Luxury car buyers will now face a tax hike after a bill bringing about the rise finally passed parliament.
The tax, which applies to cars worth more than $57,180, will climb from 25 per cent to 33 per cent. It will be applied retrospectively from July 1, 2008.
But balance of power senators managed to secure amendments in the upper house, exempting some fuel-efficient cars and providing primary producers and tourist operators with tax rebates.
The amendments were agreed to in the House of Representatives on Wednesday, despite coalition opposition to the changes.
Its treasury spokeswoman Julie Bishop said the amended measure was a dog's breakfast that offended every treasury principle of efficiency, equity, simplicity and ease of administration.
Raising the threshold for fuel-efficient cars was fundamentally flawed because it would only cover small European-made cars, she said.
"Here's the party of the working classes exempting European sports cars but slugging Australian-made cars such as the Ford Territory and Holden Commodore with an additional so-called luxury car tax," she said.
"Not one car made in Australia will be exempted."
Rebates for primary producers and tourism operators were confusing and would lead to unfair results, Ms Bishop said.