A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 3)

Administered by Department of the Treasury

Legislation au F2012L01482 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2012 No. 149

Issued by authority of the Assistant Treasurer

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

A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 3)

 

Section 177-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the Act) enables the Governor-General to 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.  The Regulation is made under this section.

The purpose of this Regulation is to amend item 6 of the table in Schedule 11 to the A New Tax System (Goods and Services Tax) Regulations 1999 (the Principal Regulations) to update the reference to the legislation containing the Australian Capital Territory’s (ACT’s) compulsory third party (CTP) insurance scheme.  This scheme is now contained in the Road Transport (Third-Party Insurance) Act 2008 (ACT) and not in the Road Transport (General) Act 1999 (ACT).

For an insurer to use special rules in the Division 79 and 80 of the Act, the insurance must qualify as a CTP insurance scheme. This amendment will ensure that the ACT’s CTP scheme qualifies as a CTP scheme for the purposes of the Act. 

The normal GST rules – taxing supplies and providing input tax credits for acquisitions – are hard to apply under the GST’s invoice-credit system in the case of insurance.  As a result, special rules are set out in the Act for taxing insurance.  Broadly, these rules apply GST to the insurer’s margin to reflect the value added due to the insurer’s activities.

These rules for general insurance are difficult for insurers to apply to CTP schemes because the insurer will not often know the input tax credit entitlement of the claimant.  The process is also complicated by special features of CTP insurance schemes (for example, settlement sharing arrangements across multiple insurers and states, nominal defendants and certain bulk billing arrangements). As a result, the Act provides special rules for CTP insurers.  For the insurer to use these special rules, the insurance must be supplied under a CTP insurance scheme.  This is defined in section 195-1 of the Act as a scheme or arrangement that is established by an Australian law and specified, or is of a kind specified, in the Principal Regulations.

Regulation 195-1.01 provides that the specified schemes are listed in Schedule 11 to the Principal Regulations.  Schedule 11 lists the names of the schemes and arrangements that govern CTP insurance in each of the Australian states and territories.  It also identifies the relevant legislation in each of these jurisdictions. The specified ACT legislation in Schedule 11 is no longer accurate.  This is due to the removal of the ACT’s CTP scheme from Road Transport (General) Act 1999 (ACT).  The Road Transport (Third-Party Insurance) Act 2008 (ACT) now governs CTP insurance in the ACT and came into force on 3 March 2008. 

The ACT Government requested that this outdated reference be corrected.

The amending Regulation replaced the words ‘Road Transport (General) Act 1999 (ACT)’ in the second column of the table in Schedule 11 of Regulation 195-1.01 with the words ‘Road Transport (Third-Party Insurance) Act 2008 (ACT)’.

The Regulation commenced on the day after it was registered on the Federal Register of Legislative Instruments. 

The Office of Best Practice Regulation agreed that the changes were of a minor nature and no further analysis in the form of a Regulation Impact Statement (RIS) was required.  It granted an exemption from the requirement to produce a RIS (reference 12267).  Accordingly, a RIS has not been prepared.

However, as the Regulation only confirms the existing practice of ACT CTP insurers (taxpayers), it is not considered to add to compliance costs, and may actually reduce compliance costs by providing a reference to a current rather than incorrect statute. Taxpayers would not have to investigate further to find the current statute. 

No detailed consultation was undertaken on this Regulation as it only confirms existing practice and is of a minor technical nature.  However, the Australian Taxation Office and the ACT Treasury were consulted.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

A New Tax System (Goods and Services Tax) Regulation 2012 (No. 3)

This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview

A New Tax System (Goods and Services Tax) Regulation 2012 (No. 3) amends an

out-of-date reference to Australian Capital Territory compulsory third party legislation in item 6 of Schedule 11 to the A New Tax System (Goods and Services Tax) Regulations 1999.

