This Act may be cited as the Goods and Services Tax Amendment Act 1995, and shall be read together with and deemed part of the Goods and Services Tax Act 1985 (hereinafter referred to as the principal Act).

2 Interpretation

(1)

Section 2(1) of the principal Act is amended by inserting, after the definition of the term “fine metal”, the following definition:

“‘Going concern’, in relation to a supplier and a recipient, means the situation where—

“(a)

There is a supply of a taxable activity, or of a part of a taxable activity where that part is capable of separate operation; and

“(b)

All of the goods and services that are necessary for the continued operation of that taxable activity or that part of a taxable activity are supplied to the recipient; and

“(c)

The supplier carries on, or is to carry on, that taxable activity or that part of a taxable activity up to the time of its transfer to the recipient:”.

(2)

Section 2(1) of the principal Act is further amended—

(a)

By omitting from the definition of the term “public authority” the words “corporations, agencies”, and substituting the words “Crown entities, State enterprises”:

(b)

By omitting from the definition of the term “revenue from the Crown” the words “revenue received from the Crown”, and substituting the words “any amount brought to charge from the Crown”.

(3)

Subsection (1) of this section applies with respect to supplies made pursuant to a contract or agreement entered into on or after the date on which this Act receives the Royal assent.

3 Meaning of term “supply”

(1)

Section 5 of the principal Act is amended by repealing subsection (6) (as substituted by section 86 of the Public Finance Act 1989), and substituting the following section:

“(6)

For the purposes of this Act, every public authority is deemed to supply goods and services where, within the meaning of the Public Finance Act 1989, any amount is brought to charge by the public authority as revenue from the Crown for the supply of outputs.”

(2)

Section 5 of the principal Act is further amended—

(a)

By omitting from subsection (6a) the words “carried on by the Ministry of Transport” (as substituted by section 2(1) of the Goods and Services Tax Amendment Act (No. 2) 1993), and substituting the words “carried on by the Land Transport Safety Authority”:

(b)

By omitting from subsection (6b) (as substituted by section 3(1) of the Goods and Services Tax Amendment Act 1993) the words “Ministry of Transport”, and substituting the words “Land Transport Safety Authority”:

(c)

By omitting from subsection (6c) the expression “section 81 of the Electoral Act 1956”, and substituting the expression “section 144 of the Electoral Act 1993”:

(d)

By further omitting from subsection (6c) the expression “the said section 81”, and substituting the expression “the said section 144”.

(3)

Section 5(8) of the principal Act is amended—

(a)

By omitting from paragraph (a)(iii) the expression “(e) and (f)”, and substituting the expression “(f) and (g)”:

(b)

By omitting from paragraph (b)(i)(B) the expression “(e) and (f)”, and substituting the expression “(f) and (g)”:

(c)

By omitting from paragraph (c) the words “New Zealand Racing Authority”, and substituting the words “New Zealand Racing Industry Board”:

(d)

By omitting from paragraph (c)(i) the expression “sections 56 and 57”, and substituting the expression “sections 56, 57, and 57b”:

(e)

By omitting from paragraph (c)(ii) the expression “section 79”, and substituting the expression “sections 79 and 79a”.

(4)

Section 5(8) of the principal Act is further amended by inserting in paragraph (c), after subparagraph (ii), the following subparagraph:

“(iii)

In the case of money placed as a fixed-odds bet registered on any fixed-odds betting system, where the amount is dealt with in terms of section 99e of the Racing Act 1971:”.

(5)

Section 5(9) of the principal Act is amended by adding the words “, and the term ‘fixed-odds betting’ has the same meaning as in Part Va of the Racing Act 1971”.

(6)

The following enactments are consequentially repealed:

(a)

So much of the First Schedule to the Public Finance Act 1989 as relates to section 5 of the Goods and Services Tax Act 1985:

(b)

Section 4(2) of the Goods and Services Tax Amendment Act (No. 2) 1989:

(c)

Section 2(1) of the Goods and Services Tax Amendment Act (No. 2) 1993.

(7)

Subsection (3) of this section applies with respect to supplies made on or after the 1st day of August 1992.

