House of Representatives
Sales Tax Assessment Bill 1992
Sales Tax Imposition (Excise) Bill 1992
Sales Tax Imposition (Customs) Bill 1992
Sales Tax Imposition (General) Bill 1992
Sales Tax Amendment (Transitional) Bill 1992
Sales Tax Amendment (Transitional) Act 1992
Explanatory Memorandum
(Circulated by the authority of the Treasurer, the Hon. J.S. Dawkins, M.P.)Chapter 4
Glossary of Commonly Used Terms
Set out below are brief descriptions of commonly used terms in the new law. At the end of each description there is a reference to where that term is discussed in detail in the explanatory memorandum.
| AD1a: | Abbreviation for 'assessable dealing 1a', contained in Table 1 of the Sales Tax Assessment Bill 1992. [paragraph 7.6] |
| airport shop goods: | Goods for sale from inwards duty-free shops at Australian international airports. A removal of airport shop goods from a customs clearance area will be an assessable dealing. [paragraph 7.39] |
| always exempt goods: | Goods described in an exemption Item and which, because of that description, can never be the subject of a taxable dealing, regardless of how, or by whom, the goods are dealt with. All the requirements of the exemption must be satisfied at the time of the assessable dealing and exemption cannot be dependent on what happens later with the goods. [paragraph 8.7] |
| application to own use (AOU): | A dealing with goods which, if done with assessable goods when they are in Australia, causes them to become Australian-used goods. Includes the granting of a lease, a gift and the use of goods in a manufacturing, construction or repair process as raw materials. An AOU can be an assessable dealing if certain other conditions are satisfied. [paragraph 5.3] |
| assessable dealing: | A dealing with assessable goods which will be taxable unless an exemption applies. Broadly, there are 5 kinds of dealing: sale, application to own use, delivery of customer's materials goods, local entry and removal from a customs clearance area. [paragraph 7.2] |
| assessable goods: | The class of goods which can be taxable if they are the subject of an assessable dealing and no exemption applies. [paragraph 6.3] |
| Australian goods: | Goods manufactured in Australia, but not including certain goods sent out of Australia and subsequently brought back into the country. A category of assessable goods (provided they have not been applied to own use in Australia). [paragraph 6.3] |
| Australian-used goods: | Goods that have been applied to own use in Australia. A class of goods that are not assessable goods and, consequently, not taxable. [paragraph 6.4] |
| borne tax: | A person has borne tax on goods if the person has become liable to pay tax on an assessable dealing with the goods, or has obtained goods for a price that included tax paid by another person. Relevant to many of the credit grounds. [paragraph 5.11] |
| business input: | A term used in the explanatory memorandum, but not in the new law. It refers to goods (including raw materials and equipment) for which exemption is available under exemptions for business or industry contained in Chapter 1 of Schedule 1 to the Sales Tax (Exemptions and Classifications) Bill 1992. [paragraph 13.3] |
| Commissioner: | The Commissioner of Taxation. |
| container: | Packaging for goods. Packing of goods in a container will be an application to own use of the container ( a packing AOU. . In certain circumstances a packing AOU will be an assessable dealing. [paragraph 20.4] |
| CR1: | Abbreviation for 'credit ground 1', contained in Table 3 of the Sales Tax Assessment Bill 1992. |
| credit: | Credits for tax paid by a person, or for an amount of tax included in the acquisition price of goods, are available in certain circumstances. Credits will most usually be available to prevent the double taxation of goods, to reimburse an overpayment of tax, or to give effect to an exemption. Credits can take two forms: a direct payment to the person by the Commissioner or they can be claimed as a deduction on returns. [paragraph 11.2] |
| customer's materials goods: | goods manufactured for a customer from materials supplied to the manufacturer by the customer - see delivery of customer's materials goods. [paragraph 7.29] |
| customs dealing: | A term that covers 3 assessable dealings with goods at the customs barrier: A local entry of imported goods or a removal of Australian or imported airport shop goods from a customs clearance area. [paragraph 7.33] |
| delivery of customer's materials goods: | The delivery of goods, by their manufacturer, to the customer for whom they were manufactured and who has supplied some of the materials used in their manufacture. An assessable dealing. [paragraph 7.30] |
| eligible long-term lease: | A lease of goods that is for a period at least as long as the statutory period and the lessee intends to use the goods for an exempt purpose for the duration of the statutory period. An eligible long-term lease of assessable goods will be exempt from tax. [paragraph 8.14] |
| exempt part of taxable value: | An amount that is deducted from the taxable value of goods before applying the relevant rate to determine the amount of liability. [paragraph 10.1] |
| exemption: | An assessable dealing will not be taxable if one of the general exemptions applies. Broadly, there are six general exemptions, including that an exemption Item is satisfied in relation to the goods. [paragraph 8.3] |
| exemption declaration: | A declaration given by an unregistered person in respect of goods to the effect that the person intends to use the goods to satisfy an exemption Item. The giving of an exemption declaration will be a quote, and will relieve an assessable dealing from tax. [paragraphs 8.18, 14.9, 15.17] |
| exemption item: | An item in Schedule 1 to the Sales Tax (Exemptions and Classifications) Bill 1992. [paragraphs 8.4-8.8] |
| exemption [R] item: | An item in schedule 1 to the Sales Tax (Exemptions and Classifications) Bill 1992 that is available only to taxpayers who are registered. Exemption [R] items are all business inputs exemptions. [paragraph 13.14] |
| external costs sale or application to own use: | An
assessable dealing.
