Hi guys,
I have a question regarding LCT. If a motor vehicle dealership import a car today and quote their ABN, I understand they are eligible for a deferral on the LCT (instead of paying during importation, they can pay this at the time of the sale based on the eventual sale price of the car - so it could be lower or higher depending on the eventual sale price).
They hold the car for trading stock, however, as it is a high-end car, the demand for the car is limited in Australia given the niche market and its high value. After 2 years from today, the car is still not sold despite active advertising. Eventually, the car is sold in 2029 - 3 years from the date of importation.
On the eventual sale of the car in 2029, is LCT still going to be payable based on the eventual sale price? Or will LCT no longer apply as at the time of the sale, the vehicle is more than two years from the date the vehicle was originally imported into Australia.
Alternatively, what if the car was sold in 2027 (within the two years) but it is sold to an overseas buyer (GST free sales). Is LCT still going to be payable based on the eventual sale price? Or will LCT no longer apply as it is sold as a GST-export?
Note that the ATO website states that LCT don't apply for:
- where the car was imported more than 2 years before the supply
- to a car exported as a GST-free export
Thank you!
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