Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 5 - Reduction of sales tax rates
Overview
5.1 Without this provision, some goods currently subject to the 32% rate of WST are likely to fall considerably in price after the GST is introduced.
5.2 To spread the price fall, the rate of WST will be reduced to the Schedule 4 rate (ST(E & C)Act) of 22%, prior to the start of GST. [Item 2, Schedule 1 of the Transition Bill]
Items 4 to 14 of Schedule 5 of the ST(E & C)Act
5.3 Effective from the date of Royal Assent of the GST Act, the rate of WST applicable to goods covered by items 4 to 14 of the ST(E & C)Act will be reduced from the current Schedule 5 rate of 32%, to 22%. This is effected by repealing the items, such that the Schedule 4 rate of 22% applies.
5.4 The goods affected include televisions, video recorders, radios, watches and cameras.
5.5 Items 2 to 3, namely jewellery and furs, remain at the rate of 32%.
5.6 This measure is intended to avoid consumers holding off on purchases, by spreading the impact of the price change occurring on the introduction of the GST.
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