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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS AMENDMENT (FUEL TAX REFORM
AND OTHER MEASURES) BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Justice and Customs,
Senator the Honourable Christopher Martin Ellison)
CUSTOMS AMENDMENT (FUEL TAX REFORM AND OTHER MEASURES) BILL
2006
OUTLINE
The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act) to:
a) strengthen Customs control over certain imported goods that are used in the
manufacture of excisable goods; and
b) repeal the customs-related provisions of the fuel penalty surcharge
legislation; and
c) replicate certain provisions of the Spirits Act 1906 (the Spirits Act), which is
to be repealed.
Complementary amendments to the Customs Tariff Act 1995 (the Customs Tariff
Act) are contained in the Customs Tariff Amendment (Fuel Tax Reform And Other
Measures) Bill 2006.
Background
In June 2004, the Treasurer announced reforms that were designed to provide
excise and customs duty relief for a wide range of businesses and households. The
main feature of these reforms was the removal of the effective excise and customs
duty from burner fuels and the replacement of refunds and remissions with the fuel
tax credit system. At that time, it was also decided to conduct a review of the
arrangements that apply to all excisable products (the Review), being alcohol (other
than wine), petroleum products and tobacco and tobacco products. The review was
also to extend to the imported equivalents of excisable goods (excise-equivalent
goods), which are governed by customs legislation including the Customs Act and
the Customs Tariff Act.
Restructure of Schedule 3 to the Customs Tariff Act
One of the main outcomes of the Review is a major restructure of the Schedule to
the Excise Tariff Act 1921 (the Excise Tariff Act) to remove redundant and
unnecessarily complex provisions in the Schedule. Amendments to the Schedule to
the Excise Tariff Act to give effect to this restructure are contained in the Excise
Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006.
Complementary amendments to Schedule 3 to the Customs Tariff Act are contained
in the Customs Tariff Amendment (Fuel Tax Reform and Other Measures) Bill 2006.
Repeal of fuel substitution legislation
Another of the main outcomes of the Review is the replacement of all existing
rebates and subsidies for fuel products, including concessional and free rates of
duty, with a new fuel tax credit scheme. As a consequence, it will be necessary to
repeal the fuel penalty surcharge suite of legislation, including provisions in the
Customs Act, that was introduced in 1997. The relevant provisions in the Customs
Act will be repealed by this Bill. The remainder of the legislation will be repealed by
the Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006.
Page 2 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
Use of excise-equivalent goods in the manufacture of excisable goods
Another of the main outcomes of the Review is the decision to strengthen and clarify
the compliance and other legal arrangements that apply to the use of imported
excise-equivalent goods in the manufacture of excisable goods. Most of the
amendments contained in the Bill deal with the strengthening of the controls over
these goods. For example, the Customs Act will be amended to clarify that the
manufacture of excisable goods may occur in a customs warehouse and to provide
that such manufacture must occur at a place licensed under both customs and
excise legislation. The Customs Act will also be amended to ensure that Customs
control of imported excise-equivalent goods continues until such a time that an
excisable liability has been created under the Excise Act. Other amendments will
deal with issues associated with duty extinguishment and accounting for such goods
to Customs.
There are two broad reasons for the strengthening of Customs control over these
goods at this time. The first is that excise-equivalent goods are high value and
therefore represent a greater likelihood of risk to the revenue, and with more
significant consequences, than other imported goods. The second is that the current
lack of legislative and administrative consistency in the treatment of excise-
equivalent goods for excise manufacture may also potentially exacerbate that risk.
Associated amendments to the Customs Tariff Act to repeal the concessional duty
rates that apply to excise-equivalent goods are contained in the Customs Tariff
Amendment (Fuel Tax Reform and Other Measures) Bill 2006. All excise-equivalent
goods will become dutiable at a rate of customs duty that is equal to the excise duty
payable on their locally manufactured or produced equivalents. However, such duty
will not become payable until the goods are entered for home consumption.
Repeal of the Spirits Act 1906
Finally, another of the main outcomes of the Review is the decision to repeal the
Spirits Act, as most of its provisions are considered outdated and no longer relevant
to the effective management of Australia's alcohol taxation regime. The Spirits Act
will be repealed by the Excise Laws Amendment (Fuel Tax Reform and Other
Measures) Bill 2006.
However, the provisions of the Spirits Act that deal with the maturation period of
certain imported spirits will be inserted in the Customs Act.
FINANCIAL IMPACT STATEMENT
There will be a slight impact on some manufacturers who utilise imported excise
equivalent goods in manufacturing excisable goods. An existing anomaly in the
legislation that has allowed certain manufacturers to use imported excise equivalent
goods to manufacture excisable goods without the imported goods being required to
be warehoused will be removed.
