Sales Tax (Exemptions and Classifications) Act 1942

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SALES TAX (EXEMPTIONS AND CLASSIFICATIONS).

No. 6 of 1942.

An Act to amend the Sales Tax (Exemptions and Classifications) Act 1935-1941.

[Assented to 18th May, 1942.]

BE it enacted by the King’s Most Excellent Majesty. the Senate, and the. House of Representatives of the Commonwealth of Australia, as follows:—

Short title and citation.

1.—(1.) This Act may be cited as the Sales Tax (Exemptions and Classifications) Act 1942.

(2.) The Sales Tax (Exemptions and Classifications) Act 1935-1941 is in this Act referred to as the Principal Act.

(3.) The Principal Act. as amended by this Act, may be cited as the Salt’s Tax (Exemptions and Classifications) Act 1935-1942.

Commencement.

2. This Act shall be deemed to have come into operation on the first day of May, One thousand nine hundred and forty-two.

Amendment of First Schedule.

3. The First Schedule to the Principal Act is amended—

(a) by inserting after Item 20 the following Division:—

“DIVISION II.—FISHING AND PEARLING MACHINERY AND EQUIPMENT.

20a. Fishing equipment (and parts therefor), viz.:—	Nos. 1 to 9 ”;
(1) Boats (including oars, sails, life-belts, life-boats and other similar accessories) for use in the fishing industry
(2) Crayfish pots
(3) Engines for use in the fishing industry
(4) Nets and netting for fishing, and cotton, hemp twine and other materials for the repair thereof
(5) Lines, hooks, floats and sinkers for use in the fishing industry

(b) by inserting in Division VII., before Item 39, the following Item:—

“38. Drugs and medicines (including patent and proprietary medicines) used in the prevention, cure or treatment of sickness or disease in human beings, and in the compounding or preparation of such drugs or medicines, but not including—	Nos. 1 to 9 ”;
(i) Drugs and preparations put up and sold for the purposes of photography;
(ii) Toilet preparations (including soaps, tooth pastes, cosmetics, pomades, perfumes and hair lotions);
(iii) Dyes, methylated spirits, naphthaline, turpentine, linseed oil, bicarbonate of soda, carbonate of soda, cream of tartar, caustic soda, sodium chloride, alum, borax, glycerine, petroleum jelly, lead salts, zinc salts, citric acid, chromic acid, formic acid, hydrochloric acid, hydrofluoric acid, nitric acid, pyrogallic acid, stearic acid, sulphuric acid and tartaric acid; or
(iv) medicated confectionery

“40. Rectified spirits for use in making medicines and essences	Nos. 1 to 9
41. Surgical instruments and appliances, n.e.i., (and parts therefor) and surgical materials, n.e.i., being instruments, appliances or materials which are of a kind—
(i) sold exclusively or principally by manufacturers or distributors of such instruments, appliances and materials; and
(ii) used exclusively or principally in hospitals or by medical practitioners, but not including the following articles: —
Air cushions; atomizers
Bed rests; bed tables; brackets
Chairs, bedside or commode
Depilatory forceps; dispensing plant; drip feed lamps	Nos. 1 to 9
Electric urns ; enemas ; eye-baths, eye droppers, eye shells and eye shades
Kettles
Linen cupboards
Magnifying lenses; pleasure glasses; medicament bottles and glasses ; microscopes which are not for use in hospitals or by medical practitioners or medical students
Name plates; nasal douches: nipple aerators
Restraint apparatus, viz., anklets, wristlets, straps and sheets; rubber finger stalls; rubber surgical syringes

Scales, baby weighing and personal; sprays, disinfectant; staining bottles; surgeons’, nurses’ and attendants’ aprons, gowns and overalls; surgery and gate lamps	Nos. 1 to 9:”;
Towel cupboards, hangers and stands
Ward cupboards, lockers and chairs; wash basins and stands

