A New Tax System (Goods and Services Tax) Act 1999
The A New Tax System (Goods and Services Tax) Act 1999 (GST Act) introduced the Goods and Services Tax (GST) in Australia, effective from 1 July 2000. The GST is a broad-based consumption tax of 10% on most goods, services, and other supplies. The Act imposes GST on taxable supplies (including imports) and provides for input tax credits that allow businesses to claim back GST paid on business inputs, ensuring the tax is borne by final consumers rather than businesses. The Act includes exemptions for basic food, health care, education, childcare, and certain financial supplies. The GST revenue is distributed to the states and territories under the Intergovernmental Agreement on Federal Financial Relations.
Legal area: Tax law establishes the legal framework for the assessment and collection of Commonwealth taxation, including income tax, GST, and administrative penalties.
Year enacted: 1999
Full text: https://www.legislation.gov.au/Details/C1999A00055
Key Provisions
- Section 7-1: GST payable on taxable supplies and taxable importations
- Section 9-5: Taxable supplies (connected with Australia, consideration, enterprise)
- Section 11-5: Input tax credits (entitlement for creditable acquisitions)
- Part 2-4: GST-free supplies (basic food, health, education, childcare)
- Part 2-5: Input-taxed supplies (financial supplies, residential rent)
- Part 3-1: Registration for GST (entities with turnover above $75,000)
- Part 3-5: Tax periods and returns (Business Activity Statement)
Significance
The GST Act introduced Australia’s first broad-based consumption tax, replacing the previous wholesale sales tax. The GST provides a significant and stable revenue base (over $80 billion annually, approximately 15% of total Commonwealth tax revenue). The revenue is distributed to the states and territories, giving them a reliable funding source. The Act’s GST-free treatment of basic food, health, and education reflects equity objectives. The GST has been controversial, with the rate (10%) proving politically difficult to increase despite ongoing calls for tax reform.