The changes will clarify that that activity must take place at a place licensed under
both customs and excise legislation. Entities that currently do not hold a customs
warehouse licence will incur the normal cost recovery charges associated with
Customs warehouses.
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 3
CUSTOMS AMENDMENT (FUEL TAX REFORM AND OTHER MEASURES) BILL
2006
NOTES ON CLAUSES
Clause 1 Short title
This clause provides for the Bill, when enacted, to be cited as the Customs
1.
Amendment (Fuel Tax Reform and Other Measures) Act 2006.
Clause 2 Commencement
Clause 2 provides that this Act commences on 1 July 2006.
2.
This is the date on which the proposed complementary amendments to the Customs
3.
Tariff Act 1995 (the Customs Tariff), as well as the proposed amendments to the
Excise Act 1901 (the Excise Act) and the Excise Tariff Act 1921 (the Excise Tariff)
that give effect to the Review of the Excise Tariff also commence.
Clause 3 Schedule(s)
This clause is the formal enabling provision for the Schedule to the Bill, providing
4.
that each Act specified in a Schedule is amended in accordance with the applicable
items of the Schedule. In this Bill the Customs Act is being amended.
The clause also provides that the other items of the Schedule have effect according
5.
to their terms. This is a standard enabling clause for transitional, savings and
application items in amending legislation.
Page 4 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
SCHEDULE 1 - Amendments
Customs Act 1901
Items 1, 2 and 4 - Subsection 4(1) (definitions of clean fuel, designated fuel and
marker)
These items amend subsection 4(1) of the Customs Act 1901 (the Customs Act) by
6.
repealing the definitions of clean fuel, designated fuel and marker
These definitions were inserted into the Customs Act for the purposes of the
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customs and excise regime that was designed to address issues associated with fuel
substitution practices. As this regime is being repealed as part of the simplification
of the Schedule to the Excise Tariff Act 1921 (the Excise Tariff), these definitions are
also being repealed.
Item 3 - Subsection 4(1)
This item amends subsection 4(1) of the Customs Act by inserting a new definition of
8.
excise-equivalent goods. These goods will be defined as goods prescribed by the
regulations for the purposes of this definition.
This definition is being inserted for the purposes of new Part VAA of the Customs
9.
Act, which is being inserted by item 14 below. New Part VAA will set out the new
compliance and other legal arrangements applying to the use of excise-equivalent
goods in the manufacture of excisable goods. Excise-equivalent goods are those
imported goods that, if they were produced or manufactured in Australia, would be
classified in the Schedule to the Excise Tariff and subject to excise duty. This
basically covers petroleum products, alcohol, and tobacco and tobacco products.
Excise-equivalent goods are subject to rates of customs duty that are equal to the
rates of excise duty applying to their locally manufactured equivalents. Some are
also subject to ad valorem rates of duty.
It is proposed to prescribe the excise-equivalent goods in the regulations by
10.
reference to their tariff classification under Schedule 3 to the Customs Tariff Act
1995 (the Customs Tariff Act). This is considered the most precise method of
identifying those goods to which the new regime will apply. The relevant tariff
classifications in Chapters 22, 24, 27, 29, 34 and 38 of Schedule 3 to the Customs
Tariff Act will be prescribed.
Items 5 and 6 - Subparagraphs 30(1)(a)(ii) and (iv)
These items amend subparagraphs 30(1)(a)(ii) and (iv) of the Customs Act by
11.
inserting the phrase "and are not excise-equivalent goods". This is a technical
amendment only as a consequence of the new provisions in section 30 dealing with
Customs control over excise-equivalent goods to be inserted by items 7 and 8 below.
These amendments will take excise-equivalent goods out of subparagraphs (ii) and
(iv).
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 5
Item 7 - At the end of paragraph 30(1)(a)
This item amends paragraph 30(1)(a) of the Customs Act by inserting new
12.
subparagraphs (v) and (vi). These new subparagraphs deal with the control of the
Customs (hereinafter referred to as "Customs control") over excise-equivalent goods.
New subparagraph (v) deals with goods that are both excise-equivalent goods and
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examinable food that has been entered for warehousing (dual goods). This
subparagraph provides that the control of the Customs over dual goods continues
until whichever of the events listed in new subsection 30(1A) (to be inserted by item
8 below) happens first. Examinable food in this context refers to alcohol.
New subparagraph (vi) deals with goods that are excise-equivalent goods and are
14.
not examinable food. This subparagraph provides that the control of the Customs
over dual goods continues until whichever of the events listed in new subsection
30(1B) (to be inserted by item 8 below) happens first. This provision will cover
tobacco, tobacco products and petroleum products.
