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Re: When a Dual Cab is an exempt vehicle

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Hi,

Could you please advise me, if the car limit for GST purposes apply to an exempt dual cab (i.e. private use is home-work and infrequent and minor)?

 

Kind regards,

 

Shamina

 

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Hi @Shamina-Naj,

 

Thanks for getting in touch!

 

We can provide general information and we may need to know more information about your situation.

 

If you've purchased a vehicle which you use for business and private use, you need to apportion the business expenses. Any private use cannot be claimed.

 

For GST purposes, if you purchase a car solely for carrying on your business and you're registered for GST, the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount. You can find information about GST and motor vehicles on our website.

 

Lets us know if you have further queries.

 

Thanks, JodieH.

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Hi @Shamina-Naj,

 

Thanks for getting in touch!

 

We can provide general information and we may need to know more information about your situation.

 

If you've purchased a vehicle which you use for business and private use, you need to apportion the business expenses. Any private use cannot be claimed.

 

For GST purposes, if you purchase a car solely for carrying on your business and you're registered for GST, the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount. You can find information about GST and motor vehicles on our website.

 

Lets us know if you have further queries.

 

Thanks, JodieH.

Newbie

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Hi Jodi,

I will rephrase my question again. 

 

My question is specfically about a dual cab with a total carrying capaicity >1tonne. According to the defitinition under s.995-1 of the ITAA 1997, car is defined as a "motor vehichle designed to carry a load of less than 1 tonne and fewer than 9 passengers.

 

So, in my example I am referring to a dual cab with a total carrying capaicity >1tonne and the only private use is home to work travel and provided it is complying with the ATO Practical compliance guideline 2018/3. Given this scenario, does the car limit for GST purposes ($57,581) apply or is it subsituted by GST inclusive price of a Luxury car tax thresohld?

 

Thank you again.

 

Kind regards,

 

Shamina

ATO Certified

TaxTime Support

Replies 0

Hi @Shamina-Naj,

 

Thanks for the clarification!

 

There seems to be some confusion, as you have mentioned an exempt vehicle and a car limit for GST purposes, but there are no exempt vehicles for GST purposes.


Vehicle exemptions, particularly for dual cab utes such as you have described, relate to Fringe Benefits Tax. If you are not receiving or paying Fringe Benefits, then the vehicle exemptions are not applicable to you.


As @JodieH has mentioned, if you are registered for GST and use a motor vehicle in carrying on your business, you may be eligible to claim a GST credit for the GST included in the price of the vehicle.

 

You have mentioned that the private use is travelling between home and work, but the vehicle needs to be used for business purposes as well in order to be able to claim a GST credit for the purchase price.


The car limit for GST purposes is $57,581, regardless of what type of vehicle you have purchased. The luxury car tax threshold is not at all related to the car limit for GST purposes.


If the vehicle that you have purchased has a GST inclusive value that is above the car limit for GST purposes, you can only claim the maximum credit of $5,234.

 

This means that even if you have purchased a vehicle for $80,000, you are still only entitled to claim a GST credit of $5,234.

 

You cannot claim a credit for any luxury car tax that you have paid on the purchase of the vehicle, regardless of how much you use the car in carrying on your business.

 

Hope this helps,

 

Rachael B.

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