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GST Exemption on New Motor Cars and Parts

Legislative Authority

A New Tax System (Goods and Services Tax) Act 1999
Section 38-505



  1. This benefit is administered by the Australian Taxation Office.


Stated Current Purpose/Intent

To assist eligible veterans with the cost of purchasing new cars and essential spare parts.


Current Eligibility Criteria

An eligible person is a former member of the Australian Defence Force or the armed forces of any other Commonwealth country who, as a result of service:

  • has lost a leg or both arms or has had a leg or both arms rendered permanently and wholly useless; or
  • is in receipt of a pension under Part II of the VEA and is a veteran (within the meaning of that Part) to whom section 24 of that Act applies.


Eligibility for GST exemption applies where:

  • the motor car or replacement part is for the personal transportation of the applicant and not for resale; and
  • no claim for GST exemption has been made on the purchase of a motor car within the preceding two years  (The Commissioner for Taxation has ruled that the exemption may also apply if the applicant's previously purchased vehicle has been driven more than 40,000 kilometres since purchase).


Date of Introduction

Exemption from Sales Tax was granted (1947).

GST exemptions were introduced when GST replaced Sales Tax on 1 July 2000.


Original Purpose/Intent

In 1947, in response to representations made by limbless ex-servicemen on the basis that it was impracticable for these ex-servicemen to make use of public transport.  Initially, the exemption applied only to ex-servicemen who had lost a leg as a result of their service in the armed forces.

The provision was extended in 1949 to ex-servicemen who had lost both arms, or were deemed under the Repatriation Act 1920 to have lost a leg or both arms, were totally and permanently incapacitated, blind, or had tuberculosis.

Exemption from GST was introduced when GST replaced Sales Tax on 1 July 2000.


Significant Changes in Criteria or Purpose Since Introduction


In the 1991/92 Budget a cap was placed on the amount of exemption available.  This cap has been set at the luxury car threshold.


Exemption from Sales Tax on motor vehicles and parts replaced by an exemption from GST on motor cars and parts.