Indirect Tax Legislation Amendment Bill 2000

Further Supplementary Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Campervans and motor homes

Amendment to the LCT Act

1. Item 16F of Schedule 11 to this Bill is removed and substituted with new item 16F . This amends the meaning of luxury car in section 25-1 of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act) to ensure that campervans and motor homes are not subject to luxury car tax (LCT) [new paragraph 25-1(2)(d)] . The amendment also clarifies that commercial vehicles that are not designed to carry a load of less than 2 tonnes. As the designed load capacity is calculated after a body has been fitted to a vehicle, a number of trucks could have been subject to LCT. The amendment ensures that these commercial vehicles will not be subject to LCT [Schedule 11, item 16F] .

2. The financial impact of the measure relating to campervans and motor homes is less than $5 million for the 2000-2001 financial year. The measure relation to non-passenger vehicles has no financial impact as these vehicles were never intended to be covered by the LCT.

Amendment to the GST Act

3. Section 69-10 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) restricts the amount of imput tax credits that can be claimed in relation to certain cars. Item 10A inserts new subsection 60-10(1A) to ensure that this restriction does not apply to the types of vehicles that are specifically excluded from the LCT in new item 16f (i.e. campervans and motor homes and commercial vehicles that are not designed for the principal purpose of carrying passengers). [Schedule 11, item 10A]

4. The financial impact of this measure is minimal as not all vehicles to be excluded from the LCT by new item 16F would have been caught by section 69-10. Additionally, the full financial impact of this measure will not occur until the year commencing 1 July 2002 after the phasing in period for claiming input tax credits for motor vehicles has expired.