2. Meaning of term ``supply''---(1) Section 5 of the principal Act is
 hereby amended by inserting, after subsection (6C), the following
 subsections:

   ``(6D) For the purposes of this Act, where any payment in the nature
 of a grant or subsidy is made on behalf of the Crown or by any public
 authority to---
   ``(a) Any person (not being a public authority) in relation to or in
          respect of that person's taxable activity; or
   ``(b) Any person for the benefit and on behalf of another person in
          relation to or in respect of that other person's taxable
          activity,---

 that payment shall be deemed to be consideration for a supply of goods
 and services by the person to whom or for whose benefit the payment is
 made in the course or furtherance of that person's taxable activity.

   ``(6E) For the purposes of subsection (6D) of this section, the term
 `payment in the nature of a grant or subsidy'---
   ``(a) Includes---
            ``(i) Any suspensory loan or advance, when that loan or
          advance becomes non-repayable by reason of its conditions for
          non-repayment being satisfied; and
            ``(ii) Any payment in the nature of a grant or subsidy of a
          kind that is declared by the Governor-General by Order in
          Council to be a taxable grant or subsidy for the purposes of
          subsection (6D) of this section, being a payment that, but for
          such declaration, would be excluded from this definition by
          virtue of paragraph (b) (ii) of this subsection:
   ``(b) Does not include---
            ``(i) Any payment of a benefit paid under Part I of the
          Social Security Act 1964; or
            ``(ii) Subject to paragraph (a) (ii) of this subsection, any
          other payment made to a person where the payment is for the
          personal use and benefit of the person or, as the case may be,
          a relative (as defined in section 2 of the Income Tax Act 1976)
          of the person; or
            ``(iii) Any payment of a kind that is declared by the
          Governor-General by Order in Council not to be a taxable grant
          or subsidy for the purposes of subsection (6D) of this
          section.''

   (2) Subsection (1) of this section shall be deemed to have come into
 force on the 1st day of October 1986.

   (3) Nothing in this section shall apply to any payment made on behalf
 of the Crown or by any public authority to any person to the extent that
 any objection has, before the 19th day of December 1990, been lodged in
 respect of that particular payment pursuant to Part V of the principal
 Act by a person to whom or on whose behalf the payment was made.