In the 2010-11 Budget, the Government announced that it would amend the GST law to clarify the operation of the GST margin scheme, including a technical amendment to the provision dealing with subdivided land. This was in response to a Treasury review of the margin scheme, following recommendations by the Board of Taxation in its Review of the Legal Framework for the Administration of the GST.
A discussion paper relating to the policy design and implementation of the proposed amendments was released on 10 December 2010. Exposure draft material relating to the subdivided land provision has now been released by Treasury, taking into account comments made by stakeholders on the discussion paper.
The exposure draft legislation seeks to ensure that taxpayers are able to use the consideration method, the valuation method, or the GST-inclusive market value method, whichever is appropriate, when calculating the margin on a taxable supply of subdivided land. This would maintain consistency throughout Division 75 by allowing taxpayers to use the most appropriate method for calculating the GST payable, as well as reducing costs for taxpayers complying with their GST obligations.
The closing date for submissions is Wednesday 12 September 2012.