The goods that are intended to be prescribed as excise-equivalent goods are
15.
currently subject to Customs control under the current terms of section 30 of the
Customs Act. However, as excise-equivalent goods will be differentiated from other
imported goods for the purposes of new Part VAA of the Customs Act, it is
necessary to insert specific provisions to deal with Customs control over these
goods. It is also necessary to insert a new point at which Customs control will cease
for excise-equivalent goods that are used in the manufacture of excisable goods.
This will ensure that Customs control over excise-equivalent goods is maintained,
and the revenue protected, up until the final process of the manufacture of excisable
goods.
Item 8 - After subsection 30(1)
This item amends section 30 of the Customs Act by inserting new subsections
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30(1A) and (1B).
New subsection 30(1A) sets out the events for the purposes of new subparagraph
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30(1)(a)(v). The four events in relation to examinable food are:
a) the dual goods are destroyed in accordance with an imported food
inspection advice delivered to the person who has possession of the goods;
b) excisable goods are manufactured and the dual goods are used in that
manufacture;
c) the dual goods are delivered into home consumption in accordance with an
authority to deal or in accordance with a permission under section 69, 70 or
162A; or
d) the dual goods are exported to a place outside Australia.
New subsection 30(1B) sets out the events for the purposes of new subparagraph
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30(1)(a)(vi). The three events in relation to goods that are not examinable food are
the same as those applying to examinable food, with the exception of destruction.
Page 6 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
They are:
a) excisable goods are manufactured and the excise-equivalent goods are
used in that manufacture;
b) the excise-equivalent goods are delivered into home consumption in
accordance with an authority to deal or in accordance with a permission
under section 69, 70 or 162A; or
c) the excise-equivalent goods are exported to a place outside Australia.
Items 9 and 10 - Subsections 71K(1) and 71L(1) and (3)
These items amend subsections 71K(1) and 71L(1) and (3) of the Customs Act by
19.
inserting a reference to new section 105C. New section 105C will insert a new
requirement to provide a return to Customs in relation to excise-equivalent goods
used in the manufacture of excisable goods.
Sections 71K and 71L set out the requirements for making a return to Customs that
20.
is communicated by document, or communicated electronically, including the matters
that must be set out in a return and, in relation to the latter, when the return is taken
to have been communicated to Custom. These amendments will ensure that these
requirements will extend to the return under new section 105C.
Item 11 - Subsection 79(3)
This item amends the Customs Act by inserting the phrase "manufacture of
21.
excisable goods" into subsection 79(3).
Currently, subsection 79(3) (which is in Part V of the Customs Act) provides that a
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warehouse licence granted by the Chief Executive Officer of Customs may authorize
blending or packaging, processing, trading or other activities specified in the licence
to be carried on in the warehouse.
As part of the new arrangements included in new Part VAA of the Customs Act, the
23.
manufacture of excisable goods using excise-equivalent goods can only take place
that is both:
a) a warehouse described in a warehouse licence granted under Part V of
Customs Act; and
b) premises specified in a manufacturer licence granted under the Excise Act
1901 (the Excise Act).
(See new section 105E of the Customs Act, to be inserted by item 14 below.)
Section 33 of the Act makes it an offence for a person to move, alter or interfere with
24.
goods that are subject to Customs control where alteration or interference is not
authorised by or under the Customs Act.
However, subsection 79(3) does not specifically refer to manufacture as one of the
25.
allowable activities that a warehouse licence can authorise to be carried on in a
warehouse. It is, therefore, proposed to amend subsection 79(3) to provide clear
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 7
authority for the manufacture of excisable goods to occur in a warehouse described
in a warehouse licence.
Item 12 - Part VA (heading)
This item amends the Customs Act by repealing and substituting the heading to Part
26.
VA. The current heading refers to "Special provisions relating to customable
beverages", which are defined in section 103 of the Customs Act. However, the
amendments proposed in item 13 below will extend the operation of Part VA beyond
customable beverages. Therefore, the reference to "customable" has been removed
from the heading to Part VA.
Item 13 - At the end of Part VA
This item amends Part VA of the Customs Act by inserting new section 105A.
27.
New section 105A will replicate the provisions of section 11 of the Spirits Act 1906
28.
(the Spirits Act). The Spirits Act is being repealed by the Excise Laws Amendment
(Fuel Tax Reform and Other Measures) Bill 2006, on the basis that most of its
provisions are no longer relevant to the effective management of Australia's alcohol
taxation regime. However, it was considered necessary to retain some of the
requirements in the Spirits Act and these are being re-enacted in customs and
excise related legislation.
