Australia’s Assistant Treasurer, Nick Sherry, has released for public consultation the first set of legislation aimed at making the goods and services tax (GST) law more transparent and reducing compliance costs for businesses.
The draft Exposure Bill includes the following GST administration measures:
The GST Act, Fuel Tax Act and Tax Administration Act will be modified to provide that a taxpayer will cease to be entitled to an input tax credit or fuel tax credit if the credit has not been claimed within four years. That four-year period starts from the date to which it would be attributable under the basic attribution rules.
The GST Act and Wine Equalisation Tax Act will be amended to allow residents of Australia’s External Territories to claim refunds of GST, or GST and wine equalisation tax under the tourist refund scheme. Claims can be made if Australian External Territory residents can show proof that the goods are taken as ‘accompanied baggage’ and have been exported to their External Territory within 60 days after the day on which the goods were acquired.
The range of entities entitled to act as a principal for GST accounting purposes will be increased. This amendment allows those acting for a principal who are not agents in the common law sense to access the simplified accounting procedure in the GST Act, subject broadly to the principal and intermediary agreeing that the intermediary will take responsibility for using these accounting procedures in relation to certain transactions.
The exposure draft amends the GST Act to clarify how the gambling operator’s margin is calculated where the bets made by the operator are GST-free. The GST currently applies to gambling bets on a global rather than an individual basis. This reflects the difficulty of applying GST to every gambling transaction and allowing input tax credits for the prize money paid out on each bet. Instead, GST is applied to the gambling operator’s margin, calculated to be one-eleventh of the ‘total amount wagered’ less the ‘total monetary prizes’ that the gambling operator is liable to pay.
Amounts that the gambling operator is liable to pay out on bets that are GST-free will be explicitly excluded from total monetary prizes amounts. This will mean that the prize money that the gambling operator is liable to pay to entities outside Australia will be excluded from total monetary prizes (because bets made to entities outside Australia are GST-free).
The exposure draft also modifies the GST Act, the Fuel Tax Act and the Luxury Car Tax Act so that an overpaid refund is treated as an amount due and payable from the date of the overpayment.
"I urge anyone with an interest in improving the administration of the GST to look at the proposed legislation and provide your views," Nick Sherry said. "The input of stakeholders plays a central role in designing law changes and the government is committed to consulting before finalising the legislation."
The measures represent the first set of exposure draft legislation to implement the government's reform of GST administration. Further tranches of exposure drafts will be released for consultation in coming months. Consultation closes on October 27, 2009.
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