Explanatory Memorandum
(Circulated by the authority of the Treasurer the Hon Ralph Willis, M.P.)CHAPTER 19 - SALES TAX - TAKE-AWAY FOOD CONTAINERS
Overview
19.1 The Bill will amend Item 27 of the Sales Tax (Exemptions and Classifications) Act 1992 to ensure that containers used to deliver take-away food and beverages, and certain ice-cream and biscuit goods are excluded from the exemption.
Summary of the amendments
19.2 To clarify the current wording of Item 27 of the Sales Tax (Exemptions and Classifications) Act 1992 to ensure that the exclusions in sub-item 27(3) encompass containers used to deliver the specified goods.
19.3 The amendment will apply from the date of introduction of the Bill (30June1994). [Subclauses 2(5) and 158(2)]
Background to the legislation
19.4 The basic scheme of the sales tax legislation is to treat containers for goods in the same way as their contents. The exception to this concept are containers for take-away beverages or foodstuffs and containers for certain ice-cream goods and biscuit goods.
19.5 In general, the legislation taxes the inputs to retail or catering establishments such as hotels, restaurants, kitchens, take-away food shops and the like. Thus containers used in connection with these establishments are taxed separately.
19.6 Containers are defined in terms of being packaging for the purposes of "marketing or delivery" of the contents. However, the exclusion to exemption Item 27 for containers for take-away food and the like is expressed only in terms of the "marketing" of the contents.
19.7 There is a large degree of overlap in the scope of the terms "marketing" and "delivery". In the context of the exemption item for containers, it is considered that the term "marketing" covers the scope of both terms.
Explanation of the amendments
19.8 Item 27 of the Sales Tax (Exemptions and Classifications) Act 1992 is amended by adding the term "delivery" to the exclusion sub-item 27(3). The amendment is merely to clarify the meaning of the exclusion and provide certainty to taxpayers. [Paragraph (a) of clause 157]