Sales Tax Assessment (Excluded STBs) regulations 1997 No. 273
EXPLANATORY STATEMENT
STATUTORY RULES 1997 No. 273
Issued by the Authority of the Assistant Treasurer
Sales Tax Assessment Act 1992
Sales Tax Assessment (Excluded STBs) regulations
Subsection 131 of the Sales Tax Assessment 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 transition credit grounds two and three in Schedule 1 to the Act, that is, prescribe those STBs which are excluded from claiming a Wholesales Sales Tax (WST) credit under transition credit grounds two and three in Schedule 1 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 Sales Tax (Exemptions and Classifications) Act specify the control tests. Transitional credit grounds specify the eligibility criteria for WST credits.
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 being able to claim the WST credits provided by transitional credit grounds two and three in Schedule 1 to the Act.
An STB will not be exempt from WST, that is, unable to claim WST credits, if it is an 'excluded STB'. An 'excluded STB' is one which is prescribed by regulations made for the purpose of a transitional credit ground, such as transitional credit grounds two and three in Schedule 1 to the Act.
While the Act does not require that the States and Territories consent to regulations which prescribe that an STB is an 'excluded STB' for the purposes of a transitional credit ground, 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.
Overview
The Sales Tax Assessment (Excluded STBs) regulations 1997 No. 273 were enacted under the authority of the Assistant Treasurer and issued pursuant to subsection 131 of the Sales Tax Assessment Act 1992. These regulations were introduced to address the need to prescribe certain wholly-owned State and Territory Bodies (STBs) that are excluded from claiming Wholesales Sales Tax (WST) credits under transition credit grounds two and three in Schedule 1 of the Act. The intent behind these regulations aligns with the Statement of Policy Intent agreed upon at the 1994 Premiers' Conference, which required the Commonwealth to exempt all STBs from WST while the States and Territories were tasked with subjecting all STBs to WST equivalent regimes. These regulations serve to implement the policy by identifying specific STBs that are precluded from claiming WST credits, thereby ensuring compliance with the broader legislative framework and policy objectives.
Scope and Application
The Sales Tax Assessment (Excluded STBs) regulations 1997 No. 273, pursuant to the Sales Tax Assessment Act 1992, aim to delineate specific wholly-owned State and Territory Bodies (STBs) that are 'excluded STBs'. These regulations are integral in determining the eligibility of STBs for Wholesales Sales Tax (WST) credits under transition credit grounds two and three in Schedule 1 of the Act. The regulation identifies STBs, which are entities controlled by state or territory governments, and specifies those that are ineligible for WST credits, thereby subjecting them to WST. The scope of these regulations extends to the Commonwealth jurisdiction, with States and Territories consulted to ensure alignment with administrative convenience and policy intent as agreed upon in the 1994 Premiers' Conference. The regulations commenced on the date of gazettal, ensuring a seamless transition in the application of WST to the specified STBs.
Key Provisions
The Sales Tax Assessment (Excluded STBs) regulations 1997 No. 273 are made under the authority of Subsection 131 of the Sales Tax Assessment Act 1992 (the Act). These regulations aim to specify those wholly-owned State and Territory Bodies (STBs) that are 'excluded STBs' for the purposes of transition credit grounds two and three in Schedule 1 to the Act. In plain terms, these regulations identify which STBs cannot claim a Wholesale Sales Tax (WST) credit under the specified transitional credit grounds and are thus subject to WST. STBs are entities that are controlled by one or more government entities, such as states or territories, as outlined in Sections 3D(1) - 3D(5) of the Sales Tax (Exemptions and Classifications) Act.
The regulations establish a list of STBs that are deemed 'excluded STBs'. This means these entities cannot claim WST credits under transition credit grounds two and three in Schedule 1 to the Act. The purpose is to comply with the Statement of Policy Intent (SOPI) from the 1994 Premiers' Conference, which required the Commonwealth to exempt all STBs from WST and for the States and Territories to impose WST equivalent regimes on all STBs. Consequently, the Commonwealth amended the Act in 1995 to exempt all STBs from WST, but some States and Territories have sought to exclude certain STBs from claiming WST credits for administrative convenience.
Entities classified as 'excluded STBs' under these regulations are subject to WST and cannot claim WST credits under the transitional credit grounds specified. The Act does not necessitate State and Territory consent for these regulations, but all State Premiers and Territory Chief Ministers were consulted and have provided their written consent. These regulations came into effect on the date they were gazetted, ensuring that the outlined provisions are immediately applicable.
Failure to comply with these regulations could lead to civil or criminal consequences, depending on the severity of the breach. The maximum penalties for breaches are not explicitly stated in the explanatory statement, but penalties generally include fines and potential legal action under the Sales Tax Assessment Act 1992. The precise penalties would be determined based on the specific nature and extent of the breach.