A New Tax System (Indirect Tax and Consequential Amendments) Act (No. 2) 1999 (177 of 1999)

Schedule 1   Indirect Tax Acts

Part 1   Amendment of the A New Tax System (Goods and Services Tax) Act 1999

84   At the end of Division 66

Add:

Subdivision 66-B - Acquisitions of second-hand goods that are divided for re-supply

66-40 Acquisitions of second-hand goods that can be used to offset GST on future re-supplies

(1) This Subdivision applies to an acquisition of *second-hand goods if:

(a) you acquire the goods for the purposes of sale or exchange (but not for manufacture) in the ordinary course of *business; and

(b) either the *consideration for the acquisition was more than $300 or you choose to have this section apply to the acquisition; and

(c) the goods are of such a kind, or they are supplied to you in such a way, that it would be reasonable to expect you to divide them before supplying them in 2 or more separate supplies; and

(d) you do not subsequently make a single supply of the entirety of the goods acquired.

(2) However, this Subdivision does not apply, and is taken never to have applied, to the acquisition if:

(a) the *consideration for the acquisition separately itemises the consideration for the different goods acquired, and your division of the goods before supplying them:

(i) corresponds to that itemisation; or

(ii) does not involve dividing the goods any further than the division indicated by that itemisation; or

(b) the supply of the goods to you was a *taxable supply, or was *GST-free; or

(c) you *imported the goods; or

(d) the supply of the goods to you was a supply by way of hire; or

(e) you make a supply of the goods, or of part of the goods, that is not a taxable supply (other than because of section 66-45).

66-45 Future re-supplies that are not taxable supplies

(1) A supply you make is not a *taxable supply if:

(a) it is a supply of goods that were part of an acquisition you made that was an acquisition of *second-hand goods to which this Subdivision applied; and

(b) your *total Subdivision 66-B credit amount is more than your *total Subdivision 66-B GST amount; and

(c) what would be the amount of GST payable on the supply, if the supply were a taxable supply, is less than or equal to the difference between:

(i) your *total Subdivision 66-B credit amount; and

(ii) your *total Subdivision 66-B GST amount.

Note: This section will not apply unless the record keeping requirements of section 66-55 are met.

(2) This section has effect despite section 9-5 (which is about what are taxable supplies).

66-50 Future re-supplies on which GST is reduced

(1) The amount of GST on a *taxable supply you make is reduced if:

(a) it is a supply of goods that were part of an acquisition you made that was an acquisition of *second-hand goods to which this Subdivision applied; and

(b) your *total Subdivision 66-B credit amount is more than your *total Subdivision 66-B GST amount; and

(c) what would be the amount of GST payable on the supply, if the amount were not reduced under this section, is more than the difference between:

(i) your total Subdivision 66-B credit amount; and

(ii) your total Subdivision 66-B GST amount.

Note: This section will not apply unless the record keeping requirements of section 66-55 are met.

(2) The amount by which the GST on the supply is reduced is an amount equal to the difference between:

(a) your *total Subdivision 66-B credit amount; and

(b) your *total Subdivision 66-B GST amount.

(3) This section has effect despite section 9-70 (which is about the amount of GST on taxable supplies).

66-55 Records of acquisitions of second-hand goods to which this Subdivision applied

Sections 66-45 and 66-50 do not apply to a supply of goods you made unless you hold a record, relating to the acquisition of *second-hand goods of which the goods supplied were a part, that:

(a) sets out the name and address of the entity that supplied the goods to you; and

(b) describes the goods (including their quantity); and

(c) sets out the date of, and the *consideration for, the acquisition.

66-60 Input tax credits for acquiring second-hand goods the supply of which is not fully taxable

(1) If an entity acquires *second-hand goods, and, because of section 66-45 and for no other reason, the supply of the goods to the entity is not a *taxable supply:

(a) the fact that the supply is not a taxable supply does not stop the acquisition being a *creditable acquisition; and

(b) the amount of the input tax credit for the creditable acquisition is worked out as if the supply were a taxable supply.

(2) If:

(a) an entity makes a *creditable acquisition of *second-hand goods; and

(b) the amount of GST on the supply of the goods to the entity was reduced because of section 66-50;

the amount of the input tax credit for the creditable acquisition is worked out as if that amount of GST had not been so reduced.

(3) This section has effect despite section 11-5 (which is about what is a creditable acquisition) and section 11-25 (which is about the amount of input tax credits for creditable acquisitions).

66-65 Total Subdivision 66-B credit amounts and Subdivision 66-B GST amounts

(1) Your total Subdivision 66-B credit amount is the sum of the amounts of the input tax credits to which you would have been entitled, for all your acquisitions of *second-hand goods to which this Subdivision applied, if this Subdivision had not applied to them.

(2) Your total Subdivision 66-B GST amount is the sum of:

(a) all the amounts of GST that, but for the operation of section 66-45, would have been payable on supplies that you made; and

(b) all the amounts by which GST payable on supplies that you made has been reduced under section 66-50.

66-70 Commissioner may determine rules for applying this Subdivision

(1) The Commissioner may, in writing, determine:

(a) that acquisitions of *second-hand goods of a specified kind are, or are not, acquisitions of second-hand goods to which this Subdivision applies; or

(b) how *total Subdivision 66-B credit amounts or *total Subdivision 66-B GST amounts are to be worked out in specified circumstances.

(2) Determinations under subsection (1) override the provisions of this Subdivision (except this section), but only to the extent of any inconsistency.