Taxation Laws Amendment Bill (No. 3) 1994

Further Supplementary Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Ralph Willis, MP)



1.1 This amendment will extend the definition of 'eligible repair goods' in the Sales Tax Assessment Act 1992 (the STAA) so that a repairer can claim a credit for sales tax paid on goods used as new parts in the repair, renovation or reconditioning of Australian-used goods that are then sold to always exempt persons. The credit will become available where the repair takes place on or after Royal Assent of the Bill. Clauses 155A, 155B and 155G].

Explanation of the amendment

1.2. This amendment will insert a new Division 6A into Part 4 of the Bill. New Division 6 A amends the definition of 'eligible repair goods' in section 15 C of the STAA to include goods used exclusively in the repair renovation or reconditioning of Australian used goods owned by the claimant such that:

The goods used become an integral part of the Australian used goods; and
The repaired goods are then sold to a person who gives the claimant a declaration that they are an always exempt person. {Clauses 155B, 155E and 155F]

1.3 The amendments will also remove the definition of an 'always exempt person' from subsection 3(2) of the Sales Tax (Exemption and Classifications) Act 1992(the E & C Act) and insert it into the STAA. The operation of subsection 3(1) of the E & C Act, which provides that defined terms in the STAA have the same meanings if used in the E & C Act, will restore the definition in the E & C Act. [Clauses 155B, 155E and 155F].

1.4 The credit ground relating to eligible repair goods is currently CR22. This credit ground is amended ot ensure that the amount of credit available for persons claiming credit on the basis of a sale to an always exempt person will be the tax borne on the goods to the extent that the claimant has not passed it on to the always exempt person [clause 155D]. This credit ground is similar to that contained in the Bill for export alteration of goods.