INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 57AK   SPECIAL DEPRECIATION ON PROPERTY USED FOR BASIC IRON OR STEEL PRODUCTION  

57AK(1A)   [Commercial debt forgiveness]  

This section has effect subject to Division 245 of Schedule 2C .

57AK(1)   [Application of section]  

Subject to subsections (3) and (8), this section applies to a unit of property in relation to a taxpayer in relation to a year of income if:

(a) depreciation is allowable to the taxpayer under section 54 in respect of the unit of property in relation to the year of income;

(b) the unit of property:

(i) was acquired by the taxpayer under a contract entered into after 18 August 1981 and before 20 July 1982; or

(ii) was constructed by the taxpayer and commenced to be constructed after 18 August 1981 and before 20 July 1982;

(c) the unit of property was first used, or installed ready for use and held in reserve, before 1 July 1992; and

(d) the unit of property is:

(i) property that, during the relevant period in the year of income when it was owned by the taxpayer, was, primarily and principally, used, or installed ready for use and held in reserve for use, by a producer of basic iron or steel products, directly in basic iron or steel production or related activities; or

(ii) a wharf, or plant located on a wharf, being a wharf or plant that, during the relevant period in the year of income when it was owned by the taxpayer:

(A) was, primarily and principally, used or installed ready for use and held in reserve, by a producer of basic iron or steel products, directly in connection with basic iron or steel production or related activities; and

(B) was, at all times when it was used, or installed ready for use and held in reserve, in connection with that basic iron or steel production or those related activities, situated within premises on which that basic iron or steel production takes place or within premises contiguous to those premises.

57AK(2)   [Meaning of relevant period in year of income]  

A reference in paragraph (1)(d), in relation to property owned by a taxpayer during a year of income, to the relevant period in the year of income is a reference to the period in that year of income when:

(a) the property was owned by the taxpayer; and

(b) the property was used, or installed ready for use and held in reserve, for the purpose of producing assessable income.

57AK(3)   [Exclusions]  

This section does not apply in relation to a unit of property:

(a) that is a road vehicle, wherever or however used, of a kind ordinarily used for the transport of persons or the delivery of goods (including the delivery of goods of a particular kind); or

(b) that is used for the transport of persons or the delivery of goods between premises on which basic iron or steel production takes place.

57AK(4)   [Depreciation allowable]  

Notwithstanding anything contained in sections 55 and 56 , but subject to subsections 56(2) and (3) , the depreciation allowable under this Act in respect of a unit of property to which this section applies shall be ascertained in accordance with this section.

57AK(5)   [Depreciation rate]  

The depreciation allowable to a taxpayer under this Act in relation to a year of income in respect of a unit of property to which this section applies in relation to the year of income is -

(a) where, but for this section, the annual depreciation percentage fixed under section 55 , as in force immediately before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1992, would be 20% or less - 20% of the cost of the unit; and

(b) in any other case - 33 ⅓ % of the cost of the unit.

57AK(6)   [Application of other provisions]  

Subsections 56(1A), (1B), (1C) and (4) apply for the purposes of this section in like manner as those subsections apply for the purposes of section 56 .

57AK(7)   [Reference to sections]  

Subsection 330-590(3) of the Income Tax Assessment Act 1997 applies in relation to a unit of property to which this section applies as if a reference in that subsection to section 56 included a reference to this section.

57AK(8)   [Election that section not apply]  

A taxpayer may elect, for the purpose of the calculation of depreciation allowable as a deduction to him under this Act, that this section shall not apply in relation to a unit of property to which this section would otherwise apply and, where an election is so made, this section does not apply in relation to that unit of property in relation to the taxpayer in relation to any year of income.

57AK(9)   [Time of election]  

An election referred to in subsection (8) in respect of a unit of property must be made on or before the date of lodgment of the return of income of the taxpayer for the first year of income in which depreciation calculated in accordance with this section would, but for subsection (8), be allowable to the taxpayer in respect of the unit of property, or before such later date as the Commissioner allows.

