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Ride sharing disruptor Uber has lost its fight against the Australian Taxation Office in the Federal Court. It was decided that Uber's drivers are providing taxi travel within the meaning of the GST legislation.
Under the legislation, most entities that have a turnover of less than $75,000 are not required to be registered for GST. An exception to this rule is that taxi and limousine operators are required to be registered regardless of turnover (s144.5).
Uber argued the following points to support its opinion that its drivers are not providing services that are "travel, that involves transporting passengers, by taxi”:
Uber claimed that the ordinary meaning of taxi travel should be the same as the regulatory concept of taxi. The Commissioner however argued that a regulatory concept of the meaning of taxi would be erroneous as the GST Act is federal law and regulatory concept of taxi would rely on state and territory regulations.
Judge John Griffiths however agreed with the Commissioner that 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.”
Uber drivers will now have to be registered for GST.
Uber of course, may appeal.
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