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TAXATION LAWS AMENDMENT ACT (NO. 3) 2002 NO. 97, 2002 - SCHEDULE 1

- Goods and services tax

Part 1—Supplies in return for rights to develop land

A New Tax System (Goods and Services Tax) Act 1999

1 Section 9-39 (after table item 9)

Insert:


9A
Supplies in return for rights to develop land
Division 82

2 Section 37-1 (after table item 30)

Insert:

30A
Supplies in return for rights to develop land
Division 82

3 At the end of subsection 81-5(1)

Add:

Note: Under Division 82, the payment might not be treated as consideration for a supply if it is in return for an Australian government agency supplying a right to develop land.

4 After Division 81

Insert:

Division 82—Supplies in return for rights to develop land

82-1 What this Division is about

GST does not apply to transactions for making supplies (commonly referred to as in kind developer contributions) in return for the supply by an Australian government agency of a right to develop land.

82-5 Supplies of rights to develop land do not constitute consideration in certain cases
(1) The supply, by an * Australian government agency, of a right to develop land is not treated as * consideration for another supply if the other supply complies with requirements imposed by or under an * Australian law.
(2) It does not matter whether the other supply is made to the * Australian government agency.
(3) This section has effect despite section 9-15 (which is about consideration).
82-10 Supplies by Australian government agencies of rights to develop land are not for consideration
(1) The supply, by an * Australian government agency, of a right to develop land is treated as a supply that is not made for * consideration to the extent that it is made in return for another supply that complies with requirements imposed by or under an * Australian law.
(2) It does not matter whether the other supply is made to the * Australian government agency.
(3) If the other supply constitutes the payment of an * Australian tax, fee or charge to which subsection 81-5(1) applies, this section overrides subsection 81-5(1) in relation to the payment.
(4) This section has effect despite section 9-15 (which is about consideration).
5 Section 195-1 (note at the end of the definition of consideration)

After "81-5,", insert "82-5, 82-10,".

6 Application

The amendments made by this Part of this Schedule apply, and are taken to have applied, in relation to net amounts for tax periods starting, or that started, on or after 1 July 2000.

Part 2—Special transitional credits for rental cars

A New Tax System (Goods and Services Tax Transition) Act 1999

7 After section 19A

Insert:

19B Sales etc. of cars held on 1 July 2000 for the purpose of rental

Entitlement to special credit

(1) If, in relation to a supply of a car, all of the following conditions are met, the entity referred to in subsection (6) is entitled to a special credit under this section in relation to the supply:

(a)
the supply takes place, or took place:

(i)
on or after 1 July 2000; and
(ii)
before 1 July 2002;
(b)
the entity held the car at the start of 1 July 2000;

(c)
the supply is, or was, the first sale of the car on or after 1 July 2000;

(d)
during the entire period at the start of 1 July 2000 until the entity ceases to hold the car:

(i)
the entity held the car, for the purposes of supply by way of rental, in the course or furtherance of an enterprise; and
(ii)
the car was covered by the appropriate compulsory third party insurance under subsection (4);
(e)
the car has been the subject of sales tax.

(2) For the purposes of paragraph (1)(c), a sale of the car to the entity at the end of a period during which the entity was the lessee of the car is not treated as a sale of the car.
(3) For the purposes of subsection (1), a supply of the car to an insurer in settlement of a claim under an insurance policy is treated as a sale of the car.
(4) For the purposes of subparagraph (1)(d)(ii), the appropriate compulsory third party insurance for the car is:

(a)
in any case—compulsory third party insurance for which the premium was calculated on the basis that the car was for supply by the entity by way of rental in the course or furtherance of the enterprise referred to in subparagraph (1)(d)(i); or

(b)
if:

(i)
the car is not required, by the law of the State or Territory in which it is registered, to be covered by compulsory third party insurance of that kind; but
(ii)
there is another State or Territory in which it would be required to be covered by compulsory third party insurance of that kind if it were registered in that State or Territory;
the kind of compulsory third party insurance by which the car is required, by the law of the State or Territory in which it is registered, to be covered.

(5) This section does not apply to a supply in relation to which any entity is entitled to a special credit under section 19A.

Who is entitled to the special credit

(6) The entity entitled to the special credit is the entity that held the car for supply by way of rental (whether or not the entity made the sale referred to in paragraph (1)(c)).

