A New Tax System (Goods and Services Tax Imposition (Recipients)—General) Act 2005
In ForceCTH
Jurisdiction
Commonwealth
Act Number
3 of 2005
Collection
act
Plain English Summary
2/10 complexity
**What this law does (mechanically)
Starts on 1 July 2005 (section 2).
Imposes the goods and services tax (GST) as a legal tax on the recipient (buyer) of a taxable supply (section 3(1)–(2)).
Limits that imposition to GST that is not a duty of customs or a duty of excise (section 3(2)(b)).
Sets the GST rate at 10% (section 4).
Says the Act does not impose a tax on property belonging to a State; the phrase "property of any kind belonging to a State" is to be read as in section 114 of the Constitution (section 5).
Uses the same meanings for the terms GST law, recipient and taxable supply as the A New Tax System (Goods and Services Tax) Act 1999 (section 3(3)).
Who is affected
Recipients of "taxable supplies" as defined in the GST Act 1999 — typically buyers of goods or services that are subject to GST.
Suppliers who must account for and remit GST under the GST law (the Act itself names the tax and its incidence but relies on the GST Act 1999 for definitions and administrative rules).
State governments as owners of property: the Act expressly does not tax State property (section 5).
Why it matters (practical effects and legal mechanics)
Legal incidence: this Act places the legal liability for GST on recipients of taxable supplies (section 3). In practice suppliers usually collect GST as part of the price and remit it under the GST Act 1999, but the statute here fixes legal incidence on the recipient.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Tax rate: the tax base created and administered under the GST Act 1999 is taxed at 10% under this Act (section 4).
Cross-reference and administration: this short Act does not restate exemptions, input tax credit rules, registration thresholds, or administrative penalties — it relies on the GST Act 1999 for those detailed rules (section 3(3)). That means compliance, credits, and enforcement follow the framework in the GST Act 1999.
Constitutional carve-outs: amounts that are duties of customs or excise are outside this imposition (section 3(2)(b)); property belonging to States is not taxed by this Act (section 5), which limits where the GST can reach and reduces constitutional challenge risk on those points.
Costs, incentives and trade-offs (mechanisms, not judgments)
Who pays: economically, the burden falls on recipients (consumers or businesses), although suppliers typically pass the tax on in prices. The Act makes the recipient the person on whom the tax is "imposed" (section 3).
Administrative burden: because the Act delegates definitions and administration to the GST Act 1999, businesses face the compliance requirements (registration, reporting, record-keeping, remittance) set out in that Act rather than in this short imposition Act (section 3(3)).
Behavioural effects and substitution: applying a 10% tax on taxable supplies affects relative prices between taxed and GST-free supplies; this creates incentives for buyers to substitute to GST-free supplies or for suppliers to reorganise transactions to attract different GST treatment (mechanical effect of a consumption tax).
Revenue vs dispersal: the law converts many small payments on taxable supplies into a general tax revenue stream collected under the GST framework. The Act itself sets incidence and rate; collection mechanics and revenue use are handled elsewhere.
Legal and implementation risk: because the Act is narrowly framed and cross-references the GST Act 1999 and the Constitution, most detailed disputes will turn on definitions and administrative rules in the GST Act 1999 or constitutional interpretation of duties and State property.
Official purpose claim and how the Act implements it
The instrument declares it implements "A New Tax System by imposing the tax payable under the GST law" on recipients (section 3). Mechanically, it does that by (a) naming the tax and fixing its legal incidence on recipients (section 3), (b) setting the rate at 10% (section 4), and (c) excluding customs/excise duties and State property from this imposition (sections 3(2)(b) and 5).
Practical note on reading the Act
This Act is short and sets incidence and rate. To understand who ultimately pays, what supplies are taxable, what credits are available, registration thresholds and enforcement, read it together with the A New Tax System (Goods and Services Tax) Act 1999, because this Act adopts the key terms from that law (section 3(3)).