TAXATION RULING NO. ST 2144

ST 2144

SALES TAX : RACEHORSES BORN IN THE UNITED KINGDOM BUT RAISED IN AND IMPORTED FROM NEW ZEALAND

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FOI status:

PREAMBLE

Sub-item 111(1) in the First Schedule to the Sales Tax (Exemptions and Classifications) Act provides exemption from sales tax for goods, the produce or manufacture of New Zealand, being goods of the same class or kind as goods upon the sale value of which, if produced or manufactured in Australia, sales tax is not payable.

2. The definition of 'manufacture' in section 3 of Sales Tax Assessment Act (No 1) includes production so as to ensure that the sales tax legislation applies to goods derived from operations in primary production. A racehorse bred in Australia would be regarded as manufactured goods for the purposes of the sales tax law.

3. Sub-item 21(2) exempts primary products derived directly from operations carried on in Australia in, among other things, the maintenance of animals. Racehorses bred in Australia are exempt from sales tax under sub-item 21(1). From this it follows that racehorses bred in New Zealand are exempt under sub-item 111(1). Racehorses bred in the United Kingdom and imported into Australia for racing purposes are taxable.

FACTS

4. Certain racehorses born in the United Kingdom were exported to New Zealand as sucklings or weanlings where they were raised for two to three years before being imported into Australia for the purpose of racing them here.

RULING

5. The racehorses are the produce of the United Kingdom and not New Zealand. Accordingly the provisions of sub-item 111(1), First Schedule do not apply and the racehorses are taxable at the general rate.

COMMISSIONER OF TAXATION
18 July 1985

References

ATO references:
NO 84/6344-1

Date of effect:
Immediate

Date original memo issued:
4 Jan. 1985

Related Rulings/Determinations:

ST 2202

Subject References:
RACEHORSES

Legislative References:
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) ACT; ITEMS 21,
111, FIRST SCHEDULE