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TAXATION LAWS AMENDMENT BILL (NO. 3) 1994

Order of the day read for the consideration of message no. 379 from the

House of Representatives in committee of the whole (see entry no 15, 20

October 1994).

In the committee

Message read.

SCHEDULE OF THE AMENDMENTS MADE BY THE SENATE TO WHICH

THE HOUSE OF REPRESENTATIVES HAS DISAGREED

No. 31-- Clause 129, page 75, at end of clause, add "and provide for

sales tax credits in respect of parts used in

re-manufacturing goods sold to or leased by exempt users".

No. 32-- After clause 132, page 76, insert the following clause:

Meaning of "eligible short-term lease" etc.

"132A. Section 15A of the Principal Act is amended by omitting

subsection (2) and substituting the following subsections:

"(2) The Commissioner and a person ("the lessor") who grants

leases of goods in the course of a business may agree on a

percentage (other than nil) as the exempt percentage in relation

to goods of a particular kind. The percentage agreed on must be

the percentage of the statutory period during which it is agreed

to be likely that the goods will be used by the lessor for lease

(other than eligible long-term lease) to persons who, or whose

sublessees, intend to use the goods during the whole of the term

of the lease or sublease so as to satisfy one or more exemption

Items.

"(2A) The Commissioner and the lessor who grants leases of

Australian-used goods in the course of a business may agree on a

percentage (other than nil) as the exempt percentage in relation

to eligible repair goods incorporated in Australian-used goods of

a particular kind. The percentage agreed on must be the percentage

of the statutory period during which it is agreed to be likely

that the Australian-used goods will be used by the lessor for

lease (other than eligible long-term lease) to persons who, or

whose sublessees, intend to use the Australian-used goods during

the whole of the term of the lease or sublease so as to satisfy

the exemption Items covered by subsection 15C(2).'.".

No. 33-- After clause 132, page 76, insert the following clause:

Eligible repair goods

"132B. Section 15C of the Principal Act is amended:

(a) by omitting from subsection (1) paragraphs (c) and (d), and

substituting the following paragraphs:

"(c) after the goods become an integral part of the

Australian-used goods:

(i) property in the Australian-used goods passes under a

contract from the claimant to another person ("the

exemption user"); or

(ii) the Australian-used goods are leased by the

claimant to the exemption user for a term at least

as long as the statutory period; or

(iii) the Australian-used goods are sold by the claimant

to a person for lease by that person to the

exemption user for a term at least as long as the

statutory period; and

(d) where:

(i) subparagraph (c)(i) or (ii) applies--the exemption

user gives a declaration under subsection (2) to the

claimant; or

(ii) subparagraph (c)(iii) applies--the exemption user

gives a declaration under subsection (2) to the

lessor of the Australian-used goods and a copy of

that declaration is supplied by the lessor to the

claimant.';

(b) by omitting from subsection (2) "and 38" and substituting ",

38 and any other exemption Item which provides exemption for

goods for use by an "always-exempt person' within the

meaning of the Sales Tax (Exemptions and Classifications)

Act 1992";

(c) by omitting subsection (3) and substituting the following

subsection:

"(3) The time when the goods become eligible repair goods is

the later of:

(a) if subparagraph (1)(c)(i) applies--the time when the

property in the Australian-used goods passes to the

exemption user; or

(b) if subparagraph (1)(c)(ii) or (iii) applies--the time

when the Australian-used goods are leased to the

exemption user;

and the time when the declaration, or a copy of the

declaration, is given to the claimant.".

SCHEDULE OF THE AMENDMENT MADE BY THE SENATE

DISAGREED TO BY THE HOUSE OF REPRESENTATIVES,

BUT BILL AMENDED IN PLACE THEREOF

No. 4-- Clause 57, line 32 (page 46) to line 33 (page 47), omit the

clause, substitute the following clause:

Rebates for dependants

"57. Section 159J of the Principal Act is amended:

(a) by inserting after subsection (5D) the following

subsections:

"(5E) If:

(a) after taking into account any reduction because of the

application of any other provision of this section, a

rebate is allowable to a taxpayer under this section

for a year of income in respect of a dependant who is

the spouse of the taxpayer; and

(b) an amount or amounts of home child care allowance

(within the meaning of the Social Security Act 1991)

were paid to the spouse at any time during the year of

income;

the rebate is to be reduced or further reduced, as the case

requires, by the amount, or the sum of the amounts, of the home

child care allowance.

