Private ruling: GST and the supply of motorhomes to TPI veterans
Published: June 2015

Ruling: Q1: Is the supply of a motor vehicle that is designed to carry less than nine passengers and has a load carrying capacity of less than one tonne a GST-free supply where it is supplied to a Veteran with a TPI certificate? | A1: A motor vehicle that is designed to carry less than nine passengers and has a load carrying capacity of less than one tonne is considered as a car. Therefore, where a motor vehicle that is a car is supplied to a veteran with a TPI certificate that supply is a GST-free supply where the other requirements of section 38- 305 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) are satisfied. However, the supply is not GST-free to the extent that the GST inclusive market value of the motor vehicle exceeds the car limit.

Relevant facts and circumstances: You are registered for the goods and services tax (GST) and supply motor vehicles in the course of your enterprise. The motor vehicles that you sell: - are built on a light truck chassis, - are designed to carry four passengers, - have a load carrying capacity of less than one tonne. The GST inclusive market value of the motor vehicles exceeds the car limit.

Relevant legislative provisions: Section 38-305 of the A New Tax System (Goods and Services Tax) Act 1999

Reasons for decision: Summary: Section 38-305 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) states: (1) A supply is GST-free if it is a supply of a *car to an individual who: (a) has served in the Defence Force or in any other armed force of Her Majesty; and (b) as a result of that service: (i) has lost a leg or both arms; or (ii) has had a leg, or both arms, rendered permanently and completely useless; or (iii) is a veteran to whom section 24 of the Veterans' Entitlements Act 1986 applies and receives a pension under Part II of that Act; or (iv) is receiving a Special Rate Disability Pension under Part 6 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004 , or satisfies the eligibility criteria in section 199 of that Act; and (c) intends to use the car in his or her personal transportation during all of the *Subdivision 38-P period. (2) However, a supply covered by subsection (1) is not GST-free to the extent that the *GST inclusive market value of the *car exceeds the *car limit. (terms marked with asterisks (*) are defined in section 195-1 of the GST Act) Therefore if the supply of motor vehicles that you sell comes within the definition of a car and meets the other requirements of section 38-305 of the GST Act, it will be a GST-free supply. In this regard, what needs to be determined is whether a motorhome is a car. Section 195-1 of the GST Act provides that 'car for GST purposes has the meaning given by section 995-1 of the Income Tax Assessment Act 1997 (ITAA 1997). ITAA 1997 defines a car as follows: car means a * motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers. Further, the ITAA defines a motor vehicle as follows: motor vehicle means any motor-powered road vehicle (including a 4 wheel drive vehicle). As the motor vehicles that you supply are designed to carry a load of less than one tonne and fewer than 9 passengers, the motor vehicles that you sell are considered as cars. Motor vehicles that are designed to carry a load of less than one tonne and fewer than 9 passengers are considered as cars. Accordingly, even though the motor vehicles that you sell are built on light truck chassis, if they come within the definition of a car, the supply of these motor vehicles will be GST-free where the requirements of section 38-305 of the GST Act are satisfied. However, pursuant to subsection 38-305(2) of the GST Act, the amount of the GST inclusive market value of the motor vehicles that exceeds the car limit will not be GST-free. The following is provided for your information: You are a veteran with a disability for GST purposes if you have served in the Australian Defence Force or any other Commonwealth armed force and as a result of that service: • has lost a leg or both arms; or • has had a leg or both arms rendered permanently and completely useless; or • is a veteran to whom section 24 of the Veterans' Entitlements Act1986 applies and receives a pension under Part II of that Act; or • is receiving a Special Rate Disability Pension; and • intends to use the car in your personal transportation. The eligibility criteria are defined by section 38-505 of the A New Tax System (Goods and Services Tax) Act 1999 . To show that you are eligible, you can either : • use your gold repatriation health card (embossed 'TPI'), or • obtain a certificate from the Department of Veterans' Affairs External Link confirming that you are eligible. Even if you have a gold repatriation health card, you cannot purchase a car GST-free if you are any of the following: • a cadet • a cadet's officer • a cadet's instructor • a 'declared member'.