Commonwealth Numbered Acts

SALES TAX ASSESSMENT (No. 4) AMENDMENT ACT 1978 No. 200, 1978 - SECT 4

4. Section 4 of the Principal Act is amended-

(a) by omitting ''For the purposes of this Act'' and substituting ''Subject to
sub-sections (3), (4) and (6) of this section, to section 4A and to
sub-sections (5B) and (5C) of section 18 of the Sales Tax Assessment Act (No.
1) 1930 in their application in accordance with section 12 of this Act, for
the purposes of this Act''; and

   (b)  by adding at the end thereof the following sub-sections:

''(2) Where-

   (a)  goods that have been purchased after 20 September 1978 by a registered
        person who has quoted his certificate in respect of those goods-

        (i)    were manufactured for the purchaser in whole or in part out of
               materials supplied by the purchaser;

        (ii)   were purchased by the purchaser for an amount that is less
               than-

                (A)  if the goods are of a class which the person from whom
                     the goods were purchased himself sells by wholesale-the
                     amount for which the goods could reasonably be expected
                     to have been purchased by the purchaser from that person
                     by wholesale if all the materials used in the manufacture
                     of the goods had been purchased by the manufacturer in
                     the ordinary course of his business from a person with
                     whom he was dealing at arm's length; or

                (B)  in any other case-the amount for which the purchaser
                     could reasonably be expected to have purchased identical
                     goods from a manufacturer if that manufacturer had, in
                     the ordinary course of his business, manufactured the
                     identical goods for sale wholly out of materials
                     purchased in the ordinary course of his business from a
                     person with whom he was dealing at arm's length and had
                     sold the identical goods to the purchaser by wholesale;
                     and

        (iii)  have been applied by the purchaser to his own use; or

   (b)  goods that have been manufactured in Australia for a person, under an
        agreement to manufacture the goods entered into after 20 September
        1978, in whole or in part out of materials supplied by that person-

        (i)    were deemed by section 3A to have been purchased by the person;
               and

        (ii)   have been applied by the person to his own use,

sub-section (3) applies to the goods.

''(3) Subject to sub-section (6), the sale value of goods to which this
sub-section applies is-

   (a)  where all the relevant materials used in the manufacture of the goods
        consisted of goods the sale values of which were exempt from sales tax
        by virtue of the Sales Tax (Exemptions and Classifications) Act 1935-

        (i)    if the goods are of a class which the person from whom the
               goods were purchased, or were deemed to have been purchased,
               himself sells by wholesale-the amount for which the goods could
               reasonably be expected to have been purchased by the purchaser
               from that person by wholesale if all the materials used in the
               manufacture of the goods had been purchased by the manufacturer
               in the ordinary course of his business from a person with whom
               he was dealing at arm's length; or

        (ii)   in any other case-the amount for which the purchaser could
               reasonably be expected to have purchased identical goods from a
               manufacturer if the manufacturer had, in the ordinary course of
               his business, manufactured the identical goods for sale wholly
               out of materials purchased in the ordinary course of his
               business from a person with whom he was dealing at arm's length
               and had sold the identical goods to the purchaser by wholesale;

   (b)  where all the relevant materials used in the manufacture of the goods
        comprised-

        (i)    excluded goods;

        (ii)   goods the sale values of which were not exempt from sales tax
               by virtue of the Sales Tax (Exemptions and Classifications) Act
               1935; or

        (iii)  excluded goods and goods referred to in sub-paragraph (ii),

the amount paid by the purchaser in respect of the goods; or

   (c)  in any other case-the sum of-

        (i)    the amount for which the purchaser could reasonably be expected
               to have purchased by wholesale materials identical in all
               material respects with the relevant materials used in the
               manufacture of the goods which consisted of goods the sale
               values of which were exempt from sales tax by virtue of the
               Sales Tax (Exemptions and Classifications) Act 1935 from
               another person who sold by wholesale the materials identical in
               all material respects with the relevant materials in the
               ordinary course of his business; and

        (ii)   the amount paid by the purchaser in respect of the goods.

