Luxury Car Tax Determination LCTD 2014/1
Date of effect: 12 March 2014

What this ruling is about: This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes. If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you. Ruling 1. No. The luxury car tax value for a car acquired under a hire purchase agreement under subsection 5-20(1) of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) is the price of the car subject to certain exclusions. The luxury car tax value does not include the consideration provided for the supply of credit under the hire purchase agreement. Example 2. Andrea is registered for GST. On 30 September 2012, Andrea enters into a hire purchase agreement with Hocum Car Finance, a finance company, to purchase a car. The GST inclusive price of the car is $55,000 (excluding any Australian tax, fee or charge) and the scheduled credit charges over the term of the hire purchase agreement total $6,600 (including GST of $600). 3. The hire purchase agreement involves the supply of the luxury car and the supply of credit. The luxury car tax value of the car is $55,000. The consideration Andrea provides for the supply of credit is not included in the luxury car tax value. Date of effect 4. This Determination applies both before and after its date of issue. However, this Determination will not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of this Determination (see paragraphs 75 and 76 of Taxation Ruling TR 2006/10). Commissioner of Taxation 12 March 2014




Appendix: 5. Subsection 5-20(1) of the LCT Act provides that in relation to the supply of a car, the luxury car tax value is the price of the car excluding: 6. In applying subsection 5-20(1) of the LCT Act, it is necessary to determine the price of the car. Section 27-1 of the LCT Act provides that the term 'price', in relation to a supply, has the meaning given by section 9-75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Pursuant to subsection 9-75(1) of the GST Act, the price of the car includes the amount of any monetary consideration (including GST) and the GST inclusive market value of any non-monetary consideration provided for the supply of the car. Section 27-1 of the LCT Act also provides that the term 'consideration' has the meaning given by section 195-1 of the GST Act. 7. The GST law recognises that a hire purchase agreement involves both the supply of goods and the supply of credit. Both the GST Act and the A New Tax System (Goods and Services Tax) Regulations 1999 (GST Regulations) provide textual support for recognising the supply of goods and the supply of credit made under a hire purchase agreement. Section 156-23 of the GST Act makes reference to a supply or acquisition of goods or credit under a hire purchase agreement. [1] The GST Regulations make specific reference to credit under a hire purchase agreement in item 8 in the table in subregulation 40-5.09(3) [2] and item 20 in the table in regulation 40-5.12. [3] 8. This view is consistent with the following statements made in the Explanatory Statement to the A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 1) concerning the application of item 20 in the table in regulation 40-5.12 of the GST Regulations which specifies that a supply of credit under a hire purchase agreement entered into on or after 1 July 2012 is not a financial supply: 9. The consideration provided for the supply of credit therefore does not affect the price of the car in determining the luxury car tax value for the car. 10. The consideration provided for the supply of credit and the consideration provided for the supply of the car will be identified pursuant to the terms of the hire purchase agreement. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). LCTD 2013/D1


Luxury car tax: does the luxury car tax value for a car acquired under a hire purchase agreement include the consideration provided for the supply of credit under the agreement?: Paragraph 32 of TR 2006/10 provides further guidance on the status and binding effect of public rulings where the law has been repealed and rewritten. | A comparison table which provides the replacement provisions in the A New Tax System (Goods and Services Tax) Regulations 2019 for regulations which are referenced in this Ruling is available.


Related rulings: TR 2006/10
Legislative references: ANTS(GST)A 1999 9-75 ANTS(GST)A 1999 9-75(1) ANTS(GST)A 1999 156-23 ANTS(GST)A 1999 195-1 ANTS(GST)R 1999 40-5.09(3) ANTS(GST)R 1999 40-5.12 ANTS(LCT)A 1999 5-20(1) ANTS(LCT)A 1999 27-1
Subject references: GST hire purchase luxury car tax
Other references: Explanatory Statement to A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 1)