Part IILiability to taxation

An Act relating to the Imposition, Assessment and Collection of a Tax upon the Sale Value of certain Goods manufactured in Australia and applied by the Purchaser to his own use, and for other purposes

Part I—Preliminary

1 Short title [see Note 1]

This Act may be cited as the Sales Tax Assessment Act (No. 4) 1930.

Part II—Liability to taxation

3 Sales tax

Subject to, and in accordance with, the provisions of this Act, the sales tax imposed by the Sales Tax Act (No. 4) 1930 shall be levied and paid upon the sale value of goods which have been manufactured in Australia and sold to a taxpayer who has applied those goods to his own use.

3A Goods deemed to be purchased

(1) Subject to subsection (2), where: (a) goods have been manufactured in Australia by a person for another person (in this subsection referred to as the customer) under an agreement entered into after 20 September 1978; and (b) the goods were manufactured in whole or in part out of materials supplied by the customer; the customer shall, for the purposes of this Act, be deemed to have purchased the goods at the time when the goods were delivered to the customer, or were delivered under an agreement with the customer, to some other person. (2) Where a person has procured the manufacture of goods for a person (in this subsection referred to as the customer) by another person in whole or in part out of materials supplied by the customer, the customer shall be deemed to have purchased the goods when the goods were delivered to the customer, or delivered under an agreement with the customer to some other person, and the person who procured the manufacture of the goods shall be deemed not to have purchased the goods. (3) For the purposes of this section, goods manufactured for a person (in this subsection referred to as the customer) shall be taken to be manufactured in whole or in part out of materials supplied by the customer if the goods are manufactured in whole or in part out of materials: (a) which are supplied by the customer or by another person at the request of, or under an agreement with, the customer; or (b) which the customer has purchased, or agreed to purchase, from the manufacturer. (4) In this section, agreement means any agreement, arrangement or understanding: (a) whether formal or informal; (b) whether express or implied; or (c) whether or not enforceable, or intended to be enforceable, by legal proceedings.