"(5F) If, during a full year of income, the spouse of a

taxpayer qualified for the maximum rate of home child care

allowance (within the meaning of the Social Security Act

1991), the taxpayer is not entitled to claim all or part of a

rebate in respect of that spouse under this section.

"(5G) If, in a year of income, as a result of the operation of

subsection (5E), a rebate is reduced or further reduced, as

the case requires, by an amount, or the sum of amounts, of

home child care allowance (within the meaning of the Social

Security Act 1991), then, in spite of any other law, that

rebate is not payable until the end of that year.';

(b) by inserting "home child care allowance, child care cash

rebate,' before "or a child disability allowance' in

paragraph (a) of the definition of "separate net income'

in subsection (6).".

AMENDMENT DISAGREED TO, BUT, IN PLACE THEREOF,

THE FOLLOWING AMENDMENT MADE

Clause 57, page 46 (line 32) to page 47 (line 33), omit the clause,

substitute the following clause:

Rebates for dependants

"57. Section 159J of the Principal Act is amended:

(a) by omitting from subsection (1B) "1 or';

(b) by inserting after subsection (5D) the following subsection:

"(5E) If:

(a) after taking into account any reduction because of the

application of any other provision of this section, a

rebate is allowable to a taxpayer under this section for

a year of income in respect of a dependant who is the

spouse of the taxpayer; and

(b) an amount or amounts of home child care allowance

(within the meaning of the Social Security Act 1991)

were paid to the spouse at any time during the year of

income;

the rebate is to be reduced or further reduced, as the case

requires, by the amount, or the sum of the amounts, of the home

child care allowance.';

(c) by inserting "home child care allowance,' before "or a child

disability allowance' in paragraph (a) of the definition of

"separate net income' in subsection (6).".

The Parliamentary Secretary to the Minister for Primary Industries and

Energy (Senator Sherry) moved--That the committee:

(a) does not insist upon its amendments nos 4, 31, 32 and 33 disagreed

to by the House of Representatives;

(b) agrees to the amendment made by the House of Representatives in

place of Senate amendment no. 4 in the bill; and

(c) makes the following further amendment to the bill:

Part 4, after Division 6, page 84, insert the following Division:

"Division 6A--Amendments relating to eligible repair goods

"Subdivision A--Amendment of the Sales Tax Assessment Act 1992

Principal Act

"155A. In this Subdivision, "Principal Act' means the Sales Tax

Assessment Act 19923.

General definitions

"155B. Section 5 of the Principal Act is amended by inserting the

following definition:

" "always-exempt person" means a person whose use of goods of whatever

kind is always covered by an exemption Item, regardless of the way in

which the goods are used by the person;'.

Eligible repair goods

"155C. Section 15C of the Principal Act is amended:

(a) by omitting paragraph (1)(d) and substituting the following

paragraph:

"(d) the exemption user gives the claimant:

(i) a declaration that the exemption user is an always-exempt

person; or

(ii) a declaration under subsection (2).';

(b) by omitting from subsection (2) "paragraph (1)(d)' and

substituting "subparagraph (1)(d)(ii)';

(c) by omitting the second sentence of subsection (2);

(d) by inserting after subsection (2) the following subsection:

"(2A) A declaration under subparagraph (1)(d)(i) or subsection (2)

must be in writing in a form approved by the Commissioner and

signed by the exemption user.'.

Schedule 1

"155D. Schedule 1 to the Principal Act is amended by omitting column

[4] of Table 3 in relation to credit ground CR22 and substituting:

"(a) if the exemption user mentioned in section 15C is an

always-exempt person--the tax borne on the goods to the extent

that the claimant has not passed it on; or

(b) in any other case--the tax borne on the goods.'.

"Subdivision B--Amendment of the Sales Tax (Exemptions and

Classifications) Act 1992

Principal Act

"155E. In this Subdivision, "Principal Act' means the Sales Tax

(Exemptions and Classifications) Act 19924.

Interpretation

"155F. Section 3 of the Principal Act is amended by omitting from

subsection (2) the definition of "always-exempt person'.

"Subdivision C--Application

Application

"155G. The amendments made by this Division apply to goods where the

repair, renovation or reconditioning of the goods mentioned in

subsection 15C(1) of the Sales Tax Assessment Act 1992 as amended by

this Division occurs on or after the day on which this Division

commences.".

Explanatory memorandum: Senator Sherry tabled a further supplementary

explanatory memorandum relating to the Government amendment to be moved

to the bill.

