Issue
Does the entity, a car dealer, include costs for: • dealer delivery; • statutory warranties; and • standard manufacturer's warranty
that are incorporated into the price of the car, in the 'luxury car tax value' as defined in section 5-20 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act)?
Decision
Yes, the entity does include the above costs that are incorporated into the price of the car, in the 'luxury car tax value' as defined in section 5-20 of the LCT Act.
Facts
The entity is a car dealer. The entity sells a luxury car. The sale is a taxable supply of a luxury car under section 5-10 of the LCT Act.
The amount charged by the dealer for the luxury car includes: • dealer delivery; • statutory warranties; and • standard manufacturer's warranty.
They are not separate supplies to the supply of the car.
The entity is registered for goods and services tax (GST).
Reasons for Decision
Section 5-20 of the LCT Act defines the 'luxury car tax value' of a car. Subsection 5-20(1) of the LCT Act provides that the luxury car tax value is the price of the car excluding: • any luxury car tax for that supply; and • any other Australian tax, fee or charge, other than GST and customs duty payable on the supply of the car.
'Price' is defined in section 27-1 of the LCT Act as having the same meaning given in section 9-75 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act). Section 9-75 of the GST Act defines price as the amount of consideration received for the supply including the GST payable on the supply.
The entity is making a taxable supply of a luxury car to a customer. The amount charged by the entity includes the costs of: • dealer delivery; • statutory warranties; and • standard manufacturer's warranty.
These items form part of the supply of the car. They are not separate supplies to the supply of the car. Therefore, the cost of these items is part of the consideration (the price) for the supply of the car.
As the costs are part of the price of the luxury car, they are included in the 'luxury car tax value' as defined in section 5-20 of the LCT Act.