST Act states: (1) You are required to be registered if, in *carrying on your enterprise, you supply *taxi travel. (2) It does not matter whether: (a) your *GST turnover meets the *registration turnover threshold; or (b) in *carrying on your enterprise, you make other supplies besides supplies of *taxi travel. (3) This section has effect despite section 23-5 (which is about who is required to be registered). (* denotes a term defined in section 195-1 of the GST Act) You have asked us to consider if the special rules in subsection 144-5 of the GST Act apply to your enterprise of providing a driver service. Taxi travel To determine if subsection 144-5 of the GST act applies in your circumstances, we need to consider if, in carrying on your enterprise, you supply 'taxi travel'. The term 'taxi travel' is defined in section 195-1 of the GST Act as: taxi travel means 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. Their meaning is discussed in ATO Interpretative Decision ATO ID 2002/23 GST and registration of a wedding car operator (ATO ID 2002/23). ATO ID 2002/23 explains that The Macquarie Dictionary 1997 defines 'taxi' as, 'a motor car for public hire, especially one fitted with a taximeter' and 'limousine' as any 'large luxurious car'. Further explanation, in so far as is relevant, is also given 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 have advised that your driver service provides drivers to drive clients home in the clients' own vehicles. Your service requires two drivers to be despatched to meet the client. One driver drives the client to the client's destination in the client's vehicle and the other driver follows to collect the client's driver, once the client and the client's vehicle has reached the destination. Conclusion As you do not drive clients in your vehicle, you do not operate a vehicle for public hire and you do not transport passengers by taxi or limousine. We also consider 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. Therefore, you are not supplying taxi travel as defined in section 195-1 of the GST Act. Consequently, you are not required to be registered for GST under the compulsory registration requirements in subsection 144-5(1) of the GST Act when you only supply driver services.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.