House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Treasurer, the Hon. J.S. Dawkins, M.P.)

General Outline and Financial Impact

The amendments to be made by these Bills fall into 3 categories:

1.

The re-imposition of sales tax at the rate of 20 per cent on swimming pool, spa pool and hot tub shells constructed in situ .

These provisions are contained in the Sales Tax Imposition (In Situ Pools) Bill 1992 and in Division 2 of Part 3, and Part 5 of the Sales Tax Laws Amendment Bill (No. 2) 1992;

2.

The extension of the period during which an exemption from tax will be available for certain UHF television transmitters.

These amendments are contained in Part 2 of the Sales Tax Laws Amendment Bill (No. 2) 1992;

3.

The making of miscellaneous amendments to ensure that the new sales tax law operates as intended.

These amendments are contained in Division 3 of Part 3 and Part 4 of the Sales Tax Laws Amendment Bill (No. 2) 1992.

1. Swimming pools

Change: To re-impose sales tax on swimming pool, spa pool and hot tub shells constructed in situ to bring their treatment for sales tax purposes into line with other swimming pools, spa pools and hot tubs that are already subject to tax.

Financial Impact: A gain to the revenue of $2.5m in 1992-93 and $5m in a full year.

2. UHF television transmitters

Change: To extend the current exemption for UHF television transmitters until 1 January 1994.

Financial Impact: Nil.

3. Miscellaneous Changes:

(a) Sales Tax Assessment Act 1992

Use of goods as raw materials

Change: To clarify the circumstances in which goods will be taken to have been used as raw materials in manufacturing other goods, or in constructing or repairing property.

Financial Impact: Nil

Containers for export

Change: To extend the exemption for containers for export so that it applies regardless of the nature of the contents of the container.

Financial Impact: A cost to the revenue of $1m in 1992-93 and $2m in a full year.

Taxable dealing with goods that are the contents of a container

Change: To ensure that the value of a container will not be excluded from the taxable value of an assessable dealing with its contents where tax has been paid separately on the container but subsequently refunded under a credit claim.

Financial Impact: Nil.

Registration entitlement

Change: To exclude persons who are one-off manufacturers from entitlement to registration.

Financial Impact: Nil.

Standard grounds for quoting a registration number

Change: To allow registered persons to quote when acquiring goods for sale to eligible Australian travellers in accordance with the prescribed rules for export sales.

Financial Impact: Nil.

Clawback of CR9 credit on later sale of faulty goods

Change: To correct a minor drafting error.

Financial Impact: Nil.

Credits for registered persons who did not quote when entitled to quote

Change: To ensure that a credit will not be allowable under Credit ground CR2 to a registered person who was entitled to quote in respect of an assessable dealing but did not quote, if the registered person has subsequently sold the goods or applied them to own use.

Financial Impact: Nil.

Credits for repairs under warranty

Change: To ensure that credits for replacement goods used in repairs under warranty are available to third party repairers and to limit credits available in respect of warranty repairs to cases where the value of the warranty has been included in the taxable value of the original goods.

Financial Impact: Nil.

Credit entitlement where there is a bad debt

Change: To extend the circumstances in which a credit will be available for tax paid on goods which are the subject of a bad debt.

Financial Impact: Nil

Computer programs on microchips

Change: To ensure that tax is not payable on the value of a computer program embodied on mediums other than non-erasable microchips.

Financial Impact: Nil.

Prescribed rules for export sales

Change: To include a reference in the definition of prescribed rules for export sales to the conditions that must be complied with in order for a credit to be available in respect of goods sold to eligible Australian or foreign travellers.

Financial Impact: Nil.

(b) Sales Tax (Exemptions and Classifications) Act 1992

Business Input Exemptions for the Oil Industry

Change: To ensure that all business inputs exemptions are available to qualifying oil companies.

Financial Impact: A negligible cost to the revenue.

Building materials

Change: To ensure that the new exemption Item for building materials does not inadvertently exclude some materials covered by the existing law.

Financial Impact: Nil.

Crude oil and Diesel oil

Change: To restore the unconditional exemption for crude oil that is available under the existing law and to make diesel oil an always exempt good.

Financial Impact: A negligible cost to the revenue.

Parts for spectacles and wheelchairs

Change: To provide an exemption from tax for parts for spectacles and parts for wheelchairs.

Financial impact: Nil.