Commonwealth Numbered Regulations - Explanatory Statements

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SALES TAX ASSESSMENT REGULATIONS (AMENDMENT) 1995 NO. 86

STATUTORY RULES 1995 No. 86

Issued by the Authority of the Assistant Treasurer

Sales Tax Assessment Act 1992

Sales Tax Assessment Regulations (Amendment)

Subsection 131 (1) of the Sales Tax Assessment Act 1992 (the Act) provides that the GovernorGeneral may make regulations prescribing matters necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The amendments contained in the regulations are technical changes required in consequence of amendments to the Migration Act 1958, the Migration Regulations and the Sales Tax Assessment Regulations (the STAR). One amendment deals with the provisions covering tax free sales of goods to foreign visitors to Australia. The other deals with the provisions covering evidentiary certificates where the Commissioner of Taxation is taking action against a person for the recovery of sales tax.

The sales tax exemption for foreign visitors to Australia is intended to apply to goods purchased by visitors who will take the goods with them as accompanied baggage when they leave. The current sales tax regulations covering tax free sales to foreign visitors require the visitors to hold entry permits granted in relation to their visitor visas under the Migration Act 1958. However the Migration Act 1958 and the Migration Regulations have been amended so that from 1 September 1994 entry permits are no longer issued to visitors. This has made it impossible for foreign visitors meet the requirements for sales tax exemption. A retrospective amendment to the STAR is needed to restore the entitlement.

Section 5(c) of the STAR defines "eligible foreign traveller" as being a person defined to be an eligible foreign traveller by regulations made for the purposes of the definition. The proposed amendment alters the definition of eligible foreign traveller in paragraph 5(c) of the STAR by removing the reference to entry permits and listing the specific classes of persons who can qualify for visitor visas under the Migration Regulations.

The retrospective effect of the amendment means that vendors are not liable for sales tax on sales of goods to foreign visitors after 1 September 1994 merely because the visitors did not possess entry permits. The amendment ensures that all of the classes of foreign visitors who could qualify for the exemption prior to 1 September 1994 will continue to qualify, and therefore be able to buy goods free of sales tax for export as accompanied baggage.

The second amendment alters one of the evidentiary certificate requirements in regulation 18 of the STAR. Regulation 18 prescribes the information which must be included in an evidentiary certificate to be used by the Commissioner of Taxation when taking action against a person to recover unpaid sales tax. Currently, paragraph 18(b) of the STAR requires the Commissioner to certify that an assessment of sales tax payable by a person was made against the person in respect of the year set out in the certificate.

The sales tax legislation does not impose a liability to taxation in respect of any particular year. Section 16 of the Act establishes liability to tax on transactions with goods referred to as assessable dealings without reference to the period in which those dealings occur.

The reference to "year" in paragraph 18(b) of the STAR is inconsistent with the Act which does not require an assessment to be made in respect of a particular year or any other specific period. The requirement in paragraph 1 8(b) will therefore be that an assessment of sales tax payable by the person was made against the person. The amendment removes the reference to year in paragraph 18(b). The amendment operates retrospectively from 16 June 1994, the commencement date of Statutory Rules 1994 No. 194 which caused the inconsistency.

Both of the proposed amendments will have a retrospective effect. However, as neither adversely affects any person other than the Commonwealth, it is considered that section 48 of the Acts Interpretation Act 1901 will not be contravened.

Details of the regulations are as follows:

Regulation 1 - provides the retrospective commencements referred to above. It provides that regulation 3 is taken to have commenced on 1 September 1994, the commencement of the relevant amendments to the Migration Regulations referred to above (subregulation 1.1). It also provides that regulation 4 is taken to have commenced on 16 June 1994, the commencement of Statutory Rules 1994, No. 194 (subregulation 1.2).

Regulation 2 - provides for the amendment of the STAR.

Regulation 3 - omits paragraph 5(c) of the STAR and substitutes subparagraphs 5(c)(i) and 5(c)(ii) Which contain the classes of persons qualifying for visitor visas under the Migration Regulations and therefore entitled to purchase goods free of sales tax provided the goods are taken out of Australia as accompanied baggage.

Regulation 4 - effectively amends paragraph 18(b) by removing the requirement that the certificate referred to in regulation 18 of the STAR must refer to the year in which the assessment of sales tax was made.