House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon. P.J. Keating, M.P.)

GENERAL OUTLINE

Sales Tax (Exemptions and Classifications) Amendment Bill 1986

This Bill will amend the Sales Tax (Exemptions and Classifications) Act 1935 -

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to increase from 10% to 20% the rate of sales tax on alcoholic wine and cider and other similar alcoholic beverages;

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to tax at the 10% rate presently exempt non-alcoholic beverages, namely, packaged flavoured milk, non-alcoholic wine and cider and similar beverages and Australian fruit juice products (broadly those containing not less than 25% by volume of Australian fruit juices);

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to increase from 20% to 30% the rate of sales tax on motor cars and station wagons (including four wheel drive vehicles) with wholesale prices (for sales tax purposes) above $19,892 - this amount is the wholesale price equivalent of the upper limit on which depreciation is allowable for income tax purposes on such vehicles; and

to correct, in association with the Sales Tax Laws Amendment Bill 1986, a range of anomalies and inconsistencies that presently exist in the sales tax law.

Sales Tax Laws Amendment Bill 1986

This Bill will amend the Sales Tax Assessment Acts (Nos. 1-9) 1930. the Sales Tax Assessment Act (No. 10) 1985 and the Sales Tax Regulations -

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to treat as "manufacture" for sales tax purposes, the copying of sounds, visual images or computer programs onto goods, e.g., tapes, discs, etc.;

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to ensure that the taxable sale value of goods containing sounds, visual images or computer software includes both the value of the goods and any consideration payable in relation to a right to use the sounds, visual images or computer software;

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to ensure that the production "in-house" of computer software for a person's own use is not subject to sales tax;

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to treat the construction of the container or shell of an in-ground swimming pool constructed in situ as the manufacture and sale of goods for sales tax purposes;

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to treat as "manufacture" for sales tax purposes the processing of exposed film to produce film negatives, transparencies or film strips; and

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to exempt from sales tax, goods imported into Australia on a temporary basis (for less than 12 months) for use in connection with an America's Cup yacht race held in Australia or the bicentennial celebrations.

Sales Tax Acts Amendment Bill 1986

This Bill will amend the Sales Tax Acts (Nos.1 to 9) 1930 and the Sales Tax Acts (Nos.11A and 11B) 1985 consequential upon the repeal, by the Sales Tax (Exemptions and Classifications) Amendment Bill 1986, of the Sixth Schedule to the Sales Tax (Exemptions and Classifications) Act 1935.