Service Loan Cars Not Exempt From Stamp Duty

VCAT Decision Could Have National Implications

In the Victorian Civil & Administrative Tribunal (VCAT) on 17 August 2015, the Victorian Commissioner of State Revenue argued successfully that complimentary loan vehicles provided by dealerships to their customers while their vehicles were being serviced were not exempt from Victorian motor vehicle duty.

The taxpayer in this case, Mercedes-Benz Australia Pacific Pty Ltd requested a review of the duty imposed on two service demonstrator vehicles (SDVs) which the Commissioner of State Revenue argued that they were being used as demonstrators and, unknowingly to customers, used to upsell them into new vehicles.

VCAT ruled that the sole purpose of these vehicles was that they could only be used as loan cars for service customers and not as demonstrators or used cars available for sale and were therefore subject to Victorian motor vehicle duty.
The Tribunal also noted that the dealership’s customers were unaware of the fact that these vehicles were being used as part of the dealership’s sales tactics.

As the case is subject to appeal the final outcome may not be known for some time.

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