Ride-sharing service Uber has lost a legal battle over GST with the Taxation Office. A Federal Court ruling this morning means Uber drivers will have to charge GST at 10 per cent on all fares.
The case is a major blow for the loss-making US tech giant, which had been trying to keep its drivers out of reach of the GST system.
In a test case before the court, Uber argued its drivers did not provide “taxi travel”, as defined in the GST law, because they did not hold taxi licenses in any state or territory.
However, Justice John Griffiths found the words in the legislation “should be given their ordinary, everyday meanings and not a trade or specialised meaning”.
“I accept the Commissioner’s submission that the ordinary meaning of the word ‘taxi’ is a vehicle available for hire by the public and which transports a passenger at his or her direction for the payment of a fare that will often, but not always, be calculated by reference to a taximeter,” he said.
Under the GST law, most traders only have to charge the 10 per cent impost once their turnover reaches $75,000 a year.
However, there is a special rule for taxi operators, who must charge the tax from the first dollar, regardless of turnover.
The rule was introduced because of concerns that taxis not registered for GST would either charge a lower fare or would charge the same fare as other cabs and pocket the difference.
Uber has the right to appeal.