Commissioner publishes draft ruling on “passing on” and final ruling on motor vehicle incentives

Over the last few days the Commissioner published two GST Rulings.

The first is draft GSTR 2014/D4 ‘Goods and services tax: the meaning of the terms ‘passed on’ and ‘reimburse’ for the purposes of Division 142 of the A New Tax System (Goods and Services Tax) Act 1999′. The draft ruling seeks to explain the Commissioner’s view on the meaning of the terms “passed on” and “reimburse” for the purposes of Division 142 of the GST Act, being terms which are fundamental to the operation of that Division and the entitlement of taxpayers to refunds of overpaid GST. My discussion of the ruling can be found here. My thoughts generally on the issue of “passing on” can be found in the following article published on this site in June of this year.

The second is GSTR 2014/1 ‘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 and 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] 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.

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