RCTI 2016/26 - Explanatory statement
COMMONWEALTH OF AUSTRALIA
A New Tax System (Goods And Services Tax) Act 1999
Explanatory Statement
General Outline of Instrument1. This determination is made under subsection 29-70(3) of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).
2. The determination allows a recipient of a taxable supply of pharmacy or medical centre data to issue recipient created tax invoices (RCTIs) to the supplier provided the recipient determines the value of the taxable supply and the requirements of the determination are satisfied.
3. The determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Date of effect4. The determination commences on the day after registration.
What is this determination about5. Generally, tax invoices are issued by the entity that makes the supply under the GST Act.
6. The purpose of this determination is to outline a class of tax invoices that the Commissioner has determined may be issued by recipients of taxable supplies (called RCTIs). The Commissioner makes the determination by taking account a number of factors including the type of industry, the taxable supply, the GST turnover of the recipient and certain requirements for issuing RCTIs. The factors reflect a balance between facilitating the practical use of RCTIs by businesses and maintaining the integrity of the GST system.
7. In accordance with this determination, a recipient of a taxable supply of data obtained from a pharmacist or medical centre, may issue a RCTI for the supply if the recipient:
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- verifies and validates the retrieved data before accepting the data as suitable for collection;
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- establishes the quantum of data retrieved;
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- establishes the value of the taxable supply based upon that quantum; and
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- satisfies the requirements set out in Clause 7 of the determination.
8. The effect of this determination is to allow a recipient of a taxable supply of pharmacy and medical centre data to issue a RCTI for the supply, provided the requirements of the determination are satisfied. As the recipient has the information to establish the value of the supply, issuing RCTIs for such supplies will simplifying payment and invoicing processes.
9. This determination is substantially the same as the previous determination that it replaces. Therefore, a recipient who satisfied the previous determination will satisfy this determination and can continue to issue RCTIs under this determination.
10. Compliance cost impact: minor- there will be no or minimal impacts for both implementation and ongoing compliance costs. The determination is minor or machinery in nature.
Background11. This determination replaces A New Tax System (Goods and Services Tax) Act 1999 Classes of Recipient Created Tax Invoice Determination (No. 3) 2003.The replaced instrument is repealed on commencement of this determination.
Consulation12. Section 18 of the Legislative Instruments Act 2003 specifically provides for circumstances where consultation may not be necessary or appropriate. One of those circumstances is where the instrument is considered minor or machinery in nature, and does not substantially change the law.
13. In this case, no further consultation has been undertaken in the development of this determination because there is no substantive change from the previous determination and it is considered minor or machinery in nature.
Statement of Compatibility with Human Rights
This statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Goods and Services Tax: Recipient Created Tax Invoice Determination (No. 26) 2016 for Electronic Pharmacy and Medical Centre DataThis Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Legislative InstrumentGenerally, tax invoices are issued by a supplier under the basic rules for GST. This Legislative Instrument allows a recipient of a taxable supply of pharmacy and medical centre data to issue the tax invoice (called recipient created tax invoice) to the suppliers provided that they determine the value of the taxable supply as set out in the Legislative Instrument and the other requirements of the Instrument are satisfied. This will simplify the invoicing and payment processes.
Human rights implicationsThis Instrument does not engage any of the applicable rights or freedoms. It allows for the streamlining of invoicing and payment practices.
ConclusionThis Instrument is compatible with human rights as it does not raise any human rights issues.
24 February 2016
Timothy Dyce
Deputy Commissioner of Taxation
Legislative References:
A New Tax System (Goods And Services Tax) Act 1999
the Act
Legislative Instruments Act 2003
the Act
RCTI 2016/26
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