Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Ralph Willis, MP)
CHAPTER 12 - Sales tax - exemption for UHF transmitters
12.1 Schedule 9 of the Bill will provide that certain UHF television transmitters will be exempt from sales tax, if they are for use in transmitting commercial television programs and acquired under the equalisation program. The exemption, and a related credit ground, will apply to transmitters installed, or to be installed, on or after 1 January 1994 and before 1 January 1996.
12.2 To extend the operation of an earlier sales tax exemption for UHF television transmitters, to cover certain UHF transmitters used in the equalisation program which are installed, or to be installed, in the period 1 January 1994 to 31 December 1995.
12.3 The amendments will take effect from the date the Bill receives Royal Assent. Credits will apply to dealings on or after 1 September 1993 and before the date of Royal Assent. [Clause 2 and item 6]
12.4 Certain UHF television transmitters used in commercial television broadcasting were previously exempt from sales tax under Item 105 of the First Schedule to the Sales Tax (Exemptions and Classifications) Act 1935 . The exemption applied to transmitters which were to be used to further specified commercial broadcasting policies, and which were used or installed ready for use after 30 April 1987 and before 1 January 1994. When the exemption was first introduced, the cut-off date was I January 1993. It has already been extended once, to 31 December 1993. Item 105 was incorporated into the current sales tax law by section 11 of the Sales Tax Amendment (Transitional) Act 1992 .
12.5 One of the broadcasting policies covered by the earlier exemption was the equalisation program, which is designed to provide television services in regional areas comparable to those in capital cities. The reason why the exemption contained a sunset clause was because it was intended, among other things, to be an incentive for licensees to speed up implementation of the equalisation program.
12.6 However, the equalisation program is not yet completed in Tasmania, where licensees had experienced delays in installing their transmitters, which were partly caused by bad weather. Although the original aim of the exemption was to encourage faster implementation, it was decided that it was inequitable to deny licensees in Tasmania the benefit of the incentive which had been available to eastern mainland licensees.
12.7 Schedule 1 to the Sales Tax (Exemptions and Classifications) Act 1992 identifies goods which are exempt from sales tax. A new exemption Item 168A will be inserted into Schedule 1 to cover "exempt UHF television transmitters". [Items 2, 3, 4 and 5]
12.8 An "exempt UHF television transmitter" will be one which satisfies the following conditions:
- the transmitter will be for use in transmitting a commercial broadcasting service (within the meaning of the Broadcasting Services Act 1992 ), by means of radio emissions on frequencies in the range of 520 to 820 megahertz; [new subsection 3C(4)]
- the Secretary to the Department of Communications and the Arts, or a person authorised by the Secretary, has certified that the transmitter has been installed, or is to be installed:
- on or after 1 January 1994 and before 1 January 1996;
- for the purpose of a commercial television broadcasting service;
- for use in the equalisation program, that is the implementation plan referred to in Part IIIC of the Broadcasting Act 1942 or section 16 of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992 ; [new subsections 3C(1) and (2)] and
- the transmitter is not a replacement for an existing UHF transmitter [new subsection 3C(3)] .
12.9 The exemption only applies to the transmitter itself. It does not cover goods such as transmission towers, masts, antennae and electric lines which are ancillary to, or used in association with, the transmitter itself. [New subsection 3C(4)]
12.10 The terms of this exemption will be very similar to the terms of the earlier exemption, except that it will be restricted to transmitters for use in the equalisation program.
12.11 A person will not be able to claim the exemption unless the person has previously obtained the relevant certificate from the Department of Communications and the Arts. Applications for the certificate should be addressed in the first instance to the Secretary of the Department of Communications and the Arts, GPO Box 2154, Canberra ACT 2601.
12.12 A transitional credit ground, TCR1, will be inserted into "Table 3A: Transitional credit grounds" in the Sales Tax Assessment Act 1992 , to cover certain dealings with UHF transmitters, which have taken place before the new exemption comes into effect. [Items 9 and 11]
12.13 The credit ground will be available for "transitional exempt UHF television transmitter dealings", which will be dealings (usually entry of the transmitter into Australia, or a sale of a transmitter):
- occurring on or after 1 September 1993 and before the date that the new exemption comes into effect. The date of 1 September 1993 is intended to cover licensees who purchased or imported transmitters in late 1993, but were not entitled to exemption under the old UHF exemption because the equipment could not be installed by the previous cut-off date of 1 January 1994 [paragraph (a) of subitem 7(1)] ; and
- where the Secretary to the Department of Communications and the Arts, or a person authorised by the Secretary, has certified that, at the time of the dealing, the transmitter was to be installed:
- on or after 1 January 1994 and before 1 January 1996;
- for the purpose of a commercial television broadcasting service; and
- for use in the equalisation program, that is the implementation plan referred to in Part IIIC of the Broadcasting Act 1942 or section 16 of the Broadcasting Services (Transitional Provisions and Consequential Amendments) Act 1992 ; and [paragraph (b) of subitem 7(1)] ; and
- the transmitter was not a replacement transmitter [subitem 7(3)] .
12.14 The goods covered by the credit ground will be the same UHF television transmitters which would have qualified for the new exemption, if the dealing had taken place after the exemption came into effect. [Subitem 7(4)]
12.15 Applications for credits should be lodged with the Commissioner of Taxation, accompanied by the certificate from the Department of Communications and the Arts, on or after the day that the Bill receives the Royal Assent. A credit will not be allowed if the claimant has recouped the amount of the tax from another person, and not refunded that amount to the other person.