Commonwealth Numbered Regulations - Explanatory Statements

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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) AMENDMENT REGULATIONS 2004 (NO. 2) 2004 NO. 276

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 defines the term 'statutory compensation scheme' as a scheme or arrangement established under Australian law, and under which compensation for particular forms of injury, loss or damage is payable, and that is listed in the A New Tax System (Goods and Services Tax) Regulations 1999 (the Principal Regulations) or is of a kind listed in the Principal Regulations, but is not a compulsory third party scheme. Regulation 78-105.01 of 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 so as to list the military rehabilitation and compensation scheme arising from the Military Rehabilitation and Compensation Act 2004 as a statutory compensation scheme for the purposes of Division 78 of the Act. This Division operates to treat payments or supplies made in settlement of claims for compensation under statutory compensation schemes in the same way as payments or supplies made in settlement of claims under insurance policies.

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

Listing the military rehabilitation and compensation scheme in Schedule 10 to the Principal Regulations provides certainty and ensures consistency of treatment with similar schemes operated by the Commonwealth Government and the 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 persons, other than the Commonwealth, will be adversely affected by the amending Regulation.

The amending Regulation commenced on 1 July 2004 to align with the day fixed by Proclamation as the day on which sections 3 to 359 of the Military Rehabilitation and Compensation Act 2004 commenced.