Commonwealth Numbered Acts

SALES TAX ASSESSMENT (No. 2) AMENDMENT ACT 1978 No. 198, 1978 - SECT 3

3. Section 4 of the Principal Act is amended-

(a) by omitting from sub-section (1) ''For the purposes of this Act'' (first
occurring) and substituting ''Subject to sub-sections (2), (3) and (5) of this
section, to section 4A and to sub-sections (5B) and (5C) of section 18 of the
Sales Tax Assessment Act (No. 1) 1930 in their application in accordance with
section 12 of this Act, for the purposes of this Act''; and

   (b)  by omitting sub-section (3) and substituting the following
        sub-sections:

''(2) Subject to sub-section (5), where-

   (a)  goods have been sold after 20 September 1978 by a person (in this
        sub-section referred to as the 'vendor'), being a registered person or
        a person required to be registered, to a person (in this sub-section
        referred to as the 'purchaser'), being an unregistered person or a
        registered person who has not quoted his certificate in respect of the
        purchase of the goods; and

   (b)  the goods-

        (i)    were purchased by the vendor from the manufacturer of the
               goods;

        (ii)   were manufactured for the purchaser in whole or in part out of
               materials supplied by the purchaser; and

        (iii)  were sold by the vendor to the purchaser for an amount that is
               less than-

                (A)  if the goods are of a class which the vendor himself
                     sells by wholesale-the amount for which the goods could
                     reasonably be expected to have been sold by the vendor by
                     wholesale if all the materials used in the manufacture of
                     the goods had been purchased by the manufacturer in the
                     ordinary course of his business from a person with whom
                     he was dealing at arm's length; or

                (B)  in any other case-the amount for which the vendor could
                     reasonably be expected to have purchased identical goods
                     from a manufacturer if the manufacturer had, in the
                     ordinary course of his business, manufactured the
                     identical goods for sale wholly out of materials
                     purchased in the ordinary course of his business from a
                     person with whom he was dealing at arm's length and had
                     sold the identical goods to the vendor by wholesale,

the sale value of the goods, for the purposes of this Act, is-

   (c)  where all the relevant materials used in the manufacture of the goods
        consisted of goods the sale values of which were exempt from sales tax
        by virtue of the Sales Tax (Exemptions and Classifications) Act 1935-

        (i)    if the goods are of a class which the vendor himself sells by
               wholesale-the amount for which the goods could reasonably be
               expected to have been sold by the vendor by wholesale if all
               the materials used in the manufacture of the goods had been
               purchased by the manufacturer in the ordinary course of his
               business from a person with whom he was dealing at arm's
               length; or

        (ii)   in any other case-the amount for which the vendor could
               reasonably be expected to have purchased identical goods from a
               manufacturer if the manufacturer had, in the ordinary course of
               his business, manufactured the identical goods for sale wholly
               out of materials purchased in the ordinary course of his
               business from a person with whom he was dealing at arm's length
               and had sold the identical goods to the vendor by wholesale;

   (d)  where all the relevant materials used in the manufacture of the goods
        comprised-

        (i)    excluded goods;

        (ii)   goods the sale values of which were not exempt from sales tax
               by virtue of the Sales Tax (Exemptions and Classifications) Act
               1935; or

        (iii)  excluded goods and goods referred to in subparagraph (ii),

the amount charged to the purchaser by the vendor in respect of the goods; or

   (e)  in any other case-the sum of-

        (i)    the amount for which the vendor could reasonably be expected to
               have purchased by wholesale materials identical in all material
               respects with the relevant materials used in the manufacture of
               the goods which consisted of goods the sale values of which
               were exempt from sales tax by virtue of the Sales Tax
               (Exemptions and Classifications) Act 1935 from another person
               who sold by wholesale the materials identical in all material
               respects with the relevant materials in the ordinary course of
               his business; and

        (ii)   the amount charged to the purchaser by the vendor in respect of
               the goods.

''(3) Subject to sub-section (5), where-

   (a)  goods have been sold after 20 September 1978 by a person (in this
        sub-section referred to as the 'vendor'), being a registered person or
        a person required to be registered, to a person (in this sub-section
        referred to as the 'purchaser'), being an unregistered person or a
        registered person who has not quoted his certificate in respect of the
        purchase of the goods;

   (b)  the goods were purchased by the vendor from the manufacturer of the
        goods; and

   (c)  the goods were manufactured for the purchaser in whole or in part out
        of materials sold to the manufacturer-

        (i)    by the purchaser; or

        (ii)   by another person who did so at the request of, or under an
               agreement with, the purchaser,

the sale value of the goods, for the purposes of this Act, is-

   (d)  if the goods are of a class which the vendor himself sells by
        wholesale-the amount for which the goods could reasonably be expected
        to have been sold by the vendor by wholesale if all the materials used
        in the manufacture of the goods had been purchased by the manufacturer
        in the ordinary course of his business from a person with whom he was
        dealing at arm's length; or

   (e)  in any other case-the amount for which the vendor could reasonably be
        expected to have purchased identical goods from another manufacturer
        if the other manufacturer had, in the ordinary course of his business,
        manufactured the identical goods for sale wholly out of materials
        purchased in the ordinary course of his business from a person with
        whom he was dealing at arm's length and had sold the identical goods
        to the vendor by wholesale.