4 Time of supply

Section 9(7) of the principal Act (as added by section 86(1) of the Public Finance Act 1989) is amended by omitting the words “paragraph (b) of”.

5 Value of supply of goods and services

(1)

Section 10 of the principal Act is amended by repealing subsection (10), and substituting the following subsection:

“(10)

Notwithstanding anything in this section, where goods and services are, or are deemed to be, supplied by any public authority pursuant to section 5(6) of this Act, the value of any such supply shall be an amount equal to any amount that is brought to charge as revenue from the Crown for the supply of outputs by the public authority.”

(2)

Section 10(12) of the principal Act is amended—

(a)

By omitting from paragraph (a)(ii) the expression “paragraphs (e) and (f) of section 61g(1)”, and substituting the expression “paragraphs (f) and (g) of section 61g(1)”:

(b)

By omitting from paragraph (b)(i) the expression “paragraphs (d), (e), and (f) of section 61g(1)”, and substituting the expression “paragraphs (d), (f), and (g) of section 61g(1)”:

(c)

By omitting from paragraph (d) the expression “paragraphs (b) and (c) of section 42(1), section 42(2)(b), and paragraphs (b) and (c) of section 61g(1)”, and substituting the expression “paragraphs (b), (c), and (da) of section 42(1), section 42(2)(b), and paragraphs (b), (c), and (e) of section 61g(1)”:

(d)

By inserting in paragraph (e), after the expression “section 97(1)(b)”, the expression “and (ca)”.

(3)

Section 10(12) of the principal Act is further amended by adding the following paragraph:

“(f)

Under section 5(8)(c)(iii) of this Act, the consideration in money shall be deemed to be the amount of money paid to the New Zealand Racing Industry Board under section 99e of the Racing Act 1971.”

(4)

The Public Finance Act 1989 is consequentially amended by repealing so much of the First Schedule as relates to section 10 of the Goods and Services Tax Act 1985.

(5)

Subsection (2) of this section applies with respect to supplies made on or after the 1st day of August 1992.

6 Zero-rating

(1)

Section 11(1) of the principal Act is amended by repealing paragraph (c), and substituting the following paragraph:

“(c)

The supply is—

“(i)

A supply to a registered person of a taxable activity, or part of a taxable activity, that is, or is to be, transferred from the supplier to the recipient as a going concern; and

“(ii)

Agreed by the supplier and the recipient, in writing, to be the supply of a going concern; or”.

(2)

This section applies with respect to supplies made pursuant to a contract or agreement entered into on or after the date on which this Act receives the Royal assent.

7 Requirements for accounting on payments basis

Section 19a(1)(a) of the principal Act is amended by repealing subparagraph (i).

8 Adjustments

(1)

Section 21(3b) of the principal Act (as inserted by section 6 of the Goods and Services Tax Amendment Act 1993 and amended by section YB 1 of the Income Tax Act 1994) is amended by omitting the words “that is exempt from income tax under section CB 12 or reimbursing amount exempt from income tax under section CB 13”, and substituting the words “or reimbursing payment that is exempt from tax under section CB 12”.

(2)

This section is deemed to have come into force on the 1st day of April 1995.

9 Alteration of agreed price in relation to supply mistakenly believed to be of a going concern

(1)

The principal Act is amended by inserting, after section 78d, the following section:

“78e

Where—

“(a)

A supplier and a recipient have agreed in writing that a supply is the supply of a going concern, and accordingly treat the supply as being zero-rated under section 11(1)(c) of this Act; and

“(b)

The contract or agreement for the supply contains no provision for an increase to the agreed price arising in the event that the supply is not zero-rated in accordance with section 11(1)(c) of this Act, or does not otherwise contemplate or provide for the consequences if tax is charged on the supply; and

“(c)

The Commissioner has (without successful objection or appeal) charged tax on the supply at the rate specified in section 8(1) of this Act,—

the amount of tax charged on the supply may be recovered by the supplier from the recipient.”

(2)

This section applies with respect to supplies made pursuant to a contract or agreement entered into on or after the date on which this Act receives the Royal assent.

This Act is administered in the Inland Revenue Department.

Goods and Services Tax Amendment Act 1995