Ursula Stephens (NSW, Australian Labor Party, Parliamentary Secretary for Social Inclusion and the Voluntary Sector) Share this | Hansard source

I thank Senator Fifield for that contribution. It is very important to acknowledge that schedule 1 of the Tax Laws Amendment (2010 GST Administration Measures No. 1) Bill 2010 contains amendments which address concerns which were raised in many submissions to the Board of Taxation review of the legal framework for the administration of the  goods and services tax. Those submissions expressed concern that the adjustment provisions failed to reflect the commercial reality of transactions by not considering related payments to third parties that effectively alter the consideration provided for the supply. These amendments ensure that adjustments are required in situations in which monetary consideration is paid by an entity in the supply chain to a third party, and this effectively alters the consideration paid. As a result, the GST outcome will reflect the true economic outcome of these transactions. An example of this could be where a manufacturer paid a discount to the purchaser direct without going through the retailer.

The amendments in schedule 2 remove any doubt that input tax credits may always be claimed in the current tax period. Allowing claims in the current period allows taxpayers to avoid the higher compliance cost associated with amending returns for the prior periods. This measure gives effect to the recommendation of the Board of Taxation review of GST administration and the measure will apply from 1 July this year. These two measures are part of our busy legislative program of delivering 41 of the 46 recommendations that the government accepted from the Board of Taxation review. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.