A retail sale or application to own use of Australian goods by a seller/applier who has:
|
| goods: | Any form of tangible personal property, but does not include second-hand property manufactured from Australian-used goods. [paragraph 6.7] |
| imported goods: | Goods imported into Australia, including goods that were manufactured in Australia and subsequently exported. A category of assessable goods (provided they have not been applied to own use in Australia). [paragraph 6.3] |
| indirect marketing sale: | A retail sale of goods through an agent or from premises used by a person, other than the principal, mainly for making retail sales. Does not apply if the principal is the manufacturer of the goods. An assessable dealing. [paragraph 7.20] |
| 'lease' and 'lease AOU': | A lease will include a hire-purchase agreement. The granting of a lease will be an AOU and, if certain other conditions are satisfied, will also be an assessable dealing. [paragraph 7.26] |
| local entry: | A dealing with imported goods that frees them from Customs control. The dealing generally occurs at the same time as an entry for home consumption under the Customs Act 1901. An assessable dealing. [paragraph 7.33] |
| manufacture: | A key concept of the sales tax law, relevant to determining what are assessable goods and assessable dealings. Defined broadly to have its ordinary meaning, modified by several inclusions and exclusions. [paragraph 5.13] |
| obtained under quote: | A reference to obtaining goods tax-free by quoting a registration number or an exemption declaration. [paragraph 5.19] |
| packing AOU: | Causing goods to become a container for other goods. A packing AOU will be an assessable dealing if certain conditions are satisfied. [paragraphs 5.5, 20.10] |
| quote: | A mechanism that prevents sales tax being payable on an assessable dealing (other than an application to own use). Applies to quotation of a registration number by a registered person (usually to obtain trading stock or business inputs tax-free) or quotation of an exemption declaration by an unregistered person (to take advantage of an exemption Item). [paragraph 14.3] |
| registration: | Registration by the Commissioner. A pre-condition to quoting a registration number. Broadly, persons who regularly engage in assessable dealings will be entitled to be registered so that they can quote their registration number to acquire their business inputs and wholesale selling stock tax-free. [paragraph 13.3] |
| registration number: | The number allocated to a registered person by the Commissioner. A registered person can quote their registration number to obtain goods tax-free. [paragraph 13.2] |
| removal from customs clearance area: | A removal of goods from a place set aside by customs officers for questioning passengers disembarking from an aircraft or for examining their luggage. Applies only to goods purchased from an inwards duty-free shop at an Australian international airport. An assessable dealing. [paragraph 7.42] |
| retail sale: | Any sale of goods that is not a wholesale sale. Some retail sales will be assessable dealings, if certain conditions are satisfied. [paragraphs 7.4, 7.8] |
| sale of goods: | Essential element of some assessable dealings. Will include a barter or exchange of goods for other goods or services. [paragraph 7.4] |
| small business exemption: | An exception to liability on an assessable dealing and a mechanism for excluding small taxpayers from the sales tax law. In general terms, the exemption will apply to persons who have a tax liability of $10,000 or less over a 12 month period. The exemption will not apply to all assessable dealings. [paragraph 8.22] |
| statutory period: | The minimum period for which goods must be used by a person in order for an exemption Item to be satisfied. The statutory period is 2 years commencing at the time that goods are applied to own use. If goods have a shorter working life, the statutory period will be reduced to that shorter period. [paragraph 8.10] |
| tax-advantaged computer program: | A computer program that will not be taxed - instead tax will be payable only on the carrying medium. Broadly, all computer programs will be 'tax-advantaged' except if the carrying medium is a microchip. [paragraphs 22.10-22.14] |
| tax borne: | see borne tax. |
| taxable dealing: | An assessable dealing for which no exemption is available. [paragraph 7.2] |
| taxable value: | The value attributed to goods for sales tax purposes. [paragraph 9.1] |
| untaxed goods sale or AOU: | A retail sale or AOU with goods that have not previously passed a taxing point. The sale or AOU will be an assessable dealing, if certain other conditions are satisfied. [paragraph 7.27] |
| wholesale sale : | Any sale of goods to a person who purchases them for the purpose of resale, subject to certain exclusions. A key concept of the sales tax law. Most wholesale sales of assessable goods will be assessable dealings. [paragraph 5.21] |