In the 2010-11 Budget the Government announced that it will amend the financial supply provisions of the GST law to clarify the operation of the legislation and reduce compliance and administrative costs, particularly for many small businesses, with effect from 1 July 2012.
Treasury has now released draft legislation for the implementation of three of the measures agreed to by the Government. The key features of the amendments include:
- increasing the financial acquisitions threshold input tax credit test from $50,000 to $150,000;
- allowing small businesses that account on a cash basis to access full input tax credits upfront when they enter into hire purchase arrangements; and
- excluding bank deposit accounts from the current special rules for borrowings.
Draft regulations to implement the remaining measures will be released for consultation at a later stage.
The closing date for submissions is Friday, 16 September 2011.