57AK(10)   [Rearrangement of pre-19 August 1981 contract]  

Where the Commissioner is satisfied that:

(a) on or before 18 August 1981 a taxpayer:

(i) entered into a contract or arrangement for the acquisition of a unit of property (in this subsection referred to as the ``original unit'' ); or

(ii) commenced the construction of a unit of property (in this subsection also referred to as the ``original unit'' );

(b) after that date:

(i) the taxpayer entered into a contract (whether with the same person or another person in a case to which subparagraph (a)(i) applies) for the acquisition (whether with or without the acquisition of other property) of the original unit or of another unit of property (in this subsection referred to as the ``substituted unit'' ) identical with, or having a purpose similar to that of, the original unit and intended by the taxpayer to be in lieu of the original unit; or

(ii) the taxpayer commenced the construction of a unit of property (in this subsection also referred to as the ``substituted unit'' ) identical with, or having a purpose similar to that of, the original unit and intended by the taxpayer to be in lieu of the original unit; and

(c) the taxpayer entered into the contract for the acquisition of the original unit or substituted unit, or commenced the construction of the substituted unit, for the purpose, or for purposes that included the purpose, of obtaining a deduction for depreciation ascertained in accordance with this section,

the Commissioner may refuse to allow a deduction for depreciation ascertained in accordance with this section:

(d) in a case to which subparagraph (b)(i) applies - in relation to the original unit or the substituted unit, as the case may be; or

(e) in a case to which subparagraph (b)(ii) applies - in relation to the substituted unit.

57AK(11)   [Reference to unit of property]  

A reference in subsection (10) to a unit of property shall be read as including a reference to a portion of a unit of property.

57AK(12)   [Acquisition includes construction for taxpayer]  

A reference in this section to the acquisition by a taxpayer of property shall be read as including a reference to the construction of the property for the taxpayer by another person or persons.

57AK(13)   [Definitions]  

In this section:

"basic iron or steel production"
means any part of the operations involved in the production of basic iron or steel products, other than:

(a) in a case where an iron-making furnace and a steel-making furnace are used in that production - operations that take place before the iron-making furnace is used in that production;

(b) in a case where an iron-making furnace is used in that production but a steel-making furnace is not used - operations that take place before the iron-making furnace is used in that production; and

(c) in a case where a steel-making furnace is used in that production but an iron-making furnace is not used - operations that take place before the steel-making furnace is used in that production;

"basic iron or steel products"
means -

(a) goods that, if imported, would fall within item 73.01, 73.06, 73.07, 73.08, 73.09, 73.11 or 73.16 of Schedule 1 to the Customs Tariff Act 1966 , as in force on 18 August 1981;

(b) goods that, if imported, would fall within item 73.10 of that Schedule, other than goods that, if imported, would fall within sub-item 73.10.1 of that Schedule;

(c) goods that, if imported, would fall within item 73.12 or 73.13 of that Schedule, being goods that are -

(i) hot-rolled; and

(ii) unworked or simply polished;

(d) low alloy or high carbon steel goods that, if imported, would fall within item 73.15 of that Schedule, being goods that are in a form mentioned in item 73.06, 73.07, 73.08, 73.09 or 73.11 of that Schedule;

(e) low alloy or high carbon steel goods that, if imported, would fall within item 73.15 of that Schedule (other than goods that, if imported, would fall within paragraph (a) of sub-item 73.15.2 of that Schedule), being goods that are in a form mentioned in item 73.10 of that Schedule;

(f) low alloy or high carbon steel goods that, if imported, would fall within item 73.15 of that Schedule, being goods that are in a form mentioned in item 73.12 or 73.13 of that Schedule and are -

(i) hot-rolled; and

(ii) unworked or simply polished; or

(g) goods, being sponge iron that, if imported, would fall within item 73.05 of that Schedule;

"goods"
includes electric current, hydraulic power, steam, compressed air, a liquid, a gas or a substance;

"iron-making furnace"
includes a direct reduction furnace or kiln;

"plant"
means plant or articles within the meaning of section 54 ;

"related activities"
means any of the following activities that are carried on by a producer of basic iron or steel products within premises in which the basic iron or steel production from which those products result takes place:

(a) the production, preparation or treatment of goods for use primarily and principally, and directly, in basic iron or steel production;

(b) the production or maintenance of plant, or components of plant, for use primarily and principally, and directly, in -

(i) basic iron or steel production; or

(ii) activities that are related activities by virtue of this paragraph or any of the other paragraphs of this definition;

(c) the trimming, cutting, packing, placing in containers, labelling, transport or storage of -

(i) basic iron or steel products;

(ii) goods referred to in paragraph (a) of this definition; or

(iii) plant, or components of plant, referred to in paragraph (b) of this definition;

(d) the disposal of waste substances resulting from basic iron or steel production or activities that are related activities by virtue of paragraph (a), (b), (c) or (e) of this definition;

(e) the training of apprentices in skills of a kind used in basic iron or steel production or in activities that are related activities by virtue of paragraph (a), (b), (c) or (d) of this definition.

57AK(14)   [Amendments to Customs Tariff Act]  

In determining whether goods fall within the definition of basic iron or steel products in subsection (13), no regard shall be had to any amendment of the Customs Tariff Act 1966 made by an Act that received or receives the Royal Assent after 18 August 1981.