This year's Budget contained only two new GST measures:

  • continuing access to reduced input tax credits for credit unions which rebranded as banks from 1 July 2011. This measure relates to the specific credit union RITC (Item 16) and applies to those entities who were APRA approved credit unions which subsequently changed their branding to include the title "bank" but did not otherwise change their corporate structure; and
  • broadening the range of GST-free nicotine replacement therapies. In particular, this measure ensures nicotine replacement therapies that are now permitted to be sold in non-pharmacy settings continue to be GSTfree to consumers.

The 5 other GST measures contained in the Budget have previously been announced (or contain minor amendments to previous announcements) all of which have no (or "unquantifiable but small") revenue impact:

  • the GST cross border measures announced in last year's Budget which were to take effect from 1 July 2012 will now have a date of effect from the first quarterly tax period following Royal Assent. This was expected given no exposure draft legislation had been released. Interestingly, the Budget announcement stated that for these changes:
    • changes to the non-resident agency provisions will not proceed (presumably meaning no extension of the provision to intermediaries);
    • but the definition of PE for GST purposes will be clarified and narrowed;
  • an amendment to last year's Budget announcement relating to GST-free health supplies to ensure a health supply by a health care provider paid by a statutory compensation scheme operator is GST-free in certain circumstances;
  • limiting the Commissioner's ability to backdate GST registrations to four years with effect from 1 July 2012, a measure which was contained in the recent self assessment of indirect taxes legislation – in order to avoid potential double taxation;
  • an amendment to last year's Budget announcement (and recently released Exposure Draft legislation) relating to the sale of property by a mortgagee / chargee. Such amendments will apply from the first quarterly tax period after Royal Assent; and
  • a minor change to the GST treatment of appropriations between Government related entities (previously released as an Exposure Draft).

The Budget also contains the previously announced measure (already in a Bill before Parliament) restoring the Commissioner's ability to withhold refunds for verification, to overcome the Multiflex decisions, and confirms it is a revenue neutral measure.

Finally, we note GST plays absolutely no part in the Treasurer's 35 page Tax Reform Road Map released with the Budget, apart from one mention in a table showing GST – perhaps ironically given its absence from the Road Map – to be the fourth most "efficient" tax.

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Greenwoods & Freehills are the winners of the 2011 BRW Client Choice Awards.