This Draft GST Ruling, issued on Wed 23.4.2014, explains the Commissioner’s view on the GST consequences of incentive payments made by motor vehicle manufacturers, importers and distributors to motor vehicle dealers. The Draft seeks to provide practical guidance to the motor vehicle industry following the decision of the Full Federal Court in AP Group Ltd v FCT [2013] FCAFC 105.
The Draft makes some general observations relevant to the GST consequences of motor vehicle incentive payments and provides specific guidance on common types of incentive payments through worked examples. It will only apply to the class of entities that make or receive incentive payments in the motor vehicle industry. Therefore, the Draft is confined to the facts and circumstances of the motor vehicle industry and does not consider incentive payments made in other industries.
DATE OF EFFECT: When the final Ruling is issued, it is proposed to apply to tax periods starting on or after 1 May 2014.
COMMENTS are due by 6 June 2014. ATO contact: Jenny Lin – Tel: (02) 6216 1808; Fax: (03) 9285 1943; Email: Jenny.Lin@ato.gov.au.
[LTN 76, 23/4/14]
Extract from [2013] FCAFC 105
3. …The Administrative Appeals Tribunal (the Tribunal), on an application for review of the Commissioner’s decisions, decided that
- Toyota “fleet rebates” and Toyota “run-out model support” payments were consideration for the supply of cars to the AP Group’s customers but not consideration for the supply of services by the AP Group to Toyota;
- decided that the Ford “retail target incentive” payments were not consideration for the supply of anything to either the AP Group’s customers or Ford; and
- decided that the Subaru “wholesale target incentive” payments were not consideration for the supply of anything to Subaru, it not having been argued that they were consideration for the supply of anything to the AP Group’s customers.
[The Full Federal Court did not disturb the Tribunals decision.]