In media release No 2011/04, issued 11 January 2011, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of draft legislation to change how to determine which taxes, fees and charges are exempt from GST.
The Government announced in the 2010-11 Budget that it would amend the law to replace the current mechanism for exempting Australian taxes, fees and charges under Division 81 of the GST Act with a principles based legislative exemption with effect from 1 July 2011. In order to allow for a smooth transition to the new mechanism, Australian taxes, fees and charges will continue to be exempt under the A New Tax System (Goods and Services Tax) (Exempt taxes, fees and charges) Determination 2011 (No1) until 1 July 2012.
The key features of the amendments to Division 81 include:
- Replacing the current mechanism for exempting Australian taxes, fees and charges from the GST with a principles-based legislative exemption
- Allowing government entities to self assess the GST treatment of an Australian tax, fee or charge, rather than having to have it listed in a Determination
- Providing for the GST treatment of a specific Australian tax, fee or charge, or an Australian tax, fee or charge of a kind to be specified by regulation.
Consultation closes on Friday, 11 February 2011.