The Federal Court of Australia has confirmed that Hummers and
potentially some other vehicles not fitting within the traditional
description of 'luxury car', will now be subject to luxury
car tax on top of GST and other customs and excise duties wherever
Our E-Alert dated 25 May 2009 reported the findings of the
Administrative Appeals Tribunal ("AAT") decision of
Dreamtech International Pty Ltd -v- Commissioner of
Taxation  AATA 365. In that decision Dreamtech having
been assessed by the Commissioner of Taxation as liable to pay
luxury car tax in the amount of $22,548.59 for a Hummer limousine
imported from the US, appealed against the Commissioner's
decision to the AAT. The AAT held that the tax applied to the
Hummer as a 'luxury car'. The AAT made a number of
significant findings on the scope of definitions relating to the
Federal Court appeal
Dreamtech appealed the AAT's decision to the Federal Court.
The Federal Court dismissed Dreamtech's appeal and upheld the
finding by the AAT that luxury car tax was payable on a Hummer
imported from the US.
The impact of the decisions
The effect of these decisions is 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 include 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 decisions 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
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guide to the subject matter. Specialist advice should be sought
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