Bills Digest No. 29   1997-98 Sales Tax Assessment Amendment Bill 1997


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History

Sales Tax Assessment Amendment Bill 1997

Date Introduced: 28 August 1997
House: House of Representatives
Portfolio: Treasury
Commencement: With effect from 6 August 1997

Purpose

The Bill makes consequential amendments to the Sales Tax Assessment Act 1992 resulting from the Government's decision to increase rates of sales tax on alcoholic beverages.

Background

The present Bill forms part of a package of nine proposed laws. This package collectively constitutes the Commonwealth's legislative response to a unanimous request from the State and Territory Governments to protect their revenues following the High Court's decisions in Ha & Another v State of New South Wales & Others and Walter Hammond & Associates Pty Limited v State of New South Wales and Others.

A detailed 'background' is provided in the Bills Digest for the Franchise Fees Windfall Tax (Collection) Bill 1997.

Main Provisions

The proposed changes will operate to protect the interests of some small businesses.

An unintended consequence of the Government's package designed to safeguard State and Territory revenues is that raising sales tax rates will push some businesses with relatively small turnovers over current compliance thresholds under the Sales Tax Assessment Act 1992. Had States and Territory taxes been able to continue collecting their (notional) portion of alcohol taxes separately from the Commonwealth, this problem would not have arisen.

As noted in the Explanatory Memorandum, section 29 of the Sales Tax Assessment Act 1992 exempts firms from sales tax where their annual liability is $10 000 or less.

Item 1 of Schedule 1 seeks to maintain the real value of the current exemption from sales tax of businesses such as small wineries. The mechanism for achieving this end (ie maintaining the status quo) is to exclude sales tax raised as part of the Commonwealth's post Ha and Hammond safety net proposals from the calculation of sales tax liability for the purposes of the small business exemption.

Item 4 of Schedule 1 seeks to maintain existing arrangements in relation to the quarterly payment of sales tax.

Under section 62 of the Sales Tax Assessment Act 1992, businesses with an annual sales tax liability of less than $ 57 571 presently need not remit sales tax to the Australian Taxation Office on a monthly basis, but may do so quarterly.The amendment will exclude the Commonwealth's post Ha and Hammond 15% tax increase on alcoholic drinks from calculations for the purposes of the section 62 threshold.

Contact Officer and Copyright Details

Bob Bennett
2 September 1997
Bills Digest Service
Information and Research Services

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

IRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 1997

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1997.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 3 September 1997


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