Lemongrass Pty Ltd is a small company incorporated in Victoria, Australia. The company was incorporated in 2005 to manufacture and sell candles. Its sales revenue regularly exceeds $100,000 each year. The company sells its candles to a local retailer for $5.50 per dozen. It also sells its candles to a retailer in Vanuatu as the candles have been very popular there for $6.60 per dozen. On 1 January of the current year, Lemongrass Pty Ltd purchased a car for $22,000, which it provided to its managing director as she has to do a lot of travelling for work. The car was purchased from Big Cars Pty Ltd, a large national car retailer with sales revenue in excess of a million dollars per year.

Advise Lemongrass Pty Ltd of its GST consequences arising from the above information. Show your calculation process where appropriate and provide relevant case law, ATO rulings and section references to support your answer.

Answer rating: 100% (QA)

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