EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 8
ISSUED BY THE AUTHORITY OF THE TREASURER
Introductory Note
These Statutory Rules are consequential on two changes in the Sales Tax (Exemptions and Classifications) Act 1935 that have been effected by the Sales Tax (Exemptions and Classifications) Amendment Act 1983 (Act No. 63 of 1983).
The first change made to the Exemptions and Classifications Act affected the exemption from sales tax for “aids to manufacture” as defined, broadly, goods used in the manufacturing process. In some instances the exemption had been effected by an exemption item that refers to the definition of “aids to manufacture” contained in the Act itself, while in one case a related exemption item operated to exempt goods that are defined in the Regulations as “aids to manufacture”. The definition in the Regulations is modelled on the definition in the Act.
By the Amending Act, exemption no longer applies for lubricants as “aids to manufacture” whether the operative definition is that contained in the Act or the Regulations. This has been effected, in the case of unregistered manufacturers by amending the definition in the Act of “aids to manufacture” to exclude lubricants and by defining in the Act the term “lubricants”. In the case of registered persons the relevant exemption items in the Act have been amended to exclude “lubricants” from their scope.
The amendment to the complementary definition of “aids to manufacture” in regulation 4 of the Sales Tax Regulations made under the Assessment Acts and the insertion in the Regulations of a complementary definition of the term “lubricants” are formal changes to make these definitions consistent with those in the Act.
The second change to the Exemptions and Classifications Act introduced a new exemption for interactive and broadcast videotex systems, broadcast teletext decoding devices and similar decoding devices whether or not of a kind used in or in connexion with television receivers, where the systems or devices are for use and not for sale by persons who are, or are taken to be, profoundly deaf. Such persons are described in the Amending Act, as “eligible persons”.
The exemption will be available only for eligible goods for use by eligible persons and it will be necessary for such persons to obtain a certificate from the Director-General of Health (or officer appointed by him) as to the extent of their hearing disability. Exemption will also be restricted to the purchase of one system or device for use by any one eligible person in any three year period unless the Commissioner of Taxation considers that special circumstances exist.
The exemption will apply to the eligible goods whether they are purchased separately or form part of other goods such as a television receiver. Where an eligible person purchases eligible goods or a television receiver incorporating eligible goods, from a person holding tax-free stocks of those goods (manufacturer or wholesale merchant) he will be able to obtain exemption by providing to the vendor an appropriately worded exemption certificate. However, the majority of eligible persons will ordinarily purchase the eligible goods from retailers who would have paid tax on those goods. While it is possible for exemption still to be effected where eligible goods are purchased from tax-paid stock, to ensure that all persons who purchase such goods in exempt circumstances gain exemption the Sales Tax Regulations have by these Statutory Rules been amended to enable the Commissioner of Taxation to make refunds of tax directly to such persons.
The amendment to the Regulations in the attached Statutory Rules will ensure that all eligible persons and persons who purchase eligible goods for use by eligible persons who have not previously had the use of tax-free eligible goods may gain exemption by enabling them in appropriate cases to seek refunds directly from the Commissioner of Taxation.
Regulation 1 provides for amending regulations 4 and 5 to come into operation on 24 August 1983, i.e. the day following the Budget. Amending regulation 3 comes into operation on the date of gazettal.
Regulation 2 provides that in the amending regulations the term “Principal Regulations” means the Sales Tax Regulations.
Regulation 3 amends regulation 4 of the Sales Tax Regulations by omitting from sub-regulation 4(1) paragraph (1) of the definition of “aids to manufacture” and substituting paragraphs (m) and (n). While new paragraph (m) maintains the exclusion of parts for any goods expressly excluded from this definition, new paragraph (n) excludes all lubricants from the definition.
A definition of the term “lubricants” has been inserted in sub-regulation 4(1) and complements the definition of that term inserted by the Amending Act in the First Schedule to the Exemptions and Classifications Act.
Regulation 4 amends regulation 58 of the Sales Tax Regulations by inserting new sub-regulation 58(7) to cover the circumstances in which the Commissioner may refund sales tax to the person who has paid the tax in relation to “eligible goods” for use by an “eligible person”.
An “eligible person” means a person certified to be, or to be taken to be, profoundly deaf by the Director-General of Health (or officer appointed by him) and “eligible goods” means interactive and broadcast videotex systems, broadcast teletext decoding devices and similar decoding devices whether or not of a kind used in or in connexion with television receivers for use and not for sale by profoundly deaf persons.
The new regulation authorises the Commissioner to refund to the person who has purchased the eligible goods for use by the eligible person:-
(a) where the eligible goods (such as a teletext decoder) were purchased separately - the amount of tax which is included in the price of those goods; or
(b) where the eligible goods were incorporated into other goods (such as teletext equipment incorporated into television receivers) - the amount of tax included in the value of the eligible goods.
Regulation 5 amends regulation 59 of the Sales Tax Regulations by inserting new paragraph 59(e) to limit the period during which a refund may be made under new sub-regulation 58(7) to three years from the date on which the eligible person purchased the eligible goods.