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10.12.18 GST exemption for supply of a motor vehicle to a disabled former veteran

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Last amended 
21 May 2013

Section 38-505 of the A New Tax System (Goods and Services Tax) Act 1999 (ANTS Act) provides that a Goods and Services Tax (GST) exemption applies to the supply of a motor vehicle (or parts to modify a motor vehicle) to an individual who:

  • has served in the Defence Force or in any other armed force of Her Majesty and has lost or permanently lost the use of a leg or both arms; or
  • is a veteran to whom section 24 of the Veterans' Entitlements Act 1986 (VEA) applies and receives a pension under Part II of that Act, that is, a veteran in receipt of the Special Rate of disability pension.

While the first exemption may apply to claimants under the MVCS, the second exemption could also apply in some circumstances.

These exemptions apply where the person purchases the motor vehicle from the relevant manufacturer or dealership. The fact that the MRCC may have subsidised part of the cost of the purchase of the motor vehicle, with the person making up the difference, is of no consequence to the supply of the motor vehicle, or to the application of the ANTS Act to the person.

The person will only be required to pay GST for the supply of a motor vehicle to the extent that the cost of the motor vehicle exceeds the purchase price limit specified in subsection 38-505(2) of the ANTS Act.

In order to secure this exemption, the delegate will need to provide a completed Form: Declaration for an exemption of GST on a car or car parts - disabled veterans to their car dealer or car parts supplier at the point of sale. The form can be accessed from the Australian Taxation Office (ATO) website.

The GST exemption is not a rebate scheme, which means that the ATO is unable to reimburse the person the cost of the GST on the car and/or car parts once the purchase has been finalised.

While a claimant under the MVCS may not be a ‘veteran’, the GST exclusion will still apply where he or she meets the first criteria outlined above.