A New Tax System (Goods and Services Tax) (Acquisitions of Second-hand Goods) Determination 2025

The central concept is Subdivision 66-B, which is the part of the Act that allows a margin scheme for second-hand goods. The determination operates by making that Subdivision apply to specified acquisitions. Second-hand goods is a defined term in section 195-1 of the Act, and the determination relies on that definition. Input tax credit is another defined term: the credit that a registered entity can claim for GST included in the price of goods or services it acquires for its creditable purpose. When Subdivision 66-B applies, the input tax credit on the acquisition is added to the entity’s total Subdivision 66-B credit amount, a running total that is then used to calculate the GST on the subsequent supply. The determination uses the phrase total Subdivision 66-B credit amount, which is also defined in section 195-1. The entity must choose that the acquisition will be covered by Subdivision 66-B (subsection 6(1)(b)). This is a crucial step: the regime is not automatic. The GST payable on the subsequent supply is then worked out under sections 66-45 and 66-50 of the Act, which apply a margin scheme notion. Registered entity means an entity that is registered, or required to be registered, for GST. The goods must be acquired for the purposes of sale or exchange (but not for manufacture) in the ordinary course of business. That phrase in subsection 6(1)(a) limits the regime to traders who resell the goods as they are, not to manufacturers who use them as raw materials. The exclusion provisions in subsection 6(2) carve out several situations: where the consideration is more than $1,000 and Subdivision 66-A would otherwise apply to the acquisition (paragraph (a)); where the supply to the entity was GST-free (paragraph (b)); where the supply was by way of hire (paragraph (c)); where the entity has already included or will include an input tax credit for the acquisition in its net amount (paragraph (d)); where the entity imported the goods but the importation was not a taxable importation (paragraph (e)); where all or part of the goods are subsequently supplied as a non-taxable supply (other than by taxable supply or taxable importation) (paragraph (f)); and where Subdivision 66-B already applies apart from this determination (paragraph (g)). These exclusions ensure the margin scheme is not used in circumstances where there is no GST embedded in the acquisition price or where other rules already apply. The goods list in subsection 6(3) is exhaustive but covers a very broad range of consumer goods, collectables, vehicles, equipment, and personal items.

The determination directly affects registered entities (including businesses, charities, and other organisations that are registered for GST) that acquire second-hand goods for the purpose of resale or exchange in the ordinary course of business, provided the goods are of a kind listed in subsection 6(3) and the entity wishes to use the Subdivision 66-B margin scheme. This includes, for example, antique dealers, second-hand car yards, op shops, pawnbrokers, recyclers, scrap metal dealers, vintage clothing sellers, bookshops that sell used books, electronics refurbishers, and any retailer dealing in used furniture, tools, sporting goods, or musical instruments. The determination also affects entities that previously relied on the repealed No. 31 determination, since the new list of goods is different (the earlier list is not reproduced but is replaced in its entirety). Entities that acquire second-hand goods for manufacture (i.e., to incorporate into new products) are not covered, as subsection 6(1)(a) excludes that purpose. Similarly, entities that acquire second-hand goods for hire (subparagraph 6(2)(c)) or that import goods in a non-taxable importation (subparagraph 6(2)(e)) cannot use the determination. The determination does not affect entities that are not registered for GST (they cannot claim input tax credits at all) or entities that acquire second-hand goods from a supplier who makes a GST-free supply (subparagraph 6(2)(b)) - for instance, if a charity supplies second-hand goods GST-free, the buyer cannot use Subdivision 66-B. The $1,000 threshold in subparagraph 6(2)(a) means that if the consideration for the acquisition exceeds $1,000 and the ordinary input tax credit rules of Subdivision 66-A would apply (typically because the supplier is not registered or does not quote an ABN), then the margin scheme cannot be used. This particularly affects larger-value second-hand goods acquisitions, such as expensive antiques, jewellery, artwork, or vehicles purchased from private sellers. The determination also affects tax professionals and advisers who must understand which goods qualify and which exclusions apply, and software developers who maintain GST compliance systems.