''(4) Subject to sub-section (6), where-

   (a)  goods that have been purchased after 20 September 1978 by a registered
        person who quoted his certificate in respect of the goods have been
        applied by the purchaser to his own use; and

   (b)  the goods were manufactured for the purchaser in whole or in part out
        of materials sold to the manufacturer-

        (i)    by the purchaser; or

        (ii)   by another person who did so at the request of, or under an
               agreement with, the purchaser, the sale value of the goods,
               for the purposes of this Act, is-

   (c)  if the goods are of a class which the person from whom the goods were
        purchased himself sells by wholesale-the amount for which the goods
        could reasonably be expected to have been purchased by the purchaser
        from that person by wholesale if all the materials used in the
        manufacture of the goods had been purchased by the manufacturer in the
        ordinary course of his business from a person with whom he was dealing
        at arm's length; or

   (d)  in any other case-the amount for which the purchaser could reasonably
        be expected to have purchased identical goods from a manufacturer if
        the manufacturer had, in the ordinary course of his business,
        manufactured the identical goods for sale wholly out of materials
        purchased in the ordinary course of his business from a person with
        whom he was dealing at arm's length and had sold the identical goods
        to the purchaser by wholesale.

''(5) Where-

   (a)  goods (in this sub-section referred to as the 'relevant goods') that
        have been purchased after 20 September 1978 by a registered person who
        quoted his certificate in respect of the goods have been applied by
        the purchaser to his own use;

   (b)  the Commissioner is satisfied that, having regard to any connection
        between the vendor and the purchaser of the relevant goods or to any
        other relevant circumstances (including circumstances arising out of
        any agreement entered into between the vendor and the purchaser, or
        out of any other agreement, that was related, directly or indirectly,
        to the sale of the goods), the vendor and the purchaser were not
        dealing with each other at arm's length in relation to the
        transaction; and

   (c)  the Commissioner is also satisfied-

        (i)    that the amount for which the relevant goods were purchased is
               less than the amount (in this sub-section referred to as the
               'arm's length price') for which, in the opinion of the
               Commissioner, the relevant goods could reasonably be expected
               to have been purchased if the vendor and the purchaser had been
               dealing with each other at arm's length in relation to the
               transaction; or

        (ii)   that-

                (A)  the purchaser could have purchased identical goods from
                     another person by wholesale and obtained delivery of the
                     identical goods at or about the time when the purchaser
                     obtained delivery of the relevant goods; and

                (B)  the amount for which the relevant goods were purchased is
                     less than the amount (in this sub- section referred to as
                     the 'alternative price') for which, in the opinion of the
                     Commissioner, the identical goods could reasonably be
                     expected to have been purchased by the purchaser, the
                     Commissioner shall alter the sale value of the relevant
                     goods to the amount ascertained in accordance with the
                     following paragraphs:

   (d)  if the Commissioner is satisfied as to the matter mentioned in
        sub-paragraph (i) of paragraph (c) but not as to the matters mentioned
        in sub-paragraph (ii) of that paragraph-an amount equal to the arm's
        length price;

   (e)  if the Commissioner is satisfied as to the matters mentioned in
        sub-paragraph (ii) of paragraph (c) but not as to the matter mentioned
        in sub-paragraph (i) of that paragraph-an amount equal to the
        alternative price;

   (f)  if the Commissioner is satisfied as to the matter mentioned in
        sub-paragraph (i) of paragraph (c) and also as to the matters
        mentioned in sub-paragraph (ii) of that paragraph-an amount equal to
        the lesser of-

        (i)    the arm's length price; and

        (ii)   the alternative price.

''(6) Where the Commissioner alters the sale value of goods in pursuance of
sub-section (5), the sale values so altered shall be the sale value of the
goods for the purposes of this Act.

''(7) For the purposes of this section-

   (a)  goods manufactured for a person (in this sub-section referred to as
        the 'customer') shall be taken to have been manufactured in whole or
        in part out of materials supplied by the customer if the goods were
        manufactured in whole or in part out of materials-

        (i)    which were supplied by the customer or by another person at the
               request of, or under an agreement with, the customer; or

        (ii)   which the customer purchased, or agreed to purchase, from the
               manufacture; and

   (b)  the materials which were so supplied or purchased and were used in the
        manufacture of the goods shall be taken to have been the relevant
        materials used in the manufacture of the goods.

''(8) In this section-

   (a)  a reference to excluded goods shall be read as a reference to goods,
        including commodities, of a kind referred to in paragraph (a) or (b)
        of the definition of 'goods' in sub-section (1) of section 3 of the
        Sales Tax Assessment Act (No. 1) 1930 in its application in accordance
        with section 12 of this Act; and

   (b)  a reference to identical goods shall be read as a reference to goods
        identical in all material respects with the goods in relation to which
        the expression is used.

''(9) In this section, 'agreement' means any agreement, arrangement or
understanding-

   (a)  whether formal or informal;

   (b)  whether express or implied; or

   (c)  whether or not enforceable, or intended to be enforceable, by legal
        proceedings.''.