Issue
Is the entity, a motor vehicle dealer, making a taxable supply of a luxury car under section 5-10 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act), when it sells a luxury car that was manufactured in Australia more than 2 years before the current supply?
Decision
No, the entity is not making a taxable supply of a luxury car under section 5-10 of the LCT Act, when it sells a luxury car that was manufactured in Australia more than 2 years before the current supply.
Facts
The entity is a motor vehicle dealer. The entity is registered for goods and services tax (GST). The entity is selling a luxury car that was manufactured in Australia more than 2 years before the sale.
Reasons for Decision
Under paragraph 5-10(2)(b) of the LCT Act, an entity does not make a taxable supply of a luxury car if the luxury car is more than 2 years old.
Subsection 5-10(3) of the LCT Act explains when a car is considered to be 'more than 2 years old' at the time of a supply.
Under paragraph 5-10(3)(a) of the LCT Act, a car that has not been imported is considered to be more than 2 years old at the time of supply if the car was manufactured more than 2 years before the time of the supply. The time of manufacture is determined by reference to the built date plate that is affixed to the car when manufacture of the car is completed.
The entity is selling a luxury car that is not imported and that was manufactured in Australia more than 2 years prior to the present supply. Therefore, the car is considered to be more than 2 years old under paragraph 5-10(3)(a) of the LCT Act.
Accordingly, the entity is not making a taxable supply of a luxury car under section 5-10 of the LCT Act, when it sells a luxury car that was manufactured in Australia more than 2 years before the current supply.