Amount of the special credit

(7) The amount of the special credit in relation to the supply is an amount equal to 1 /11 of the price of the supply.
(8) However, if the car was covered by an eligible short-term lease, the amount of the special credit is an amount equal to:

where:

exempt percentage is the exempt percentage specified in an agreement under subsection 15A(2) of the Sales Tax Assessment Act 1992 that was in force on 30 June 2000 and that applies to the eligible short-term lease in question.

original special credit is the amount that would (but for this subsection) be the amount of the special credit.

Special rules for working out the price of the supply

(9) If:

(a)
the entity entitled to the special credit was so entitled as the lessee of the car; and

(b)
the entity is unable to find out the price at which the car was sold;

the price of the supply is taken to be an amount worked out in the way determined in writing by the Commissioner.

(10) If the supply of the car is part of another supply, the price of the supply of the car is an amount equal to the part of the price of the other supply that represents the supply of the car.
(11) If the supply of the car is a supply to an insurer in settlement of a claim under an insurance policy, the price of the supply is taken to be the sum of:

(a)
if the entity entitled to the special credit receives one or more payments from the insurer in settlement of the claim—the amount of the payment, or the sum of the amounts of all of the payments, as the case may be; and

(b)
if the entity entitled to the special credit receives one or more supplies from the insurer in settlement of the claim—the value of the supply, or the total value of all of the supplies, as the case may be.

When the special credit can be claimed

(12) The special credit is treated as though it were an input tax credit attributable to any one tax period of your choice ending:

(a)
on or after the day on which the Taxation Laws Amendment Act (No. 3) 2002 received the Royal Assent; and

(b)
on or before 7 January 2003, or such later day as the Commissioner determines in writing.

Definitions etc.

(13) In this section:

car has the meaning given by subsection 995-1(1) of the ITAA 1997.

held has the meaning given by subsection 995-1(1) of the ITAA 1997 for the purposes of Division 28 of that Act.

registered : a car is registered in a State or Territory if it is registered, under the law of the State or Territory, to be driven on a public road in the State or Territory.

(14) A reference in this section to a supply of a car by way of rental does not include:

(a)
a supply that involves passengers being transported by or on behalf of the supplier; or

(b)
a supply of a car to an entity that acquires the car for the purposes of supply by way of rental in the course or furtherance of an enterprise.

Income Tax Assessment Act 1997

8 Subsection 17-30(1)

Omit "or 19A" (wherever occurring), substitute ", 19A or 19B".

Part 3—Income tax-related transactions

A New Tax System (Goods and Services Tax) Act 1999

9 Section 9-39 (after table item 5A)

Insert:


5B
Income tax-related transactions
Division 110

10 Section 37-1 (after table item 17)

Insert:


17A
Income tax-related transactions
Division 110

11 After Division 108

Insert:

Division 110—Income tax-related transactions

110-1 What this Division is about

Some transactions that relate to aspects of income tax are outside the GST system.

110-5 Transfers of tax losses and net capital losses

(1) A supply is not a * taxable supply if the supply is:

(a)
the transfer of a * tax loss in accordance with Subdivision 170-A of the * ITAA 1997; or

(b)
the transfer of a * net capital loss in accordance with Subdivision 170-B of the ITAA 1997.

(2) This section has effect despite section 9-5 (which is about what are taxable supplies).
110-10 Transfers of excess foreign tax credits

(1) A supply is not a * taxable supply if:

(a)
the supply is the transfer of an initial excess credit, or an opening excess credit balance, referred to in paragraph 160AFE(1D)(c) of the * ITAA 1936; and

(b)
the transfer is in accordance with section 160AFE of the ITAA 1936.

(2) This section has effect despite section 9-5 (which is about what are taxable supplies).
14 Section 195-1

Insert:

net capital loss has the meaning given by subsection 995-1(1) of the * ITAA 1997.

15 Section 195-1 (note at the end of the definition of taxable supply)

After "100-5", insert ", 110-5, 110-10".

16 Section 195-1

Insert:

tax loss has the meaning given by subsection 995-1(1) of the * ITAA 1997.

19 Application

The amendments made by this Part of this Schedule apply, and are taken to have applied, in relation to net amounts for tax periods starting (or that started) on or after 1 July 2000.


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