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Thursday, 21 September 1972
Page: 1857


Mr Crean asked the Treasurer, upon notice:

What is the loss of sales tax revenue occasioned by treating computers as not being office equipment and allowing their exemption as aids to manufacture.


Mr Snedden - The answer to the honourable member's question is as follows:

The sales tax exemption for aids to manufacture applies to equipment for use by a manufacturer exclusively, or primarily and principally, in carrying out specified classes of operations in connection with the manufacture of goods or in carrying out scientific research in relation to his manufacturing operations. Certain classes of equipment are specifically excluded from exemption as aids to manufacture and one of the classes of goods so excluded is office equipment which is not for use directly in the manufacture of goods.

A computer installation normally comprises several units of equipment. Some items used in computer operations, e.g., manually operated card and tape punching machines, verifiers and card sorting and collating equipment, are classifiable as office equipment. Other units of equipment, e.g., centra] processing units and ancillary equipment such as line printers and tape readers, do not fall into the category of goods known as office equipment. These are not debarred from exemption as aids to manufacture.

Some manufacturers use computers primarily and principally in carrying out scientific research in relation to their manufacturing operations. They are entitled to exemption from sales tax on those items in the computer installation that are not classifiable as office equipment. No statistical information is available on the cost to revenue of this exemption but computers generally are not used for purposes that would bring them within the scope of the aids to manufacture exemption.







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