The determination creates a right for a registered entity to choose to have Subdivision 66-B apply to an acquisition of second-hand goods, provided the conditions in subsection 6(1) are met and none of the exclusions in subsection 6(2) apply. The right is conditional on the entity acquiring the goods for the purposes of sale or exchange (but not for manufacture) (paragraph 6(1)(a)) and on the entity choosing that the acquisition will be covered by Subdivision 66-B (paragraph 6(1)(b)). Once that choice is made, the entity must add the input tax credits attributable to the acquisition to its total Subdivision 66-B credit amount (subparagraph 6(1)(b)(i)) and then work out the GST payable on the subsequent supply in accordance with sections 66-45 and 66-50 of the Act (subparagraph 6(1)(b)(ii)). This right is not available if any of the seven exclusionary circumstances in subsection 6(2) exist. The primary duty is to not apply Subdivision 66-B when an exclusion applies. For example, if the consideration is more than $1,000 and Subdivision 66-A would otherwise apply (paragraph 6(2)(a)), the entity must not choose to use Subdivision 66-B. Similarly, if the supply to the entity was GST-free (paragraph 6(2)(b)) or by way of hire (paragraph 6(2)(c)), the entity must not use the Subdivision. If the entity has already claimed or will claim an input tax credit for the acquisition under normal rules (paragraph 6(2)(d)), it cannot also use Subdivision 66-B. The entity also has a duty to correctly classify the goods: only goods of a kind specified in subsection 6(3) may be subject to the Subdivision. If goods do not fall within any listed category, the right does not exist. The determination also imposes a record-keeping obligation by implication: to support the choice to apply Subdivision 66-B, the entity should document that the acquisition meets all conditions and that no exclusion applies. The right to use Subdivision 66-B is a choice, and the entity must be able to demonstrate that it was made in accordance with the determination.

The determination itself does not contain any penalty provisions. However, the GST Act (which the determination is made under) imposes administrative penalties for incorrect net amounts, false or misleading statements, and failure to keep proper records. If a registered entity incorrectly applies Subdivision 66-B to an acquisition that does not meet the conditions of the determination (or that falls within an exclusion), the entity’s net amount for the relevant tax period will be incorrect. The entity may have understated its GST liability or overstated its input tax credits. The Commissioner of Taxation can issue assessments, impose penalties under Division 284 of the Taxation Administration Act 1953 (which is not part of this instrument but applies generally), and charge shortfall interest and general interest charge. The maximum penalty for a GST shortfall can be up to 75% of the shortfall amount for intentional disregard, 50% for recklessness, and 25% for failure to take reasonable care (section 284-90 of Schedule 1 to the Taxation Administration Act 1953). In addition, the Commissioner has enforcement powers to recover unpaid GST. The determination also carries a risk that an entity might inadvertently treat an acquisition as subject to Subdivision 66-B when it should not, for example by misclassifying goods as falling within the list while they are not. The repeal of the previous No. 31 determination means that entities relying on the old list may be using an expired instrument, leading to potential penalties for relying on an inapplicable determination. The Commissioner may also conduct audits specifically targeting the use of Subdivision 66-B for second-hand goods acquisitions to ensure compliance with the new list and conditions. While the determination is a legislative instrument, its enforcement is entirely through the existing GST compliance framework.

