Private ruling: GST and motor spare parts for eligible veterans
Published: June 2014

Ruling: Q1: Are you allowed to purchase spare parts for your car GST-free? Decision Yes, you are allowed to purchase spare parts for your car GST-free.

Relevant facts and circumstances: • You are a disabled veteran with. • You own a car for your personal transportation. Recently, you bought spare parts for the car costing $A. In addition, the dealer charged you goods and services tax (GST) equal to $A x 0.1 for the parts. • You showed to the dealer the completed 'Declaration for an exemption of GST on a car or car parts - disabled veterans'. He did not accept it. • Thereafter you showed him the ATO fact sheet 'GST and LCT on cars - people with disabilities'. He still refused to change his mind. He wanted something in writing from the ATO.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 - section 38-505 Reasons for the decision | Section 38-505 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that: | 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 (a) intends to use the car in his or her personal transportation during all of the Subdivision 38-P period. | Subsection 38-505(4) of the GST Act provides that a supply is GST-free if it is a supply of car parts that are for a car for an individual to whom paragraphs (1)(a), (b) and (c) apply. | As per the facts provided, you are a disabled veteran, who was eligible to purchase a car GST-free under subsection 38-505(1) of the GST Act. Therefore, you are eligible to purchase car parts for your car GST-free. Consequently the three centre bearings for the tail shaft of your car are GST-free. | In this situation, the car dealer has charged GST on the parts. | We would suggest you to show this ruling to the dealer and ask him to refund the GST amount charged to you. The dealer could get a refund of that amount by way of a decreasing adjustment in their business activity statement.