Assistant Treasurer, Senator Nick Sherry, has released a consultation paper on reforms to the goods and services tax (GST) financial supply provisions.

The consultation paper provides further information on the following changes announced in the 2010-11 Budget:

• increasing the financial acquisitions threshold (FAT) input tax credit test from $50,000 to $150,000;
• make hire purchase fully taxable;
• allow full input tax credits upfront for small businesses accounting on a cash basis when they enter into hire purchase;
• excluding bank deposit accounts from the current special rules for borrowings;
• expanding the range of expenses qualifying for a reduced input tax credit (RITC); and
• clarifying the language and relationship between the concepts of guarantees and indemnities.

The changes will apply from 1 July 2012.