This determination is made under the A New Tax System (Goods and Services Tax) Act 1999, specifically paragraph 66-70(1)(a). It operates within the broader GST framework. Its primary interaction is with Subdivision 66-A of the Act, which provides the ordinary rules for input tax credits on acquisitions of second-hand goods. The determination only applies if Subdivision 66-A would not otherwise apply (subparagraph 6(2)(a) excludes cases where Subdivision 66-A would apply and the consideration exceeds $1,000). In practice, for acquisitions of second-hand goods on the list where the consideration is $1,000 or less, and where Subdivision 66-A would apply (typically from an unregistered supplier), the entity has a choice between Subdivision 66-A and Subdivision 66-B (via this determination). For acquisitions from registered suppliers who quote an ABN and issue a tax invoice, Subdivision 66-A would not apply anyway, so the determination may still be relevant. The determination also interacts with sections 66-45 and 66-50 of the Act, which prescribe how to calculate the GST on the subsequent supply when Subdivision 66-B applies. The definitions in section 195-1 of the Act are imported, including the definition of ‘second-hand goods’, ‘input tax credit’, ‘net amount’, ‘registered’, ‘taxable supply’, ‘taxable importation’, and ‘total Subdivision 66-B credit amount’. The determination is silent on state and territory taxes such as stamp duty, but the margin scheme may affect the cost base for such taxes. It also interacts with the A New Tax System (Goods and Services Tax) Regulations 2019, which may contain further rules about second-hand goods (though not specifically referenced). The repeal of the No. 31 determination means that any transitional issues between the old and new lists are resolved as of the commencement date. The determination does not affect the application of Division 75 of the Act (the margin scheme for real property) or any other margin schemes. It also does not affect the operation of Division 129 (adjusting events) or Division 21 (special rules for second-hand goods). Entities must ensure that their GST returns correctly reflect the choice made under this determination and that they do not double-count input tax credits.

This instrument is a new determination made on 2 September 2025 and is registered on the Federal Register of Legislation. It has no amendment history because it is in its original form. However, it replaces a previous determination that is now repealed. The earlier determination was the A New Tax System (Goods and Services Tax) Act 1999 Rules for Applying Subdivision 66-B Determination (No.31) 2015. That instrument had itself been amended over time (no details provided in the source). By repealing that instrument in full (Schedule 1, item 1), the new determination effectively resets the list of goods for Subdivision 66-B. The new determination may itself be amended in the future, either by a subsequent determination or by legislative amendment. As a legislative instrument made by the Deputy Commissioner of Taxation, it is subject to disallowance by the Parliament, though that is a general feature of all legislative instruments. There is no sunset clause mentioned in the instrument, so it continues in force until repealed or superseded. Any future amendment would likely follow the same procedure and be published on the Federal Register of Legislation. Users of the old No. 31 determination should note that it is no longer effective; compliance must be based on the 2025 determination.

The source text does not refer to any litigation concerning this specific determination. As a newly made instrument (dated 2 September 2025), there is no litigation history attached to it. However, the broader Subdivision 66-B of the Act and its predecessor determinations have been the subject of various administrative and judicial interpretations over the years. Users can consult relevant GST cases on the margin scheme for second-hand goods, but those cases are not cited in the source. The determination is a rul- making instrument, and its validity could be challenged if the Deputy Commissioner exceeded the authority in paragraph 66-70(1)(a) or if the categories in subsection 6(3) are inconsistent with the Act. To date, no such challenge is noted. The repeal of the No. 31 determination may have been intended to update the list in light of changed market conditions or legal interpretations, but no litigation is mentioned.

