House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan MP

Glossary

The following abbreviations and acronyms are used throughout this explanatory memorandum.

General outline and financial impact

GST and cross-border transport supplies

Schedule 1 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to:

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shift the liability to pay goods and services tax (GST) on the Australian transport leg of the international transport of imported goods from transport service suppliers to the importer of the goods in some situations. This reduces compliance costs for Australian transporters and non-residents;

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make the GST treatment of exports of postal and containerised non-postal goods more consistent and reduce GST compliance costs for transporters; and

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make subcontracted Australian transport services that form part of the Australian leg of an outbound or inbound international transport service GST-free when made to a non-resident not in Australia. This reduces compliance costs for Australian transporters and non-residents.

Date of effect: These amendments apply on and from 1 July 2010.

Proposal announced: This measure was announced in the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs' Media Release No. 048 of 12 May 2009.

Financial impact: This measure will have the following revenue implications:

Compliance cost impact: Low.

GST relief for telecommunications supplies for global roaming in Australia

Schedule 2 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure telecommunication supplies provided under global roaming arrangements provided to visitors to Australia remain not subject to goods and services tax (GST), consistent with Australia's treaty obligations under the International Telecommunication Regulations ( Melbourne Agreement).

Date of effect: This measure applies retrospectively from 1 July 2000, the commencement date of the GST. This measure does not adversely affect taxpayers. Retrospectivity benefits suppliers as the amendment is consistent with the existing industry practice of not applying GST to these supplies.

Proposal announced: This measure was announced in the Treasurer and the then Assistant Treasurer and Minister for Competition Policy and Consumer Affairs' Joint Media Release No. 053 of 13 May 2008.

Financial impact: Nil.

Compliance cost impact: Low.

GST amendments to third party payment adjustment provisions

Schedule 3 to this Bill amends the A New Tax System (Goods and Services Tax) Act 1999 to ensure the third party payment adjustment provisions operate appropriately irrespective of whether relevant parties in the supply chain are members of the same goods and services tax (GST) group, GST religious group or GST joint venture.

Date of effect: 1 July 2010.

Proposal announced: This measure has not been previously announced.

Financial impact: Nil.

Compliance cost impact: Low.