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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) AMENDMENT REGULATIONS 2003 (NO. 3) 2003 NO. 190
STATUTORY RULES 2003 No. 190
Issued by authority of the Minister for Revenue and Assistant Treasurer
A New Tax System (Goods and Services Tax) Act 1999
A New Tax System (Goods and Services Tax) Amendment Regulations 2003 (No. 3)
Section 177-15 of the A New Tax System (Goods and Services Tax) Act 1999 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The A New Tax System (Goods and Services Tax) Regulations 1999 is amended to:
* specify each scheme or arrangement that is a compulsory third party (CTP) scheme and remove those schemes from the list of statutory compensation schemes, for the purposes of the goods and services tax (GST) insurance provisions; and
* specify each payment or supply that is a CTP ancillary payment or supply for the purposes of the GST insurance provisions.
Compulsory third party schemes
Each State and Territory has a CTP motor accident injury insurance or compensation scheme that operates in conjunction with motor vehicle registration processes. CTP schemes operate to ensure that people injured in motor vehicle accidents are able to obtain compensation and other benefits as a result of the injuries they have suffered.
The general GST insurance provisions in the Act did not apply to CTP transactions as originally intended. The Act has been amended to introduce new provisions to recognise that there are CTP transactions that occur in circumstances that do not apply to general insurance or other statutory compensation scheme transactions. It is therefore necessary to identify those CTP schemes to which the amended GST insurance provisions apply. It is no longer necessary for the CTP schemes to be treated as statutory compensation schemes for the purposes of the application of the general GST insurance provisions.
Section 195-1 of the Act provides a definition of a CTP scheme for the purposes of the GST insurance provisions. A CTP scheme is a scheme or arrangement that is established by an Australian law and that is of a kind specified in the regulations.
For the purposes of this definition, Regulation 195-1.01 provides that a CTP scheme is one that is specified in Schedule 11 of the principal regulations. The regulations insert new Schedule 11.
CTP ancillary payment or supply
GST is applied to an insurer's business margin. This means that on a pooled receipts basis, net GST is applied to the margin through the application of GST to the supply of CTP cover and the reduction of that GST by way of a decreasing adjustment for payments or supplies made in settlement of claims.
The Act has been amended to allow an operator to claim a decreasing adjustment for a CTP ancillary payment or supply. A CTP ancillary payment or supply is a payment or supply made for the provision of medical care and rehabilitation services, or to enable such services to be provided, to injured persons or to the families or representatives of injured or deceased persons. A CTP ancillary payment or supply is made directly to the service provider or as part of a scheme wide bulk-billing arrangement and is not made in settlement of a claim made under an insurance policy or a claim for compensation.
Section 79-35 of the Act sets out the definition of a CTP ancillary payment or supply. Paragraph 79-35(3)(b) provides that a CTP ancillary payment or supply is a payment or supply that is of a kind that is specified in the regulations.
Regulation 79-35.01 specifies each payment or supply that is a CTP ancillary payment or supply.
The Act specifies no conditions that need to be met before the power to make the regulations may be exercised.
Details of the regulations are provided in the Attachment.
The regulations are taken to have commenced on 1 July 2000.
Subsection 48(2) of the Acts Interpretation Act 1901 provides that regulations may not be expressed to take effect before the date of notification where a person would be adversely affected by the regulations. No persons, other than the Commonwealth, will be adversely affected by the Regulations.
Details of the Regulations
Regulation 1 provides for the title of the Regulations.
Regulation 2 provides that the Regulations commence on 1 July 2000.
Regulation 3 provides that Schedule 1 amends the A New Tax System (Goods and Services) Tax Regulations 1999.
Regulation 195-1.01 provides that a scheme or arrangement specified in Schedule 11 is a compulsory third party (CTP) scheme for the purposes of paragraph (b) of section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999 (the Act). [Schedule 1, item 1, Regulation 195-1.01]
Regulation 79-35.01 specifies each payment or supply that is a CTP ancillary payment or supply for the purposes of paragraph 79-35(3)(b) of the Act. [Schedule 1, item 2, Regulation 79-35.01]
CTP schemes that are specified in Schedule 10 as statutory compensation schemes for the purposes of Division 78 of the Act are removed from that schedule. The CTP schemes are now specified in Schedule 11. [Schedule 1, item 3 and item 4]