A number of traps lurk in the determination. The most significant is the $1,000 threshold in paragraph 6(2)(a). If the consideration for the acquisition exceeds $1,000 and Subdivision 66-A would apply apart from the determination, then Subdivision 66-B cannot be used. Subdivision 66-A applies to acquisitions of second-hand goods from unregistered entities or where the supplier does not quote an ABN. So for a second-hand dealer buying a $1,500 antique from a private seller (unregistered), the dealer cannot use the margin scheme, even if the goods are on the list. The dealer must use Subdivision 66-A instead, which gives a smaller input tax credit. The margin scheme is only available for acquisitions of $1,000 or less from such suppliers. A second trap is paragraph 6(2)(b): the supply to the entity was GST-free. If the seller supplies the second-hand goods GST-free (for example, a charity selling donated goods, or a sale of used goods by a non-profit that opted to treat supplies as GST-free under certain provisions), the buyer cannot use Subdivision 66-B. The buyer must check the GST status of the supply at acquisition. Paragraph 6(2)(c) excludes hire: if the goods are supplied by way of hire (e.g., rented equipment) rather than sold, the acquisition is not eligible. Paragraph 6(2)(d) prevents double-dipping: if the entity includes, or will include, the input tax credit for the acquisition in its net amount under normal rules, it cannot also use Subdivision 66-B. This means the entity must choose one method. Paragraph 6(2)(e) catches non-taxable imports: if the entity imports the goods and the importation is not a taxable importation (e.g., because the value is under $1,000 or the goods are GST-free), the entity cannot use Subdivision 66-B. Paragraph 6(2)(f) is subtle: if all or part of the goods (other than by way of taxable supply or taxable importation) are subsequently supplied as a non-taxable supply, the Subdivision does not apply. This could occur if the entity later supplies the goods GST-free (e.g., as part of a GST-free food supply) or as an input-taxed supply. The entity must anticipate the nature of the subsequent supply at the time of acquisition. Another gotcha: the goods list in subsection 6(3) is exhaustive, and the entity must ensure the goods fall within one of the specified categories. For example, ‘bric-a-brac’ (paragraph (f)) is a broad term but may not cover all decorative items; ‘collectable’ (paragraph (j)) may require interpretation. The catch-all for parts, accessories or components of any of the above (paragraph (ao)) is useful but only applies if the parent item is on the list. Also, the list does not include ‘software’ separately - only computer hardware or software (paragraph (m)). The entity must also be careful about mixed acquisitions: if an acquisition includes both listed and unlisted goods, the determination only applies to the listed goods, and the entity must apportion. Finally, the repeal of No. 31 means any compliance system built around the old list must be updated immediately.

To rely on this determination, a registered entity should follow a structured process. Step 1: Confirm that the goods acquired are second-hand goods within the meaning of section 195 1 of the Act. Step 2: Check whether the goods fall within one of the 41 categories listed in subsection 6(3). The list includes subparagraphs (a) to (ao). If the goods are a part, accessory or component of any listed item, they are also covered (paragraph (ao)). Step 3: Ensure the acquisition is for the purposes of sale or exchange (but not for manufacture) in the ordinary course of business (subsection 6(1)(a)). If the entity intends to use the goods as raw materials or inputs for production, the determination does not apply. Step 4: Check that none of the exclusions in subsection 6(2) apply. This is the most critical step. The entity must verify: (a) the consideration is not more than $1,000, or if it is, that Subdivision 66-A would not otherwise apply (i.e., the supplier is registered and quotes an ABN or the acquisition is from a taxable supply); (b) the supply to the entity was not GST-free; (c) the supply was not by way of hire; (d) the entity has not and will not include an input tax credit for the acquisition under ordinary rules; (e) the entity did not import the goods in a non-taxable importation; (f) the entity does not intend to subsequently supply all or part of the goods as a non-taxable supply (other than by way of taxable supply or taxable importation); and (g) Subdivision 66-B does not already apply apart from this determination. Step 5: If all conditions are met, the entity chooses to have Subdivision 66-B apply (subsection 6(1)(b)). This choice must be made at the time of acquisition or in the tax period in which the input tax credit would arise. The entity then adds the input tax credits attributable to the acquisition to its total Subdivision 66-B credit amount. Step 6: When the entity subsequently supplies the goods (by sale or exchange), it works out the GST payable on that supply in accordance with sections 66-45 and 66-50 of the Act, which use the margin scheme calculation. Step 7: Maintain records demonstrating eligibility: the type of goods, the consideration, the GST status of the supply to the entity, the fact that the goods were acquired for resale not manufacture, and the choice made. The repeal of the No. 31 determination means all existing processes referencing the old list must be updated. The entity should also review its GST returns to ensure it has not inadvertently applied the old determination after the commencement date.