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TAXATION RULING NO. ST 2235

ST 2235

SALES TAX : IMPORTED UNSOLICITED GIFTS

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FOI status:

May be releasedFOI number: I 1078087

PREAMBLE

The scheme of the sales tax is to impose tax on all goods imported into Australia for the first time unless they are specifically exempt.

2. Prior to amendments in 1985 to Sales Tax Assessment Act (No.5) there was no definition of "importer" in the law. Where goods were sent from overseas to persons in Australia without their prior knowledge, e.g. as an unsolicited gift, it was not possible to collect sales tax on the goods. It was accepted on advice received from the Crown Solicitor that the recipient of goods in those circumstances could not be said to have imported the goods.

3. Following amendments to Sales Tax Assessment Act (No.5) in May 1985 there will now always be a person liable to pay tax on imported goods and any previous inability to collect tax on unsolicited gifts has been removed.

RULING

4. Sales tax is now payable on imported unsolicited gifts unless they are covered by one of the exemption items in the First Schedule to the Sales Tax (Exemptions and Classifications) Act. For example, gifts of clothes and footwear for human wear are exempt under item 120, First Schedule, while books are exempt under item 51 in that Schedule.

5. A limited sales tax exemption is also available under paragraph 145(a), First Schedule, for imported goods, including unsolicited gifts, the value of which is insubstantial. This exemption is tied to item 35 in Part I of Schedule 4 to the Customs Tariff. Under a by-law made under item 35 customs charges are waived on imported goods such as unsolicited gifts where the combined customs duty and sales tax otherwise payable does not exceed $20. Where the combined customs duty and sales tax payable on an unsolicited gift is less than $20, therefore, the gift may be entered free of sales tax.

COMMISSIONER OF TAXATION
9 May 1986

References

ATO references:
NO ST20/5 P7

Subject References:
IMPORTED UNSOLICITED GIFTS

Legislative References:
SALES TAX ASSESSMENT ACT, (No.5) SECTION 5;
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEM 145, FIRST SCHEDULE


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