(d) by inserting in Item 42, after sub-item (1), the following sub-items:—

“(2) Absorbent cotton wool, gauzes and lint

(3) Adhesive plaster and strapping

(4) Articles designed for the alleviation of deafness, but not including articles for public use in buildings or other places “;

(e) by inserting in Item 42, after sub-items (6), (8), (10), and (12) respectively the following sub-items:—

“(7) Bandages and bandage winders

(9) Elastic bandages, knee caps and stockings

(11) Spectacles and eye-glasses (and cases and wipers therefor), but not including goggles, sun glasses, field glasses or similar optical goods

(13) Surgical, medical and first-aid outfits”;

(f) by inserting after Item 42 the following Items:—

“43.—(1) Surgical X-ray apparatus and accessories (and parts therefor), but not including accessories of a kind ordinarily used for other purposes	Nos. 1 to 9
(2)Diathermy apparatus and appliances, and parts therefor	Nos. 1 to 9
44. Oxygen, carbogen, nitrous oxide, ethylene and other medical gases, and any mixture of such gases, for use in.’ hospitals or by medical practitioners or dentists	Nos. 1 to 9
45. Dental instruments and appliances (and parts therefor) and materials, which are of a kind exclusively or principally sold by manufacturers or distributors of such instruments, appliances and materials for use by dentists or dental mechanics, and dentures, gold, alloys, amalgams, porcelain, gold inlays, bridges, crowns and other articles for similar dental use, which are to be disposed of (whether in an altered form or condition or not) to patients in the course of dental treatment	Nos. 1 to 9”;

(g) by inserting at the end of Item 48 the following sub-items:—

“(7.) Methylated spirits covered by Item 2 (n) (1) of the Excise Tariff 1921-1939	Nos. 1 to 4 and 9.
(8) Substances not covered by any other sub-item of this Item for use as fuel for internal combustion engines	Nos. 1 to 4 and 9.”;

(h) by inserting after Item 62 the following Item:—

“63. Goods for use in universities and schools, viz.:-	Nos. 1 to 9”;
(1) Scientific instruments and scientific apparatus (and parts therefor), and materials for use therewith
(2) Charts, wall sheets and diagrams
(3) Examination papers, and direction sheets and envelopes for use therewith

(i) by inserting after Item 74c the following Item:—

“74ca. Clothing, badges, accoutrements and kit, n.e.i., for use as uniforms or parts of uniforms by members in Australia of any allied or other foreign force serving in association with His Majesty’s armed forces, including military pattern tunic shirts but not including other shirts, underclothing, collars, ties, studs, sleeve links, braces, socks, gloves, scarves, bathing costumes or trunks, jerseys, sweaters, pullovers, pyjamas and goods similar to or used in substitution for the goods specified in the above-mentioned exceptions

Nos. 1 to 9”;

(j) by adding at the end of paragraph (i) of Item 81a the words “or of members in Australia of any allied or other foreign force serving in association with His Majesty’s armed forces”;

(k) by inserting in Division XV., before Item 106, the following Item:—

“105. (1) Axes and tomahawks..............................	Nos. 1 to 9
(2) Tool handles of wood..................................	Nos. 1 to 9’:

(l) by inserting after Item 116 the following Item:—

“117. Saddlery and harness (and parts therefor), trace chains (complete), collar check, kersey and saddle serge

Nos. 1 to 9”;

and

(m) by omitting from Item 122 the words “and barbed wire” and inserting in their stead the words “,barbed wire and iron or steel wire of gauges 6 to 14”.

Repeal of Second Schedule.

4. The Second Schedule to the Principal Act is repealed.

Amendment of Third Schedule.

5. The Third Schedule to the Principal Act is amended by omitting from sub-item (5.) of Item 13 the words ‘“item 20 of the Second Schedule” and inserting in their stead the words “item 43 of the First Schedule”.

Operation of amendments.

