In the 2010-11 Budget the Government announced that it will amend the financial supply provisions of the GST law to clarify the operation of the legislation and reduce compliance and administrative costs, particularly for many small businesses, with effect from 1 July 2012.
Amendments implementing three of the seven measures agreed to by the Government were contained in Schedule 3 to the Tax Laws Amendment (2011 Measures No. 9) Bill 2011, which was introduced into Parliament on 23 November 2011.
The Assistant Treasurer has now released draft regulations implementing the remaining four measures. These measures are:
- simplifying the treatment of hire purchase transactions by making them fully taxable;
- expanding the range of expenses qualifying for a reduced input tax credit to include superannuation funds providing life insurance products, lenders' mortgage reinsurance and transactional fraud monitoring;
- changes to the reduced input tax credit for trustee and responsible entity services; and
- clarifying the language used in relation to guarantees and indemnities.
The changes are to have effect from 1 July 2012.