Commonwealth Numbered Regulations - Explanatory Statements

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SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) (EXCLUDED STBS) REGULATIONS 1997NO. 272

STATUTORY RULES 1997 No. 272

Issued by the Authority of the Assistant Treasurer

Sales Tax (Exemptions and Classifications) Act 1992

Sales Tax (Exemptions and Classifications) (Excluded STBs) Regulations

Section 16 of the Sales Tax (Exemptions and Classifications) Act 1992 (the Act) empowers the Governor-General to make regulations prescribing matters which are required or permitted to be prescribed by regulations, or which are necessary or convenient to be prescribed by regulations, for carrying out or giving effect to the Act.

The purpose of the regulations is to prescribe those wholly-owned State and Territory Bodies (STBs) which are 'excluded STBs' for the purposes of Schedule 1 (Item 126A) to the Act, that is, prescribe those STBs which are excluded from the Wholesale Sales Tax (WST) exemption provided by Schedule 1 (Item 126A) to the Act and are therefore subject to WST. STBs are bodies which are 'controlled' by one or more government entities, that is, they are entities owned by States or Territories. Sections 3D(1) - 3D(5) of the Act specify the control tests.

The Statement of Policy Intent (SOPI) agreed at the 1994 Premiers' Conference required the Commonwealth to exempt all STBs from WST and the States and Territories to subject all STBs to WST equivalent regimes.

In order to comply with the SOPI, the Commonwealth amended the Act in 1995 to exempt all STBs from WST. Subsequently, all States and Territories have sought to exclude, on the grounds of administrative convenience, some STBs from the WST exemption provided by Schedule 1 (Item 126A) to the Act.

An STB will not be exempt from WST under Schedule 1 (Item 126A) to the Act if it is an 'excluded STB'. Paragraph (a) of subsection 3D(6) of the Act provides that an 'excluded STY means an STB that, at a particular time, is prescribed (by regulations) as an 'excluded STB' in relation to that time for the purposes of the Act.

Subsection 3D(8) of the Act requires that the States and Territories consent to regulations which prescribe that an STB is an 'excluded STY for the purposes of the Act. Since the regulations prescribe those STBs which are 'excluded STBs' for the purposes of the Act, all State Premiers and Territory Chief Ministers have been consulted regarding the proposed regulations and have provided their written consent.

The regulations commenced on the date of gazettal.