Capital Finance Australia Limited has agreed with the Australian Competition and Consumer Commission to refund 118 consumers in excess of $70,000 incorrectly collected as Goods and Services Tax on motor vehicle leases, Acting ACCC Chairman, Mr Sitesh Bhojani, said today.
The action follows an investigation by the ACCC that was prompted by complaints from consumers. It was alleged that Capital Finance should not have levied GST under particular contracts.
"Capital Finance is a subsidiary of the Halifax Bank of Scotland group, and a major provider of finance for car lease agreements", Mr Bhojani said. "In response to the ACCC concerns Capital Finance sought a private ruling from the Australian Taxation Office. This ruling confirmed that the particular lease contract did not allow for GST to be imposed on consumer leases executed prior to 2 December 1998.
"As a result Capital Finance has refunded or re-credited 118 consumers the GST collected on lease payments. The value of the refunds and reversals is in excess of $70,000".
The ACCC agreed to an informal administrative settlement to this matter because the company cooperated with the ACCC investigation and responded quickly once it obtained the ATO's ruling. The ACCC welcomes Capital Finance's willingness to resolve this matter to the benefit of its customers.
"The ACCC is still investigating other providers of finance for car lease agreements which may have incorrectly levied GST on lease agreements entered into prior to 1 July 2000".