Issue
Is the entity, an employee, required to be registered for goods and services tax (GST) under section 144-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act), when it drives for the owner of a taxi licence?
Decision
No, the entity, an employee, is not required to be registered for GST under section 144-5 of the GST Act when it drives for the owner of a taxi licence.
Facts
The entity is a bona fide employee. An owner of a taxi licence employs the entity. The entity is paid an hourly rate that is independent of the actual takings.
Reasons for Decision
Division 144 of the GST Act contains a special registration rule for suppliers of taxi travel and provides that they are required to be registered regardless of their annual turnover.
Under section 144-5 of the GST Act, an entity is required to be registered if, in carrying on an enterprise, it supplies taxi travel. It does not matter whether its annual turnover meets the registration turnover threshold or in carrying on an enterprise, it makes other supplies besides supplies of taxi travel.
However, under paragraph 9-20(2)(a) of the GST Act, an enterprise does not include activities done by a person as an employee. Accordingly, the entity, as the employee of the owner of a taxi licence, is not carrying on an enterprise for GST purposes, and therefore, is not required to be registered for GST under section 144-5 of the GST Act. [Note: In this case, the employer, as owner of the taxi licence is carrying on an enterprise of providing the taxi travel and is required to be registered for GST in accordance with Division 144 of the GST Act. Where a driver operates under a bailment arrangement with the owner of the taxi licence, they are not considered to be an employee. In these circumstances, the taxi driver is required to be registered under Division 144 of the GST Act.]