Re: Rail & the GST.

[mauried@commslab.gov.au (Maurie Daly)]

In article <7i19fs$29a$1@nnrp1.deja.com> Jonathon Kirkby <kirkby.jonathon@fin.gc.ca> writes:
>From: Jonathon Kirkby <kirkby.jonathon@fin.gc.ca>
>Subject: Re: Rail & the GST.
>Date: Thu, 20 May 1999 15:24:47 GMT

>No, hold on, GST doesn't work that way.  The cost to railways of
>their inputs will not go up by 10%.  GST is not a tax on business,
>it's a tax on the final consumer.  GST will be added to each sale in
>the production and distribution chain, but businesses will be able to
>claim a full rebate of the GST they pay on their business purchases -
>ie, a company will pay $1.1m for maintenance services that cost $1m
>before GST, but it'll get a rebate of $100k.  It's the final
>consumer who ends up paying the tax, not businesses. Businesses will
>face some new compliance costs - setting up accounting procedures etc -
>but in general, business (particularly larger businesses) is in favour
>of a GST because the current sales tax system involves a whole bunch of
>different rates and exemptions, and doesn't provide for rebates on
>business inputs and so leads to some tax cascading (ie, tax being
>charged on tax).

>The real GST issues relate to the new tax burden on consumers and
>whether compensation is adequate - but that's not relevant to this
>newsgroup of course.

>JK


Thanks for this explanation.
I must confess that I am somewhat confused as to how this tax works.
In reality though for the case of rail , who is the final consumer who pays 
the tax?
For example , a large component of FVs tonnage is wheat and grain which is 
exported to Japan and other countries , finally made into bread and cereals 
and sold to "the final consumer".
How does the Tax man collect the tax from the final consumer .
Same goes for all coal exports and iron ore .
In every case , the final consumer isnt in this country and cant be compelled 
to pay an Australia Tax.

MD