TAXATION RULING NO. ST 2204

ST 2204

SALES TAX: ABRASIVE PASTES AND POWDERS

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FOI status:

PREAMBLE

Sub-item 5(3) in the Third Schedule to the Sales Tax (Exemptions and Classifications) Act taxes at the rate of 10% "abrasive implements and apparatus of the kinds used for industrial purposes, including revolving grinding stones, grinding wheels and other grinders; abrasive cloths, papers, grains, pastes and powders".

2. Prior to 24 August 1983 all abrasive grains, pastes and powders were taxable at the general rate. Sub-item 5(3) was amended with effect from that date by the addition of the words "grains, pastes and powders".

3. The question which has arisen is whether all abrasive grains, pastes and powders are now covered by sub-item 5(3), Third Schedule, or only those of a kind used for industrial purposes.

RULING

4. The purpose of the 1983 amendment to sub-item 5(3), Third Schedule, was to remove the anomaly which formerly existed whereby abrasive implements and apparatus of the kinds used for industrial purposes were taxable at the Third Schedule rate while abrasive grains, pastes and powders used in similar applications were taxable at the general rate. The legislative history and context of the sub-item show that the intention of the amending legislation is that the only abrasive grains, pastes and powders to qualify for the 10% rate of tax are those used in association with or in place of those goods covered by sub-item 5(3), prior to the 1983 amendment, i.e. abrasive implements and apparatus of the kinds used for industrial purposes.

5. Domestic cleaning pastes and powders and other general industrial cleaning pastes and powders, whether abrasive or not, are taxable at the general rate of 20%.

COMMISSIONER OF TAXATION
6 January 1986

References

ATO references:
NO 85/9139-3

Date of effect:
Immediate

Date original memo issued:
31 December 1985

Related Rulings/Determinations:

ST 2302

Subject References:
ABRASIVE GRAINS, PASTES AND POWDERS.
CLEANING PASTES AND POWDERS

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEM 5, THIRD SCHEDULE