Today the Commissioner published GSTR 2014/D1 ‘Goods and services tax: motor vehicle incentive payments’ which 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 stated purpose of the draft ruling is to provide practical guidance to the motor vehicle industry following the decision of the Full Federal Court in AP Group Limited v Federal Commissioner of Taxation (2013) 214 FCR 301; [2013] FCAFC 105. The Commissioner acknowledges that as a result of the decision, the previous ATO view concerning the GST consequences of motor vehicle incentive payments can no longer be maintained.

The Commissioner also recognises (at paragraph 18) that determining the GST consequences of motor vehicle incentive payments is more complex following AP Group than it was under the previous ATO view, and that the Commissioner is committed to assisting the industry to implement the AP Group decision in the most practical way possible.

The draft ruling is extensive, running to some 259 paragraphs. I hope to provide my analysis of the draft ruling soon.