Private ruling: GST-free cars for veterans
Published: July 2014

Ruling: Q1: Are you entitled to purchase another car GST-free before expiry of the two year period? Decision Yes, in your special circumstances, you are entitled to purchase another car GST-free before expiry of the two year period.

Relevant facts and circumstances: • You are a veteran eligible for a pension from the Department of Veteran Affairs (DVA) as a totally and permanently incapacitated (TPI) person. • You purchased a new car GST-free on Date A. • This car malfunctioned for several months and you applied to your state tribunal for a refund. Your case settled recently with a buy back of your vehicle by the dealership who sold it. You now wish to purchase a new car GST-free to replace your previous car. • As two years have not elapsed since you purchased your previous car, you need an urgent private ruling approving the purchase of a replacement car on a GST-free basis.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 (GST Act) - subsection 38-505(1) | A New Tax System (Goods and Services Tax) Act 1999 (GST Act) - subsection 195-1 Reasons for the decision | Subsection 38-505(1) of the GST Act provides that a supply is GST-free if it is a supply of a car to an individual who has served in the defence forces or in any other armed force of Her Majesty and as a result of that service is a veteran to whom section 24 of the Veterans Entitlements Act 1986 applies and receives a pension under Part II of that Act and intends to use the car in his or her personal transportation during all of the Subdivision 38-P period. | Section 195-1 of the GST Act provides that Subdivision 38-P period in relation to the supply of a car to an individual means the period starting when he or she acquires it and ending at the earliest of the following times: | (a) the end of 2 years after the acquisition; | (b) the time when the car is no longer reasonably capable of being used for the purpose for which cars of that kind are ordinarily used; | (c) a time that the Commissioner considers to be appropriate in special circumstances. | We consider that your situation qualifies as special circumstances. Your car has malfunctioned before expiry of the two year period and the dealer who sold it has bought it back. Now you are left without a car for personal transportation. | Considering your special circumstances, we agree that you are eligible to purchase another car GST-free before expiry of the two year period since the purchase of your previous car.