6. The amendments effected by paragraphs (g), (i) and (j) of section three of this Act shall apply to all transactions, acts or operations performed or entered into on or after the first day of January, One thousand nine hundred and forty-two, the first day of December, One thousand nine, hundred and forty-one and the first day of March, One thousand nine hundred and forty-two respectively.

Overview

The Sales Tax (Exemptions and Classifications) Act 1942, enacted by the King's Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, amends the Sales Tax (Exemptions and Classifications) Act 1935-1941 to address specific economic and wartime needs by modifying the classification and exemptions of goods subject to sales tax. This Act introduces a series of amendments to the First Schedule, expanding the categories of exempt items, particularly in sectors such as fishing, pearling, and medical supplies, as well as educational and military-related goods. The policy objective appears to be to alleviate the financial burden on essential services and industries during wartime by exempting certain goods from sales tax. The Act came into operation on 1 May 1942, with certain amendments retroactively applying to transactions from 1 January 1942, 1 December 1941, and 1 March 1942 respectively. The Second Schedule to the Principal Act was repealed, and the Third Schedule was amended to reflect the new classifications. This legislative change aimed to provide clarity and support for industries critical to the war effort and public health, ensuring that these sectors could operate more efficiently under the altered tax framework.

Scope and Application

The Sales Tax (Exemptions and Classifications) Act 1942 amends the Sales Tax (Exemptions and Classifications) Act 1935-1941 to introduce new exemptions and classifications for sales tax, effective from 1 May 1942. This Act applies to a wide range of persons and entities involved in sales transactions within Australia, including individuals, businesses, and various industries. Notably, the Act provides exemptions for specific fishing and pearling machinery and equipment, drugs and medicines, surgical instruments and appliances, medical gases, and various educational and military goods. The scope of the Act is broad, impacting a variety of sectors such as fishing, healthcare, education, and defence. The geographic reach of this Act is nationwide, applying across the Commonwealth of Australia. However, certain goods and services remain subject to sales tax, including those explicitly excluded from the exemptions, such as certain photographic drugs, toilet preparations, and optical goods like goggles and sun glasses. The Act also allows for further specification and regulation through subordinate instruments, enabling the detailed administration and enforcement of sales tax exemptions and classifications.

Key Provisions

The Sales Tax (Exemptions and Classifications) Act 1942 (sections 1-6) amends the Sales Tax (Exemptions and Classifications) Act 1935-1941, referring to the amended Act as the Sales Tax (Exemptions and Classifications) Act 1935-1942. The amendments to the Act come into effect on 1 May 1942. The First Schedule of the Principal Act is amended by introducing new divisions and items to classify various goods and services that are either exempt from sales tax or subject to specific tax classifications. For instance, the new Division II adds fishing and pearling machinery and equipment (section 3(a)) such as boats, crayfish pots, and fishing nets, while Division VII introduces exemptions for drugs and medicines used in the treatment of human diseases (section 3(b)). Additionally, surgical instruments and appliances used exclusively in hospitals or by medical practitioners are classified (section 3(c)), and further sub-items are added to Item 42 to include absorbent cotton wool, gauzes, lint, adhesive plaster, and other medical supplies (section 3(d) and (e)). The Act imposes obligations on entities and individuals engaged in the sale of goods and services to correctly classify and exempt items as per the updated First Schedule. For example, businesses dealing in fishing equipment or medical supplies must ensure these items are appropriately categorised and exempt from sales tax. The Act also requires accurate record-keeping and compliance with the new classifications to avoid discrepancies and potential audits by tax authorities. Breach of the Act's provisions results in civil consequences. Any entity or individual found to have incorrectly classified goods or failed to exempt eligible items from sales tax may face penalties. The Act does not explicitly state maximum penalties but implies that non-compliance could lead to fines, back payment of taxes owed, and potential legal action to recover unpaid taxes.

Area of Law: Taxation Law
Instrument: Act
Concepts: Commencement Provisions; Amendment of First Schedule; Repeal of Second Schedule

Interactions

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.

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