House of Representatives

Tax Laws Amendment (2010 GST Administration Measures No. 3) Bill 2010

Second Reading Speech

Mr Bowen (Minister for Financial Services, Superannuation and Corporate Law and Minister for Human Services)

I move: That this bill be now read a second time.

The bill amends the A New Tax System (Goods and Services Tax) Act 1999 to progress GST reforms announced in the 2008 09 and 2009-10 budgets aimed at simplifying and streamlining the administration of the GST.

The amendments in schedule 1 provide that the transport of goods by subcontractors within Australia that forms part of the international transport of those goods by another entity from or to Australia is taxable, unless the supply of transport is made to a non-resident that is not in Australia.

The amendments reduce compliance costs and address the inconsistent treatment of international transport applying to postal and non-postal goods under the existing GST law. These amendments apply from 1 July 2010.

The amendments in schedule 2 ensure that supplies of global roaming services provided to visitors to Australia remain not subject to GST, consistent with Australia's treaty obligations under the International Telecommunication Regulations also known as the Melbourne agreement.

Until December 2005 these international telecommunication supplies were not considered to be taxable under the Australian GST law. However, the Commissioner of Taxation then determined that these supplies were taxable. Therefore it is necessary to amend the GST law to ensure that the treatment of these supplies remains consistent with the Melbourne agreement.

These amendments apply from 1 July 2000, the commencement date of the GST. This retrospective application benefits suppliers, as the change is consistent with the existing industry practice of not applying GST to the relevant supplies.

The amendments in schedule 3 ensure that the appropriate GST outcome is achieved in situations where there are payments between parties in a supply chain which indirectly alter the price received or paid for the thing that is supplied but where certain parties in the supply chain are members of the same GST group, GST religious group or GST joint venture.

This measure arose from recent changes to the GST law which take effect on 1 July 2010. The effect of these changes is to create adjustments to apply in situations where a taxpayer supplying things for resale makes a monetary payment to a third party in the supply chain in connection with the third party's acquisition of the thing.

The amendments will apply to third party payments made on or after 1 July 2010.

Full details of the measures in this bill are contained in the explanatory memorandum. I commend the bill to the House.

Debate (on motion by Mrs Gash) adjourned.