Private ruling: GST and registration
Published: January 2015

Ruling: Q1: Are you liable for GST on your supplies relating to your driving a limousine? | A1: Yes.

Relevant facts and circumstances: You are not registered for GST. You are a self-employed subcontractor providing your services to an entity who provides limousine services (the Company). You carry on an enterprise providing services consisting primarily of transporting customers to and from the airport and also other events such as weddings and other celebratory functions including school balls and birthdays. The Company own the vehicles you drive and invoice the customers directly. You receive a set percentage of the fares charged to customers for the jobs you complete. You are not an employee of the Company and the Company does not withhold tax in regard to payments made to you for your services. You are not permitted to canvas your own jobs and all jobs are allocated by the Company. You do not have a written agreement with the Company detailing your duties and responsibilities or terms and conditions of your engagement. The Company provides a fuel card with vehicles for use by the drivers. You are responsible for cleaning the vehicles after use. You do not invoice the Company for your services. On receipt of payment from the Company for your services, you provide them with documentation acknowledging you have received payment.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-40, and | A New Tax System (Goods and Services Tax) Act 1999 Division 144.

Reasons for decision: Summary: Section 9-40 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that you are liable for GST on any taxable supply that you make. You make a taxable supply if you are registered or required to be registered for GST and: • you make the supply for payment • you make the supply in the course of operating your business, and • the supply is connected with Australia. A supply is not a taxable sale if it is a GST-free or input taxed sale. In this case you make the supply of your services in the course of operating your sub-contracting business for payment and your supply is connected to Australia as your service is provided in Australia. Your supplies are neither GST-free nor input taxed. As you are not registered for GST, the issue of whether you are making taxable supplies is dependent on whether you are required to be registered for GST. Generally, you are required to be registered for GST if you carry on an enterprise and your annual turnover is $75,000 or more ($150,000 for non-profit bodies). However, for taxi drivers, including chauffeur driven limousines and hire cars, there is no registration turnover threshold. This means that anyone who drives a taxi, chauffeur driven limousine or hire car, must register for GST regardless of their turnover, unless they are an employee for pay as you go withholding (PAYG withholding) purposes. As such, you are required to be registered for GST regardless of your turnover. Given you satisfy the other criteria of making a taxable supply, you will be making taxable supplies when you provide your driving services and therefore will be liable for GST pursuant to section 9-40 of the GST Act.