''(4) Where-

   (a)  goods (in this sub-section referred to as the 'relevant goods') have
        been sold by a registered person, or a person required to be
        registered, who purchased the goods from the manufacturer, to an
        unregistered person or to a registered person who has not quoted his
        certificate in respect of the purchase of the goods;

   (b)  the Commissioner is satisfied that, having regard to any connection
        between the vendor and the purchaser of the relevant goods or to any
        other relevant circumstances (including circumstances arising out of
        any agreement entered into between the vendor and the purchaser, or
        out of any other agreement, that was related, directly or indirectly,
        to the sale of the goods), the vendor and the purchaser were not
        dealing with each other at arm's length in relation to the
        transaction; and

   (c)  the Commissioner is also satisfied-

        (i)    that the amount for which the relevant goods were sold is less
               than the amount (in this sub-section referred to as the 'arm's
               length price') for which, in the opinion of the Commissioner,
               the relevant goods could reasonably be expected to have been
               sold if the vendor and the purchaser had been dealing with each
               other at arm's length in relation to the transaction; or

        (ii)   that-

                (A)  the purchaser could have purchased identical goods from
                     another person (not being a manufacturer of identical
                     goods) by wholesale and obtained delivery of the
                     identical goods at or about the time when the purchaser
                     obtained delivery of the relevant goods; and

                (B)  the amount for which the relevant goods were sold is less
                     than the amount (in this sub-section referred to as the
                     'alternative price') for which, in the opinion of the
                     Commissioner, the identical goods could reasonably be
                     expected to have been sold to the purchaser,

the Commissioner shall alter the sale value of the relevant goods to the
amount ascertained in accordance with the following paragraphs:

   (d)  if the Commissioner is satisfied as to the matter mentioned in
        sub-paragraph (i) of paragraph (c) but not as to the matters mentioned
        in sub-paragraph (ii) of that paragraph-an amount equal to the arm's
        length price;

   (e)  if the Commissioner is satisfied as to the matters mentioned in
        sub-paragraph (ii) of paragraph (c) but not as to the matter mentioned
        in sub-paragraph (i) of that paragraph-an amount equal to the
        alternative price;

   (f)  if the Commissioner is satisfied as to the matter mentioned in
        sub-paragraph (i) of paragraph (c) and also as to the matters
        mentioned in sub-paragraph (ii) of that paragraph-an amount equal to
        the lesser of-

        (i)    the arm's length price; and

        (ii)   the alternative price.

''(5) Where the Commissioner alters the sale value of goods in pursuance of
sub-section (4), the sale value so altered shall be the sale value of the
goods for the purposes of this Act.

''(6) For the purposes of this section, the sale value of goods shall not be
increased by any amount payable in respect of sales tax but, when the goods
are sold in bond, the sale value shall be increased by the amount of any duty
of excise to which the goods would be subject if entered for home consumption
at the time at which they are sold.

''(7) For the purposes of this section-

   (a)  goods manufactured for a person (in this sub-section referred to as
        the 'customer') shall be taken to have been manufactured in whole or
        in part out of materials supplied by the customer if the goods were
        manufactured in whole or in part out of materials-

        (i)    which were supplied by the customer or by another person at the
               request of, or under an agreement with, the customer; or

        (ii)   which the customer purchased, or agreed to purchase, from the
               manufacturer; and

   (b)  the materials which were so supplied or purchased and were used in the
        manufacture of the goods shall be taken to have been the relevant
        materials used in the manufacture of the goods.

''(8) In this section-

   (a)  a reference to excluded goods shall be read as a reference to goods,
        including commodities, of a kind referred to in paragraph (a) or (b)
        of the definition of 'goods' in sub-section (1) of section 3 of the
        Sales Tax Assessment Act (No. 1) 1930 in its application in accordance
        with section 12 of this Act; and

   (b)  a reference to identical goods shall be read as a reference to goods
        identical in all material respects with the goods in relation to which
        the expression is used.

''(9) In this section, 'agreement' means any agreement, arrangement or
understanding-

   (a)  whether formal or informal;

   (b)  whether express or implied; or

   (c)  whether or not enforceable, or intended to be enforceable, by legal
        proceedings.''.