Issue
Is the entity, the operator of a car wash business, making an input taxed supply under subsection 24C(1) of the A New Tax System (Goods and Services Transition) Act 1999 (Transition Act), when it supplies the coin-operated car wash facilities?
Decision
No, the entity is not making an input taxed supply under subsection 24C(1) of the Transition Act when it supplies coin-operated car wash facilities. The entity is making a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
Facts
The entity is the operator of a car wash business. The entity provides car wash facilities by way of coin-operated devices. The coin-operated car wash facilities accept more than one denomination of coin.
The entity is registered for goods and services tax (GST). The supply meets the other positive limbs of section 9-5 of the GST Act.
Reasons for Decision
Under subsection 24C(1) of the Transition Act, a supply of tangible personal property or a service from a mechanical coin-operated device is input taxed if: (a) the maximum consideration for the supply is $1 and is paid by depositing up to 2 coins in the device; and (b) the device accepts only one denomination of coin and does not give change; and (c) the device was operating on 1 July 2000; and (d) the supply is made before 1 July 2005; and (e) the supply is not a gambling supply; and (f) you choose to have all of your supplies made from the device on or after 1 July 2000 treated as input taxed.
In this case, the coin-operated car wash facilities accept more than one denomination of coin. As such, the requirements under paragraph 24C(1)(b) of the Transition Act are not satisfied. Therefore, the entity is not making an input taxed supply under the subsection 24C(1) of the Transition Act.
The entity is registered for GST and the supply satisfies the other positive limbs of section 9-5 of the GST Act. Furthermore, the supply is neither GST-free under Division 38 of the GST Act nor input taxed under Division 40 of the GST Act. Therefore, the entity is making a taxable supply under section 9-5 of the GST Act.