Private ruling: GST and registration
Date of advice: 1 February 2016
Published: March 2016

Ruling: Q1: Are you required to be registered for GST for the period in which you provided ride-sourcing services? | A1: Yes. You are required to be registered for GST for the period in which you provided ride-sourcing services.

Relevant facts and circumstances: You are not registered for GST. You provide ride-sourcing services through another entity (the facilitator). You provided your services for a short period. During this period, you worked from two hours to more than 9 hours a day. In some days, you did not work at all. The facilitator collected the fares from the passengers and paid you weekly. During the period, you incurred expenses which include petrol, parking fees, fines, registration, insurance and depreciation.

Relevant legislative provisions: A New Tax System (Goods and Services Tax) Act 1999 section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 section 144-5

Reasons for decision: Summary: Under section 23-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), you are required to be registered if: (a) you are carrying on an enterprise; and (b) your GST turnover meets the registration turnover threshold, currently $75,000 ($150,000 for non-profit entities). However, section 144-5 of the GST Act provides that you are required to be registered if you provide taxi travel. It does not matter whether your GST turnover meets the registration turnover threshold; or you make other supplies besides supplies of taxi travel. Your arrangement with facilitator is commonly referred to as 'ride-sourcing' where you (as a driver): • make your car available for public hire, where passengers may, for example, use a website or smart phone app provided by the facilitator to search for and contact you; and • use your car to transport passengers for a payment (fare) with a view to a profit. For GST purposes, you are providing taxi travel if you provide ride-sourcing services. Therefore, you supply taxi travel when you provide your services through the facilitator. Accordingly, you are required to be registered from the time you started providing your services. Taxable supply As you are required to be registered for GST, the supply of your services is a taxable supply and is subject to GST. GST must be calculated on the full fare, not the net amount that you received from the facilitator after deducting any fees or commissions. For example, if a passenger pays $55 and the facilitator pays you $44 (after deducting an $11 commission), the GST payable is $5 (not $4). Creditable acquisitions You may claim GST credits for your business purchases, but must be apportioned between your business and private use. For example, if you use your car 10% for ride sourcing and 90% for private purposes and you pay $110 for petrol (including $10 GST); you may claim a GST credit of $1. Ceasing to carry on your enterprise If you cease providing ride-sourcing services, you are no longer required to be registered for GST. You may cancel your GST registration until you decide to go back to providing the services again; in such case, you will have to re-register for GST.