 

Human rights implications

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

This Regulation is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Overview

The A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 3) was enacted by the Governor-General under the authority granted by the A New Tax System (Goods and Services Tax) Act 1999. This regulation was introduced to address the issue of an outdated reference to Australian Capital Territory (ACT) compulsory third party (CTP) insurance legislation in Schedule 11 of the A New Tax System (Goods and Services Tax) Regulations 1999. The purpose of this amendment was to update the legislation to reflect the change in the governing statute for the ACT's CTP insurance scheme from the Road Transport (General) Act 1999 (ACT) to the Road Transport (Third-Party Insurance) Act 2008 (ACT). This ensures that the CTP scheme in the ACT is correctly identified for the purposes of the Act, thereby maintaining the integrity and accuracy of the tax system in relation to CTP insurance schemes. The regulation was made to align with the existing practice and reduce any potential confusion or compliance costs for taxpayers by providing an accurate reference to current legislation.

Scope and Application

The New Tax System (Goods and Services Tax) Regulation 2012 (No. 3) amends the A New Tax System (Goods and Services Tax) Regulations 1999 to update the reference to the Australian Capital Territory's (ACT) compulsory third party (CTP) insurance scheme. The regulation applies to entities involved in CTP insurance within the ACT, ensuring they comply with the updated legislative reference under the Road Transport (Third-Party Insurance) Act 2008 (ACT). The purpose of this amendment is to align the Principal Regulations with current ACT legislation, thereby facilitating compliance and reducing confusion for insurers. The regulation's scope is confined to correcting a technical inaccuracy in the reference to ACT legislation concerning CTP insurance, without altering the existing substantive requirements or obligations under the Act. It ensures that CTP insurance schemes in the ACT continue to qualify for the special rules under Division 79 and 80 of the A New Tax System (Goods and Services Tax) Act 1999.

Key Provisions

The A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 3) primarily amends the reference to Australian Capital Territory (ACT) compulsory third party (CTP) insurance legislation within Schedule 11 of the A New Tax System (Goods and Services Tax) Regulations 1999 (Principal Regulations). Specifically, it updates the reference from the Road Transport (General) Act 1999 (ACT) to the Road Transport (Third-Party Insurance) Act 2008 (ACT), correcting the legislation governing CTP insurance in the ACT. This amendment ensures that the special rules for CTP insurance under the Goods and Services Tax (GST) Act align with the current ACT legislation. This update is essential for insurers to correctly apply the special rules for CTP insurance under the GST Act, ensuring the scheme qualifies for GST exemptions. The Regulation imposes certain obligations on insurers operating in the ACT under the CTP insurance scheme. These obligations include ensuring that the insurance provided falls within the scope of the updated legislation, the Road Transport (Third-Party Insurance) Act 2008 (ACT), and that the special GST rules for CTP insurance are correctly applied. Insurers must also ensure that any claims and settlements comply with the current legislative framework, particularly concerning input tax credits and GST application. This amendment facilitates compliance by providing a precise and current reference, thereby reducing potential confusion and ensuring that insurers operate within the correct legal parameters. While the Regulation itself does not introduce new offences or penalties, it ensures that insurers are operating under the correct legislative framework. Non-compliance with the updated reference, or failure to correctly apply the special GST rules for CTP insurance, could lead to inaccuracies in GST reporting and potential financial penalties. The existing GST rules include penalties for incorrect or incomplete GST returns, which can range from fines to substantial penalties for wilful or negligent behaviour. These penalties are determined under the GST Act and are separate from the specific amendments made by this Regulation. In summary, the A New Tax System (Goods and Services Tax) Amendment Regulation 2012 (No. 3) serves a technical purpose by updating a legislative reference in the Principal Regulations. This ensures that insurers in the ACT can correctly apply the special GST rules for CTP insurance. The Regulation imposes clear obligations on insurers to align with the updated legislative framework, thereby facilitating compliance and potentially reducing administrative burdens by providing a precise reference. While the Regulation does not introduce new penalties, adherence to the correct legislative framework is crucial to avoid existing GST penalties.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.