4 Sale value of goods

(1) Subject to subsections (3), (4) and (6) of this section, to section 4A and to subsections (5B) and (5C) of section 18 of the Sales Tax Assessment Act (No. 1) 1930 in their application in accordance with section 12 of this Act, for the purposes of this Act, the sale value of goods purchased by a registered person who has quoted his certificate in respect of those goods, and has applied those goods to his own use shall be the amount for which the goods were so purchased. (2) Where: (a) goods that have been purchased after 20 September 1978 by a registered person who has quoted his certificate in respect of those goods: (i) were manufactured for the purchaser in whole or in part out of materials supplied by the purchaser; (ii) were purchased by the purchaser for an amount that is less than: (A) if the goods are of a class which the person from whom the goods were purchased himself sells by wholesale—the amount for which the goods could reasonably be expected to have been purchased by the purchaser from that person by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length; or (B) in any other case—the amount for which the purchaser could reasonably be expected to have purchased identical goods from a manufacturer if that manufacturer had, in the ordinary course of his business, manufactured the identical goods for sale wholly out of materials purchased in the ordinary course of his business from a person with whom he was dealing at arm’s length and had sold the identical goods to the purchaser by wholesale; and (iii) have been applied by the purchaser to his own use; or (b) goods that have been manufactured in Australia for a person, under an agreement to manufacture the goods entered into after 20 September 1978, in whole or in part out of materials supplied by that person: (i) were deemed by section 3A to have been purchased by the person; and (ii) have been applied by the person to his own use; subsection (3) applies to the goods. (3) Subject to subsection (6), the sale value of goods to which this subsection applies is: (a) where all the relevant materials used in the manufacture of the goods consisted of goods the sale values of which were exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935: (i) if the goods are of a class which the person from whom the goods were purchased, or were deemed to have been purchased, himself sells by wholesale—the amount for which the goods could reasonably be expected to have been purchased by the purchaser from that person by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length; or (ii) in any other case—the amount for which the purchaser could reasonably be expected to have purchased identical goods from a manufacturer if the manufacturer had, in the ordinary course of his business, manufactured the identical goods for sale wholly out of materials purchased in the ordinary course of his business from a person with whom he was dealing at arm’s length and had sold the identical goods to the purchaser by wholesale; (b) where all the relevant materials used in the manufacture of the goods comprised: (i) excluded goods; (ii) goods the sale values of which were not exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935; or (iii) excluded goods and goods referred to in subparagraph (ii); the amount paid by the purchaser in respect of the goods; or (c) in any other case—the sum of: (i) the amount for which the purchaser could reasonably be expected to have purchased by wholesale materials identical in all material respects with the relevant materials used in the manufacture of the goods which consisted of goods the sale values of which were exempt from sales tax by virtue of the Sales Tax (Exemptions and Classifications) Act 1935 from another person who sold by wholesale the materials identical in all material respects with the relevant materials in the ordinary course of his business; and (ii) the amount paid by the purchaser in respect of the goods. (4) Subject to subsection (6), where: (a) goods that have been purchased after 20 September 1978 by a registered person who quoted his certificate in respect of the goods have been applied by the purchaser to his own use; and (b) the goods were manufactured for the purchaser in whole or in part out of materials sold to the manufacturer: (i) by the purchaser; or (ii) by another person who did so at the request of, or under an agreement with, the purchaser; the sale value of the goods, for the purposes of this Act, is: (c) if the goods are of a class which the person from whom the goods were purchased himself sells by wholesale—the amount for which the goods could reasonably be expected to have been purchased by the purchaser from that person by wholesale if all the materials used in the manufacture of the goods had been purchased by the manufacturer in the ordinary course of his business from a person with whom he was dealing at arm’s length; or (d) in any other case—the amount for which the purchaser could reasonably be expected to have purchased identical goods from a manufacturer if the manufacturer had, in the ordinary course of his business, manufactured the identical goods for sale wholly out of materials purchased in the ordinary course of his business from a person with whom he was dealing at arm’s length and had sold the identical goods to the purchaser by wholesale. (5) Where: (a) goods (in this subsection referred to as the relevant goods) that have been purchased after 20 September 1978 by a registered person who quoted his certificate in respect of the goods have been applied by the purchaser to his own use; (b) the Commissioner is satisfied that, having regard to any connection between the vendor and the purchaser of the relevant goods or to any other relevant circumstances (including circumstances arising out of any agreement entered into between the vendor and the purchaser, or out of any other agreement, that was related, directly or indirectly, to the sale of the goods), the vendor and the purchaser were not dealing with each other at arm’s length in relation to the transaction; and (c) the Commissioner is also satisfied: (i) that the amount for which the relevant goods were purchased is less than the amount (in this subsection referred to as the arm’s length price) for which, in the opinion of the Commissioner, the relevant goods could reasonably be expected to have been purchased if the vendor and the purchaser had been dealing with each other at arm’s length in relation to the transaction; or (ii) that: (A) the purchaser could have purchased identical goods from another person by wholesale and obtained delivery of the identical goods at or about the time when the purchaser obtained delivery of the relevant goods; and (B) the amount for which the relevant goods were purchased is less than the amount (in this subsection referred to as the alternative price) for which, in the opinion of the Commissioner, the identical goods could reasonably be expected to have been purchased by the purchaser; the Commissioner shall alter the sale value of the relevant goods to the amount ascertained in accordance with the following paragraphs: (d) if the Commissioner is satisfied as to the matter mentioned in subparagraph (i) of paragraph (c) but not as to the matters mentioned in subparagraph (ii) of that paragraph—an amount equal to the arm’s length price; (e) if the Commissioner is satisfied as to the matters mentioned in subparagraph (ii) of paragraph (c) but not as to the matter mentioned in subparagraph (i) of that paragraph—an amount equal to the alternative price; (f) if the Commissioner is satisfied as to the matter mentioned in subparagraph (i) of paragraph (c) and also as to the matters mentioned in subparagraph (ii) of that paragraph—an amount equal to the lesser of: (i) the arm’s length price; and (ii) the alternative price. (6) Where the Commissioner alters the sale value of goods in pursuance of subsection (5), the sale value so altered shall be the sale value of the goods for the purposes of this Act. (7) For the purposes of this section: (a) goods manufactured for a person (in this subsection referred to as the customer) shall be taken to have been manufactured in whole or in part out of materials supplied by the customer if the goods were manufactured in whole or in part out of materials: (i) which were supplied by the customer or by another person at the request of, or under an agreement with, the customer; or (ii) which the customer purchased, or agreed to purchase, from the manufacturer; and (b) the materials which were so supplied or purchased and were used in the manufacture of the goods shall be taken to have been the relevant materials used in the manufacture of the goods. (8) In this section: (a) a reference to excluded goods shall be read as a reference to goods, including commodities, of a kind referred to in paragraph (a) or (b) of the definition of goods in subsection (1) of section 3 of the Sales Tax Assessment Act (No. 1) 1930 in its application in accordance with section 12 of this Act; and (b) a reference to identical goods shall be read as a reference to goods identical in all material respects with the goods in relation to which the expression is used. (9) In this section, agreement means any agreement, arrangement or understanding: (a) whether formal or informal; (b) whether express or implied; or (c) whether or not enforceable, or intended to be enforceable, by legal proceedings.