GST: Guide for Motor Vehicle Traders (PDF, 619KB)
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Charging output tax on sale
All GST-registered businesses must charge GST when selling motor vehicles, regardless of whether input tax on the purchase or running expenses of the vehicle was claimable or disallowed.
The amount of GST you charge depends on whether you are selling new or second-hand vehicles, and whether you are a motor vehicle dealer.
How to charge GST
If you are not a motor vehicle dealer
Second-hand vehicle
You should use the Discounted Sale Price Scheme when you sell a second-hand vehicle that was used in your business, regardless of the frequency of the sale.
Under this scheme, GST is computed on 50% of the selling price of the used vehicle. The full selling price should still be reported as the value of standard‑rated supply in your GST return.
You are required to charge GST on the sale of your used vehicle even though you did not claim GST on the purchase of the vehicle.
Selling price (excluding GST): $25,000
GST payable: $25,000 × 9% × 50% = $1,125
GST return reporting
- Box 1 (Value of standard‑rated supplies): $25,000
- Box 6 (Output tax due): $1,125
Selling price (excluding GST): $52,250
GST payable: $52,250 × 9/209 = $2,250
GST return reporting
- Box 1 (Value of standard‑rated supplies): $50,000
- Box 6 (Output tax due): $2,250
If you are a motor vehicle dealer
New vehicle
Charge GST on the selling price of the motor vehicle excluding regulatory charges such as Certificate of Entitlement (COE).
Second-hand vehicle
If you are a motor vehicle dealer, you may apply the Gross Margin Scheme when selling a second‑hand vehicle if all conditions of the scheme are met.
If you do not meet the conditions of the Gross Margin Scheme, you should apply the Discounted Sale Price Scheme.
Visit our Motor Trade page for detailed guidance on which scheme applies and how to calculate GST.