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Thursday, 27 May 1993
Page: 1487


Senator McMULLAN —Senator Ferguson asked me a question recently concerning spare parts. The Assistant Treasurer has provided the following answer. The Government is aware of the position outlined in Senator Ferguson's question. Under the new sales tax legislation, parts used in the repair of machinery or other goods are regarded as being applied to the own use of the repairer. If they are drawn from a tax free stock, they are liable to sales tax at that time unless an exemption item applies.

  Where farm machinery belonging to a farmer is being repaired or reconditioned, an exemption item applies to exempt the parts. However, where a dealer owns the machinery, the repair of that machinery does not attract exemption because the dealer is not an exempt person or an exempt user. The Government has the matter under review, but has not yet reached any final conclusion on the issue.