Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.15) 2015
Explanatory Statement
General Outline of Instrument
- This determination is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999.
- The determination allows a merchandiser that acquires goods on a sale or return basis to issue Recipient Created Tax Invoices (RCTIs) to a supplier if the merchandiser determines the value of the taxable supply.
- The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect
4. The instrument commences on the day after registration.
5. The instrument does not apply retrospectively.
What is this instrument about:
6. The purpose of this instrument is to outline a class of tax invoices that the Commissioner has determined may be issued by recipients of taxable supplies. The Commissioner makes the determination by taking account of a number of factors including the type of industry, the taxable supply, GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.
7. A tax invoice that belongs to a class of tax invoices for a taxable supply of goods may be issued by a merchandiser that is the recipient of a sale or return basis taxable supply where:
- the recipient establishes the value of the goods acquired from the supplier; and
- the recipient satisfies the requirements set out in Clause 6 of the legislative instrument.
What is the effect of this instrument:
8. The effect of this instrument is to allow a merchandiser that is the recipient of a sale or return basis taxable supply to issue RCTIs to the supplier. The merchandiser has the expertise, knowledge and access to the relevant information to accurately calculate the value of the taxable supply. This instrument allows them to streamline their current invoicing and payment practices.
9. Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The legislative instrument is minor or machinery in nature.
Background:
10. This instrument replaces A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 14) 2000. The replaced instrument is repealed on the commencement of this determination.
Consultation:
11. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law.
12. Because there is no substantive change from the previous instrument therefore the instrument is considered minor or machinery in nature.
13. As such, no further consultation has been undertaken in the development of this instrument.
James O’Halloran
Deputy Commissioner of Taxation
15 September 2015
Statement of Compatibility with Human Rights
This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Goods and Services Tax: Classes of Recipient Created Tax Invoice
Determination (No. 15) 2015
This Legislative Instrument 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 of the Legislative Instrument
This Legislative Instrument allows a merchandiser that is the recipient of a sale or return basis taxable supply to issue Recipient Created Tax Invoices (RCTIs) to a supplier, if the merchandiser determines the value of the taxable supply, and the requirements of the legislative instrument are satisfied.
Human rights implications
This instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of current invoicing and payment practices.
Conclusion
This instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No.15) 2015 was enacted to refine the framework for issuing Recipient Created Tax Invoices (RCTIs) under the A New Tax System (Goods and Services Tax) Act 1999. This legislative instrument was introduced to address the need for a more streamlined invoicing process while maintaining the integrity of the GST system. The determination allows merchandisers who acquire goods on a sale or return basis to issue RCTIs to their suppliers, provided the merchandiser determines the value of the taxable supply and meets the specified requirements. This change is intended to facilitate practical use of RCTIs by businesses, thereby simplifying their invoicing and payment practices with minimal compliance costs. The determination was made by the Commissioner of Taxation and aligns with the policy objective of balancing practical business needs with the integrity of the GST system.
Scope and Application
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 15) 2015 applies to merchandisers who acquire goods on a sale or return basis, allowing them to issue Recipient Created Tax Invoices (RCTIs) to their suppliers provided they determine the value of the taxable supply and meet the specified requirements. This legislative instrument, made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999, is designed to facilitate practical use of RCTIs by businesses while maintaining the integrity of the GST system. It applies on a national level and commences on the day after registration, but it does not apply retrospectively. The instrument replaces the previous Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 14) 2000, which is repealed upon the commencement of this determination. Compliance costs are expected to be minimal as the instrument is considered minor or machinery in nature, with no substantive changes from the previous instrument, hence no further consultation was deemed necessary. Additionally, the instrument is compatible with human rights, as it does not engage any of the applicable rights or freedoms.
Key Provisions
The primary operative sections of the Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 15) 2015 (the Determination) are sections 6 to 9. Section 6 outlines the conditions under which a merchandiser can issue a Recipient Created Tax Invoice (RCTI) when they receive goods on a sale or return basis, specifically requiring that the merchandiser must establish the value of the goods and meet certain criteria (section 6(1)). Section 7 expands on the nature of the taxable supply and the conditions for issuing an RCTI (section 7). Section 8 explains that the merchandiser must satisfy the requirements set out in Clause 6 of the Determination (section 8(1)). Section 9 details the effect of this Determination, which allows the merchandiser to streamline their current invoicing and payment practices by issuing RCTIs to the supplier (section 9).
The Determination imposes specific obligations on parties governed by it. For example, it requires that a merchandiser who receives goods on a sale or return basis must determine the value of the taxable supply accurately (section 6(1)). Additionally, the merchandiser must ensure that they meet all the requirements stipulated in Clause 6 of the Determination to be eligible to issue an RCTI (section 8(1)). These obligations are intended to maintain the integrity of the GST system while facilitating practical use of RCTIs by businesses.
There are no specific offences outlined in the Determination, but any breach of the requirements for issuing an RCTI could potentially lead to civil or administrative consequences. The Determination is considered minor or machinery in nature, and as such, it is unlikely to impose significant penalties. However, any non-compliance with the GST Act 1999, which the Determination supports, could result in penalties under that Act, including fines and interest on unpaid GST. The specific penalties would depend on the nature and severity of the breach, as outlined in the GST Act 1999.