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 an imported luxury car that was entered for home consumption 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 an imported luxury car that was entered for home consumption 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 an imported luxury car that was entered for home consumption 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)(b) of the LCT Act, a car that has been imported is considered to be more than 2 years old at the time of supply if it was entered for home consumption more than 2 years before the time of the supply.
The entity is selling an imported luxury car that was entered for home consumption 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)(b) 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 an imported luxury car that was entered for home consumption more than 2 years before the current supply .