Debate ensued.

Senator Patterson, also on behalf of Senator Lees, moved the following

amendment:

At end of motion, add "; and (d) makes the following further amendments

to the bill:

After clause 56, page 46, insert the following clause:

Indexation of rebate amounts in sections 159J, 159K and 159L

"56A. Section 159HA of the Principal Act is amended by adding at the

end the following subsection:

"(8) To avoid doubt, the reference in paragraph (a) of the definition

of "indexable amount" in subsection (7) to an amount specified in

subsection 159J(2) does not include a reference to the amount of

$1,452 mentioned in subsection 159J(1C).'.".

Clause 57, page 46, after paragraph (a), insert the following paragraph:

"(aa) by inserting after subsection (1B) the following subsection:

"(1C) If:

(a) apart from subsection (1A), a taxpayer would be entitled in

his or her assessment in respect of income of a year of income

to a rebate under this section in respect of a dependant

included in class 3 or 4 in the table in subsection (2); and

(b) disregarding this subsection and subsections (3) to (6), the

taxpayer is entitled in that assessment to a rebate under this

section in respect of a dependant included in class 1 in that

table; and

(c) the amount of the rebate mentioned in paragraph (b) is not

more than $1,452;

the entitlement to a rebate under this section in respect of the

dependant included in class 1 in the table is to be calculated as if

the amount applicable under the table in respect of that dependant

were $1,452.';".

Clause 58, page 48, paragraph (c), proposed subparagraph (pa)(iii) of

the definition of "Qualifying reductions", lines 22 to 27, omit the

subparagraph, substitute the following subparagraph:

"(iii) if the preceding year of income is the 1994-95 year of

income, or any later year of income, and subsection 159J(1C)

did not apply in relation to the rebate--100%;".

After clause 58, page 48, insert the following clause:

Provisional tax on estimated income

"58A. Section 221YDA of the Principal Act is amended by inserting in

paragraph (1)(da) and subparagraph (2)(a)(ii) "or to which subsection

159J(1C) applies" after "other than section 159N.".

Clause 59, page 48, subclause (2), line 37, after "56", insert ", 56A".

Clause 59, page 48, at end of clause, add the following subclauses:

"(3) The amendments made by section 58 apply to provisional tax

(including instalments) payable in respect of income of the 1994-95

year of income and of all later years of income.

"(4) The amendments made by section 58A apply to estimates or

calculations of provisional tax (including instalments) payable in

respect of income of the 1995-96 year of income and of all later years

of income.".

At end of bill, page 85, add the following Part:

"PART 5--AMENDMENT OF THE INCOME TAX REGULATIONS

Amendment

"160. Regulation 76 of the Income Tax Regulations is amended by adding

at the end the following subregulation:

"(2) If:

(a) on or after 1 July 1995, an employee receives or is entitled to

receive payments of salary or wages in respect of a week or part

of a week in a year of income; and

(b) during that week or part of a week, the employee contributes to

the maintenance of:

(i) a dependant included in class 1 in the table in subsection

159J(2) of the Act who is a resident; and

(ii) a dependant included in class 3 or 4 in that table who is a

resident; and

(c) the amount that, in respect of the year of income, is taken by

section 159HA of the Act to replace the amount of $1,000 in

relation to the dependant included in class 1 in the table is

not more than $1,452;

the employee is not entitled to have the concessional rebate applicable

to the dependant included in class 1 in the table taken into account in

determining the prescribed rate of deductions to be made for the

purposes of section 221C of the Act, by the employee's employer, from

the payments of salary or wages.'.

Amendment or repeal of Income Tax Regulations

"161. The amendment of the Income Tax Regulations by this Part does

not prevent the amendment or repeal, by regulations, of the Income Tax

Regulations as amended by this Part.".

Debate ensued.

Question--That the amendment be agreed to--put and passed.

Main question, as amended, further debated and agreed to.

Resolution to be reported.

The Acting Deputy President (Senator Herron) resumed the Chair and the

Temporary Chairman of Committees (Senator Colston) reported that the

committee had considered message no. 379 of the House of Representatives

relating to the Taxation Laws Amendment Bill (No. 3) 1994 and had

resolved not to insist on the amendments to which the House of

Representatives had disagreed, to agree to the amendment made by the

House of Representatives in place of Senate amendment no. 4 with a

further amendment and had made further amendments to the bill.

On the motion of Senator Sherry the report from the committee was

adopted.