TAXATION RULING NO. ST 2299

ST 2299

SALES TAX : SERVICING AND CONSTRUCTION EQUIPMENT

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FOI status:

PREAMBLE

One of the measures announced in the 1986/87 Budget was to repeal item 7, Third Schedule with effect 20 August 1986.

2. Prior to 20 August 1986 item 7 in the Third Schedule to the Sales Tax (Exemptions and Classifications) Act read as follows:-

1)

"Machinery, implements, apparatus and materials (other than road vehicles of the kind ordinarily used for the transport of persons or the transport or delivery of goods, towing trucks or salvage vehicles, or parts for those road vehicles) for use exclusively or primarily and principally, for business or industrial purposes, in:-

(a)

servicing, repairing or reconditioning:-

(i)

motor vehicles;

(ii)

aeroplanes (including flying boats, seaplanes and helicopters);

(iii)

ships, boats and other vessels;

(iv)

railway rolling stock; or

(v)

parts of any goods specified in the preceding provisions of this paragraph;

(b)

repairing tyres, including retreading and recapping;

(c)

constructing, maintaining or repairing (or excavating or levelling in connection with constructing, maintaining or repairing) buildings or other structures, or roads, dams, pipelines, drains, trenches, tunnels or other works; or

(d)

repairing footwear for human wear.

but not including goods which become part of the goods, structures or works serviced, repaired, reconditioned or constructed, as the case may be, or lubricants as defined in sub-clause (1) of clause 1 of the First Schedule.

2)

Machinery, implements, apparatus and materials (other than road vehicles of the kinds ordinarily used for the transport of persons or the transport or delivery of goods, or parts for those vehicles) for use by a person exclusively or primarily and principally in the repair or maintenance of machinery, implements or apparatus used by him and covered by sub-item (1), but not including lubricants as defined in sub-clause (1) of clause 1 of the First Schedule.

3)

Parts for machinery, implements or apparatus covered by sub-item (1) or (2)."

3. The effect of the former item 7 was that goods of the kinds described and used for the purposes stated in the item were taxable at a rate of 10%. Persons who acquired goods to which the item applied were required to furnish an appropriate certificate to suppliers of the goods.

RULING

4. With the repeal of item 7, Third Schedule, it follows that persons engaged in servicing motor vehicles, earthmoving works or the other activities mentioned in the former provision are no longer entitled to the conditional 10% rate of sales tax on their equipment. It is now taxable at the general rate of 20% unless the purchaser is entitled to claim conditional exemption from sales tax, e.g., a government department or a local council.

5. The following Taxation Rulings which deal with the former item 7 are modified accordingly - ST 2006, ST 2025, ST 2046, ST 2058, ST 2102, ST 2142, ST 2190, ST 2195, ST 2208, ST 2211.

COMMISSIONER OF TAXATION
6 November 1986

References

ATO references:
NO 85/851-0

Date of effect:
20 August 1986

Related Rulings/Determinations:

ST 2006
ST 2025
ST 2046
ST 2058
ST 2102
ST 2142
ST 2190
ST 2195
ST 2208

Subject References:
SERVICING EQUIPMENT
CONSTRUCTION EQUIPMENT

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEM 7, THIRD SCHEDULE