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A NEW TAX SYSTEM (INDIRECT TAX AND CONSEQUENTIAL AMENDMENTS) ACT 1999 NO. 176, 1999 - SCHEDULE 6

- Indirect Tax Transition Acts

A New Tax System (Goods and Services Tax Transition) Act 1999

1 Subsection 5(3) (after table item 3)

Insert:


3A
hire purchase agreement
Income Tax Assessment Act 1997

2 After subsection 11(1)

Insert:

(1A)
However, this section does not apply to:

(a)
a supply of a warranty (whether express, implied or required by law) that relates to goods or a service, if the value of the warranty was included in the price of the goods or service; or

(b)
a supply of a right that is an option to purchase, under a hire purchase agreement, goods hired under that agreement; or

(c)
a supply of a right to use software if:

(i)
the value of the right was included in the price of the software; and
(ii)
the right to use the software is for an indefinite period.

3 At the end of section 11

Add:

(4)
In this section:

warranty , in relation to goods or a service, means an undertaking or obligation in relation to:

(a)
the quality, performance or characteristics of the goods or service; or

(b)
the provision of services that are or may at any time be required in respect of the goods or service; or

(c)
the supply of parts that are or may at any time be required for the goods;

given or made in connection with the supply of the goods or service.

4 After subsection 13(4)

Insert:

(4A)
For the purposes of this section, a Commonwealth entity is to be treated as if it were entitled or not entitled to a full input tax credit (whichever is relevant) if it would be so entitled or not entitled if it were an entity other than a Commonwealth entity.

5 Paragraph 13(5)(b)

After "conduct", insert ", on or after 1 July 2000,".

6 At the end of subsection 13(5)

Add:

; or (c) for the supplier under the agreement (acting either alone or with the agreement of one or more of the other parties to the agreement) to conduct, before 1 July 2000, a general review, renegotiation or alteration of the consideration that takes account of the imposition of the GST.

7 At the end of section 14

Add:

(4)
If:

(a)
an agreement is for the supply of a life membership; and

(b)
the entity to which the supply is made would be entitled to a full input tax credit for it;

subsection (3) has effect as if the reference to 2 December 1998 were a reference to 8 July 1999.

(5)
For the purposes of this section, a Commonwealth entity is to be treated as if it were entitled or not entitled to a full input tax credit (whichever is relevant) if it would be so entitled or not entitled if it were an entity other than a Commonwealth entity.

8 Paragraph 16(2)(a)

Repeal the paragraph, substitute:

(a)
second-hand goods, unless:

(i)
you imported them; and
(ii)
nobody was entitled to quote under the Sales Tax Assessment Act 1992 for the importation; and
(iii)
you did not hold the goods, at any time prior to 1 July 2000, for a purpose other than for sale or exchange in the ordinary course of business.

9 After subsection 16(4)

Insert:

(4A)
The special credit is treated as though it were an input tax credit for the purposes of the Income Tax Assessment Act 1997 (see Division 27 and sections 110-45 and 110-50).

10 After section 19

Insert:

19A Sales of motor vehicles held under operating leases since 2 December 1998

(1)
If, in relation to a supply of a motor vehicle, all of the following conditions are met, the supplier of the vehicle is entitled to a special credit equal to 1 /11 of the price of the supply:

(a)
the supply is the first sale of the motor vehicle to take place on or after 1 July 2000;

(b)
the supplier was, immediately before the sale, the lessor of the motor vehicle under an operating lease;

(c)
the supplier bought the motor vehicle before 2 December 1998 for the purpose of leasing it under an operating lease;

(d)
the motor vehicle has been the subject of sales tax.

(2)
The special credit is treated as though it were an input tax credit attributable to any one tax period of your choice.

(3)
In this section:

operating lease means a lease under which the lessor effectively retains substantially all risks and benefits incidental to the ownership of the motor vehicle.

11 After subsection 20(3)

Insert:

(3A)
If:

(a)
you are a member of a GST group; and

(b)
you make an acquisition from another member of that group; and

(c)
your entitlement to an input tax credit on the acquisition is affected by subsection (2) or (3);

paragraph 48-40(2)(a) of the GST Act does not apply to the supply to which the acquisition relates.

Note: Paragraph 48-40(2)(a) of the GST Act prevents supplies between members of a GST group being treated as taxable supplies.

12 Section 23

Repeal the section, substitute:

23 Input tax credits for insurance premiums

(1)
You are not entitled to an input tax credit for a premium paid on an insurance policy before 1 July 2003 unless:

(a)
you are registered; and

(b)
you have notified the Commissioner, in the approved form, that you intend to claim all input tax credits for which you are entitled for payments of the premiums on insurance policies before 1 July 2003; and

(c)
the policy commences on or after the day on which your notification takes effect.

(2)
You may only notify the Commissioner once, and you may not revoke your notification.

(3)
You may only notify the Commissioner:

(a)
before you become registered; or

(b)
at the time that you lodge a GST return.

(4)
Your notification takes effect on:

(a)
if you notified the Commissioner before you became registered—the date of effect of your registration; or

(b)
if you notified the Commissioner at the time that you lodged a GST return—the day after the day on which you lodged the GST return.

A New Tax System (Wine Equalisation Tax and Luxury Car Tax Transition) Act 1999

13 Subsections 3(2) and (3)

Repeal the subsections, substitute:

(2)
However, this section:

(a)
does not apply if you have borne sales tax in respect of the wine at a rate that is less than 20%; and

(b)
does not apply to second-hand goods.

(3)
If you have borne sales tax in respect of the wine at a rate of more than 26%, the amount of the special credit is equal to 12 /41 of the amount of sales tax that you have borne in respect of the wine.

(3A)
If you have borne sales tax in respect of the wine at a rate of not more than 26% but at least 20%, the amount of the special credit is as follows:

where:

sales tax amount is the amount of sales tax that you have borne in respect of the wine.

sales tax rate is the rate at which you have borne sales tax in respect of the wine.

14 Subsection 3(6)

Insert:

sales tax means any tax imposed under the name of sales tax by any Act.


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