The Assistant Treasurer has released draft legislation for the implementation of three amendments to the GST financial supply provisions with effect from 1 July 2012.

The changes are:

• increasing the financial acquisitions threshold input tax credit test from $50,000 to $150,000;
• allowing small businesses that account on a cash basis to access full input tax credits upfront when they enter into hire purchase arrangements; and
• excluding bank deposit accounts from the current special rules for borrowings.

Australian ADIs who make financial supplies consisting of a borrowing through the provision of deposit accounts will not be able to claim input tax credits for acquisitions that relate to the financial supply consisting of a borrowing, even where the borrowing relates to making supplies that are not input taxed.

Draft regulations to implement the remaining measures will be released for consultation at a later stage.