Private ruling: GST and LCT liabilities under a motor vehicle incentive payment
Date of advice: 22 June 2016
Published: March 2017
Ruling period: 20XX and following periods.
Date scheme commenced: 20XX

Ruling: Q1: If a manufacturer changes their incentive payment system will it be third party consideration for a supply of a vehicle made either by a dealer to a manufacturer or by a dealer to a customer? | A1: No. The payments are not third party consideration for any supply between the dealer and the manufacturer or as between the dealer and the customer. | Q2: If the incentive payment is not third party consideration, will the Dealer be liable to LCT under section 5-10 of the A New Tax System (Luxury Car Tax) Act 1999 (the LCT Act)? | A2: No. LCT is not payable on the proposed incentive payment because the incentive payment is not third party consideration. | Q3: Do the anti-avoidance provisions, Division 165 of the A New System (Goods and Services Tax) Act 1999 (GST Act), apply to the proposed change to the incentive scheme? | A3: No, as there is no GST benefit within the meaning of subsection 165-10 of the GST Act. In the event that a GST benefit could be identified, it could not be said that the sole or dominant purpose or principal effect of the scheme was the obtaining of that GST and/or LCT benefit.

Relevant facts and circumstances: You are a motor vehicle manufacturer. You intend to change your incentive payments system.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 9-5; 9-15; 9-75; Division 134 and Division 165. | A New Tax System (Luxury Car Tax) Act 1999 section 5-20; 15-5(1)(b); Divisions 25 and Division 27.

Reasons for decision: Summary: Altering the incentive payment system will not alter the GST treatment in this case.