Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 20) 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 scrap metal dealer, who is the recipient of a taxable supply to issue Recipient Created Tax Invoices (RCTIs) to a supplier of scrap metal if the scrap metal dealer 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 scrap metal dealer who is the recipient of a taxable supply, may issue a tax invoice that belongs to a class of tax invoices for a taxable supply of scrap metal where:
- the recipient establishes the value of those products after the supply is made using a qualitative or quantitative process 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 scrap metal dealers to issue RCTIs to the supplier of the taxable supply. The recipient of the scrap metal 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. 29) 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 The replaced instrument is repealed on the commencement of this determination.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. 20) 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 certain scrap metal dealers to issue Recipient Created Tax Invoices (RCTIs) to suppliers, if the scrap metal dealers determine 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. 20) 2015 was enacted to streamline invoicing practices within the scrap metal industry under the A New Tax System (Goods and Services Tax) Act 1999. This instrument, created by the Commissioner of Taxation under subsection 29-70(3), facilitates the use of Recipient Created Tax Invoices (RCTIs) by allowing scrap metal dealers, who are recipients of taxable supplies, to issue these invoices provided they determine the value of the scrap metal post-supply and meet specific criteria. The policy objective is to balance the practical use of RCTIs by businesses while maintaining the integrity of the GST system. The instrument does not apply retrospectively and is considered minor in nature, hence no further consultation was deemed necessary. It replaces an earlier determination from 2000, streamlining invoicing and payment practices for scrap metal dealers with minimal compliance costs.
Scope and Application
This determination under the A New Tax System (Goods and Services Tax) Act 1999 provides specific guidelines allowing scrap metal dealers to issue Recipient Created Tax Invoices (RCTIs) to suppliers, provided the scrap metal dealers determine the value of the taxable supply and meet the requirements set out in the legislative instrument. The determination is made under subsection 29-70(3) and applies to scrap metal dealers who are recipients of a taxable supply of scrap metal. It aims to balance the practical use of RCTIs by businesses with maintaining the integrity of the GST system. The instrument is minor or machinery in nature and does not require further consultation due to its limited impact on the existing law. It replaces the 1999 Classes of Recipient Created Tax Invoice Determination and comes into effect the day after registration without retrospective application. Compliance costs are expected to be minor. The instrument is compatible with human rights as it does not engage any of the applicable rights or freedoms and facilitates more efficient invoicing and payment practices.
Key Provisions
The Goods and Services Tax: Classes of Recipient Created Tax Invoice Determination (No. 20) 2015 (the "Instrument") allows certain scrap metal dealers to issue Recipient Created Tax Invoices (RCTIs) to suppliers of scrap metal (subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999). Specifically, a scrap metal dealer who is the recipient of a taxable supply may issue an RCTI if they determine the value of the scrap metal after the supply is made using a qualitative or quantitative process and satisfy the requirements set out in Clause 6 of the Instrument (Clause 7). This provision streamlines the invoicing and payment practices for scrap metal dealers by allowing them to issue tax invoices directly to the supplier. The Instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003 and replaces the A New Tax System (Goods and Services Tax) 1999 Classes of Recipient Created Tax Invoice Determination (No. 29) 2000.
The Instrument imposes certain obligations on scrap metal dealers who wish to issue RCTIs under its provisions. These include determining the value of the scrap metal after the supply is made using a qualitative or quantitative process and satisfying the requirements set out in Clause 6 of the Instrument (Clause 7). These requirements are designed to ensure that the RCTIs are accurate and comply with the GST system, while also facilitating the practical use of RCTIs by businesses.
There are no specific offences, penalties, or civil/criminal consequences outlined in the Instrument for breach of its provisions. However, the Instrument is compatible with human rights as it does not raise any human rights issues (Clause 15). It is important to note that the Instrument is minor or machinery in nature and does not substantially change the law, and therefore consultation was not considered necessary or appropriate (Clauses 11-13). The 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 (Clause 16).