Hummers, as well as other vehicles not fitting within the
traditional description of 'luxury car', will now be
subject to Luxury Car Tax ("LCT") on top of GST and other
customs and excise duties wherever applicable.
The findings in the below case heard before the Administrative
Appeals Tribunal ("AAT") on the various definitions
relevant to the LCT mean that a wider class of cars may now be
caught by the tax if their luxury car tax value exceeds the
threshold. This potentially could mean four wheel drives with
features that could be considered luxurious by a class of persons,
or other large vehicles that may be colloquially called
'limousines' despite having significant design
The findings of the AAT will impact the luxury vehicle industry
by expanding the scope of 'luxury' to include the
subjective, and the scope of 'motor powered road vehicle'
to include vehicles beyond those designed solely for road use. The
fact that a vehicle will need to be modified prior to use on
Australian roads does not negate its ability to be used on roads
for the purposes of the definition.
Case: Dreamtech International Pty Ltd
–v– Commissioner of Taxation  AATA
The appellant, Dreamtech International Pty Ltd
("Dreamtech"), is a car dealer which imports vehicles and
also makes substantial modifications to those imports. A Hummer
limousine was imported from the US and various modifications were
undertaken, including those to comply with Australian Design
Dreamtech were assessed as liable to pay LCT in the amount of
$22,548.59. An appeal was lodged in the AAT by Dreamtech against
the decision of the Commissioner of Taxation that the LCT applied
to its imported Hummer vehicles.
In the decision handed down by the AAT on 19 May 2009, the tax
was held to apply to the Hummer as a 'luxury car'. The AAT
made a number of significant findings on the scope of definitions
relating to the tax.
Definition of a 'limousine'
A limousine falls within the definition of 'car', but is
not itself defined in A New Tax System (Luxury Car Tax) Act
1999 ("LCT Act"). General principles of statutory
interpretation dictate that it must therefore be taken to have its
The AAT rejected arguments put forward by Dreamtech that, as the
Hummer was required to comply with certain bus standards, the
Hummer could not be defined as a limousine, and decided that the
Hummer in question would colloquially be described as a limousine,
and so it follows that it must fall within the definition a
'car' in the LCT Act.
Definition of 'car'
The definition of 'car' within the LCT Act is a
'motor vehicle' designed to carry a load of less than 2
tonnes and less than 9 passengers, or a limousine. A 'motor
vehicle' is defined as a 'motor powered road
Definition of a 'motor powered road vehicle'
The argument put forward by Counsel for Dreamtech was that the
Hummer is a vehicle designed for offroad use, does not meet
Australian Design Standards without modifications and is not
practical for use on many Australian roads due to its size.
Therefore, although it is a motor powered vehicle, it does not fit
the description of a 'road vehicle'.
The AAT decided that the term did not distinguish between
vehicles that are classified as 'off-road' vehicles but
also designed for on road use, and vehicles designed solely for on
road use. If the vehicle can conceivably be use on road, it falls
within the description of 'road vehicle'.
Definition of 'luxury'
Importantly, the AAT disagreed with the contention of Counsel
for Dreamtech that the Hummer would not be classed as
'luxurious' to enable it to be captured by the LCT.
The AAT effectively decided that the term 'luxury' is
subjective, and may have different meanings to different people
depending on their age. Thus, it was able to class the Hummer as a
luxury vehicle despite its lack of features generally associated
with 'luxury', for example leather seats, quality
suspension and soundproofing. These features are not necessary for
a vehicle to be subjectively luxurious for a person under the age
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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