TAXATION RULING NO. ST 2222

ST 2222

SALES TAX : TOOLS USED IN REPAIRING VIDEO CASSETTE RECORDERS

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FOI status:

May be releasedFOI number: I 1075952

PREAMBLE

The sales tax classification of certain tools used in the repair of video cassette recorders (VCR's) has been considered in relation to item 50 in the Second Schedule to the Sales Tax (Exemptions and Classifications) Act and sub-item 5(1) in the Third Schedule.

2. Item 50, Second Schedule taxes at the rate of 30% accessories and parts (other than batteries) for goods referred to in item 45A, Second Schedule. VCR's come within item 45A.

3. Sub-item 5(1), Third Schedule taxes at the rate of 10% hand tools of the kinds used for industrial purposes.

FACTS

4. The following tools were considered :-

a)

back tension measuring cassette - a heavy duty video cassette incorporating a gauge to measure the amount of pressure applied to the tape during operation;

b)

alignment tape - a heavy duty video cassette with special test images and tones for use in identifying head alignment problems;

c)

X - position adjusting jig, master plane and reel disc height adjusting jig, retaining guide height jig - jigs placed in the VCR during servicing to facilitate the correct positioning of parts and removed after servicing;

d)

torque gauge - a unit similar in appearance to the chuck on an electric drill attached to the driving spindle of the VCR with the torque measurement displayed at the top of the unit. It is positioned and held by hand;

e)

hexagonal wrench - a wrench of the design known as an allen key, used to loosen and tighten recessed hexagonal head bolts; and

f)

tension gauge - a hand held gague used to measure tape tension.

RULING

5. The abovementioned tools are not regarded as accessories for VCR's and accordingly they do not come within item 50, Second Schedule.

6. The torque gauge, hexagonal wrench and tension gauge are hand tools of the kinds used for industrial purposes and are taxable at the rate of 10% under sub-item 5(1), Third Schedule.

7. The back tension measuring cassette, the alignment tape and the various jigs listed in sub-paragraph 4(c) above are not hand tools and do not come within sub-item 5(1), Third Schedule. They are taxable at the general rate of 20%.

COMMISSIONER OF TAXATION
18 March 1986

References

ATO references:
NO 85/6297-1
BO Hobart - S/CW/ST 17/113

Date of effect:
Immediate

Related Rulings/Determinations:

ST 2302

Subject References:
TOOLS
HAND TOOLS
VIDEO REPAIR TOOLS
VIDEO CASSETTES

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEM 50, SECOND SCHEDULE;
ITEM 5, THIRD SCHEDULE