Skip to main content
shopping_cart

Your shopping cart is empty

03 Jul 12 Certain incentive payments to motor vehicle dealers not subject to GST - A P Group

The AAT has held that certain “incentive” payments that are commonly made by motor vehicle manufacturers and distributors to motor vehicle dealers (the taxpayers) are not subject to GST. In contrast, certain other payments considered by the AAT were consideration for a supply of a motor vehicle by the dealers to the retail purchaser and therefore subject to GST.

The AAT addressed the following arrangements:

(a) “fleet rebates” received from Toyota Motor Corporation Australia Limited (Toyota) for sales to specific classes of customers, including government and business enterprises;
(b) “run-out model support payments”, also received from Toyota in relation to non-current models;
(c) “transit/interest protection payments” received from GM Holden Ltd (Holden) in respect of finance charges;
(d) target incentive payments received from Ford Motor Company of Australia Limited (Ford), for the achievement of specified sales targets (“retail target incentive payments”); and
(e) target incentive payments received from Subaru (Aust) Pty Limited (Subaru), for the achievement of specified purchase targets (“wholesale target incentive payments”).

The AAT held that only the first two payments were subject to GST, as they were consideration for supply to a customer. The Commissioner did not argue that the third and fifth payments were consideration for supply to a customer. The AAT held that the fourth payment was in respect of supplies generally, and therefore not consideration for a supply. None of the payments were consideration for a supply to the manufacturer of the motor vehicles.

Prior to the decision, the Commissioner had decided that he need not refund any overpaid GST by virtue of the provisions of s 105-65 of the GST Act. The AAT is currently seeking the parties' views on its jurisdiction to review the Commissioner's decision in this regard.

A.P. Group Limited and FCT [2012] AATA 409 (AAT; Frost DP and Professor Deutsch DP; 2 July 2012).

 


Media Release Search
Keywords
Eg. TD 2005/D52 ALL words EXACT phrase WITHOUT words Date range
From To