House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)

GENERAL OUTLINE

Sales Tax Laws Amendment Bill 1985

This Bill will amend the Sales Tax Assessment Acts (Nos. 1 to 9) 1930 and the Sales Tax Procedure Act 1934 and make consequential amendments of several other Acts:

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to counter sales tax avoidance arrangements under which a wholesaler sells goods by retail under an agency arrangement or from the premises of a retailer;

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to strengthen the sales tax registration procedures by increasing to $25,000 the maximum amount of security that the Commissioner may, where the revenue is at risk, require from a registered person or a person required to be registered;

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to authorise the Commissioner to refuse or revoke a sales tax registration where the application for registration is false or misleading;

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to authorise the Commissioner to prohibit a registered person for a specified period from quoting that person's sales tax certificate where the Commissioner has reason to believe that the quotation procedures have been used by the person to defeat the various Commonwealth sales tax laws;

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to provide -

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where a vendor of goods has reasonable grounds for believing that a purchaser's quotation of a sales tax certificate is not bona fide; and

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the vendor nevertheless sells the goods sales "tax-free",

that the vendor will be liable to pay the tax;

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to allow a Collector of Customs to retain goods until sales tax is paid, in circumstances where the Collector has reasonable grounds to believe that a quotation of a sales tax certificate in respect of the goods is not bona fide;

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to bring the provisions relating to returns and payment of sales tax on imported goods into line with the customs law and procedures by applying the rate of tax applicable at the time the goods are entered for home consumption under the customs law (proposal announced by former Treasurer on 20 August 1981);

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to amend the definition of "manufacture" to remove a possible unintended result with effect in relation to goods the manufacture of which commenced after 20 August 1981 (date of former Treasurer's announcement of this proposal);

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to authorise the Commissioner to cancel a sales tax registration where the registered person is no longer carrying on a manufacturing or wholesale business (proposal announced by former Treasurer on 20 August 1981);

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to provide a cut-off date of 20 August 1981 (date of former Treasurer's announcement of this proposal) to the operation of the transitional provisions applicable to certain anti-tax avoidance amendments made in 1978; and

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to extend the present information gathering power to include a power of access to, and the right to examine and to take samples of, goods (proposal announced by former Treasurer on 20 August 1981).

Sales Tax (No. 5) Amendment Bill 1985

This Bill will:

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formally impose sales tax on imported goods at the rate in force at the time when the goods are entered for home consumption; and

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declare the rates of tax on such goods to be the rates currently specified in the law.

Sales Tax Assessment Bill (No. 10) 1985

This Bill will:

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ensure, where the sales tax law does not bring a royalty in respect of goods into the sales tax base, that sales tax will be payable by the person who actually pays the royalty (proposal announced by former Treasurer on 6 January 1982); and

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provide the machinery for assessment, collection and administration of the tax on royalties imposed by the three related taxing Bills.

Sales Tax Bill (No. 10A) 1985

This Bill will:

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formally impose the sales tax, being a duty of excise, payable under the Sales Tax Assessment Bill (No. 10) 1985 on the amount of royalty paid or payable in respect of goods; and

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declare the rates of tax on such royalty to be the rates of tax applicable to the goods in respect of which the royalty is paid or payable.

Sales Tax Bill (No. 10B) 1985

This Bill will:

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formally impose the sales tax, being a duty of customs, payable under the Sales Tax Assessment Bill (No. 10) 1985 on the amount of royalty paid or payable in respect of goods; and

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declare the rates of tax on such royalty to be the rates of tax applicable to the goods in respect of which the royalty is paid or payable.

Sales Tax Bill (No. 10C) 1985

This Bill will:

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formally impose the sales tax, being neither a duty of excise nor a duty of customs, payable under the Sales Tax Assessment Bill (No. 10) 1985 on the amount of royalty payable in respect of goods; and

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declare the rates of tax on such royalty to be the rates of tax applicable to the goods in respect of which the royalty is paid or payable.