Commonwealth Numbered Regulations - Explanatory Statements

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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) AMENDMENT REGULATIONS 2002 (NO. 1) 2002 NO. 88

EXPLANATORY STATEMENT

STATUTORY RULES 2002 No. 88

Issued by authority of the Minister for Revenue and Assistant Treasurer

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

A New Tax System (Goods and Services Tax) Amendment Regulations 2002 (No. 1)

Section 177-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Section 78-105 of the Act authorises regulations to specify schemes that are statutory compensation schemes. Regulation 78-105.01 of the A New Tax System (Goods and Services Tax) Regulations 1999 (the principal Regulations) defines a statutory compensation scheme as one that is a scheme or arrangement mentioned in Schedule 10 to the principal Regulations.

The amending Regulation amends Schedule 10 of the principal Regulations to include 2 Tasmanian schemes as statutory compensation schemes for the purposes of Division 78 of the Act. This Division permits statutory compensation schemes that are specified in regulations to be treated in the same manner as insurance policies; that is, it provides that supplies made by or to insurers in relation to the settlement of an insurance claim will not involve taxable supplies and will not attract the goods and services tax (GST). The insurer is compensated for lost input tax credits by being able to claim an adjustment reducing its net GST.

The GST treatment that relates to general insurance applies to Commonwealth, State and Territory statutory schemes for workers compensation, motor vehicle accident insurance and sporting injuries insurance.

The 2 Tasmanian statutory compensation schemes that are included are:

•       the motor accidents insurance scheme established under the Motor Accidents (Liabilities and Compensation) Act 1973 (Tas); and

•       the worker's compensation insurance scheme established under the Workers Rehabilitation and Compensation Act 1988 (Tas).

Listing the schemes in Schedule 10 to the principal Regulations provides certainty and ensures consistency of treatment with similar schemes operated by State and Territory governments.

Subsection 48(2) of the Acts Interpretation Act 1901 provides that regulations may not be expressed to take effect before the date of notification where a person would be adversely affected by the regulations. No person will be adversely affected by the amending Regulation.

The amending Regulations commenced on 1 July 2000 to be consistent with the other State and Territory statutory compensation schemes.


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