New section 105A provides that brandy, whisky or rum imported into Australia must
29.
not be delivered from the control of the Customs unless a Collector is satisfied that it
has been matured by storage in wood for at least 2 years. The current product
standard in the Spirits Act requires a minimum 2-year maturation in wood.
The definitions of brandy, whisky and rum set out in new subsection 105A(2) are
30.
substantially the same as the current definitions of these goods in the Spirits Act.
Item 14 - After Part VA
This item amends the Customs Act by inserting new Part VAA after Part VA. New
31.
Part VAA contains the new compliance and other legal arrangements applying to the
use of excise-equivalent goods in the manufacture of excisable goods and is headed
"Special provisions relating to excise-equivalent goods".
New section 105B
New section 105B of the Customs Act sets out the circumstances in which the import
32.
duty payable on excise-equivalent goods will be extinguished. Subsection 105B(1)
provides that the liability to pay import duty on excise-equivalent goods is
extinguished if:
a) the goods are entered for warehousing; and
b) excisable goods are manufactured and the excise-equivalent goods are
used in that manufacture; and
c) the excise-equivalent goods are subject to the control of the Customs at the
time they are used in that manufacture; and
Page 8 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
d) that manufacture occurs at a place that is both:
i) a warehouse described in a warehouse licence granted under Part V of
the Customs Act; and
ii) premises specified in a manufacturer licence granted under the Excise
Act.
For the purposes of this Explanatory Memorandum, the place described in
paragraph (f) is a "dual-licensed place".
All of these requirements must be satisfied before the import duty on the excise-
33.
equivalent goods is extinguished. If all of the requirements are satisfied, the goods
will be subject to Customs control at all times until excisable goods are
manufactured. This also, in effect, means that no import duty (except for ad valorem
duty on some alcohol and fuel products) will ever be paid on these goods. In
addition, once these goods are used in the manufacture of excisable goods and
become classifiable in the Schedule to the Excise Tariff Act, those goods will
become subject to excise duty and will move immediately into the control of the
Commissioner of Taxation under the Excise Act.
If excise-equivalent goods are entered directly into home consumption prior to being
34.
used in the manufacture of excisable goods, the full rate of import duty will have to
be paid on those goods at that time. This is due to the repeal of items 44 and 67 of
Schedule 4 to the Customs Tariff Act by the Customs Tariff Amendment (Fuel Tax
Reform and Other Measures) Bill 2006. These items granted concessional entry to
excise-equivalent goods at the time they were entered into home consumption where
they were intended for use in the manufacture of excisable goods. However, as part
of the measures designed to improve the protection of the revenue, these
concessional items will be repealed. This will remove the current anomaly whereby
some manufacturers of excisable goods that use excise-equivalent goods in their
manufacturing process will no longer be able to enter their goods for home
consumption and remit their Customs duty liability through items 44 or 67.
Therefore, in order to avoid having to pay import duty on excise-equivalent goods
35.
that are intended for use in the manufacture of excisable goods, the incentive is to
enter such goods for warehousing expeditiously and use them in the manufacture of
excisable goods at a dual licensed place without ever entering them for home
consumption.
Subsection 105B(2) provides that the liability to pay import duty is extinguished at
36.
the time the excisable goods are manufactured.
However, it is only intended to extinguish the equivalent amount of the import duty
37.
that would be payable on excise-equivalent goods if they were excisable goods
produced or manufactured in Australia. Therefore, subsection 105B(2) provides that
subsection (1) does not apply to an amount of duty that is calculated as a
percentage of the value of the excise-equivalent goods because of section 9 of the
Customs Tariff Act. This duty is known as the ad valorem duty. This duty will then
be payable in the circumstances set out in new section 105C of the Customs Act.
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 9
At present, the only excise-equivalent goods that are subject to an ad valorem duty
38.
component are spirituous alcohol products of Chapter 22 of Schedule 3 to the
Customs Tariff Act and a small number of fuel products, for example alkylbenzenes.
New section 105C
New section 105C sets out the circumstances in which a return is to be provided to
39.
Customs in respect of excise-equivalent goods used in the manufacture of excisable
goods.
Subsection 105C(1) provides that section 105C applies where:
40.
a) excisable goods are manufactured within a manufacture period; and
b) excise-equivalent goods are used in that manufacture (whether or not in that
period); and
c) the excise-equivalent goods are subject to the control of the Customs at the
time they are used in that manufacture; and
d) that manufacture occurs at a place that is both:
i) a warehouse described in a warehouse licence granted under Part V of
the Customs Act; and
ii) premises specified in a manufacturer licence granted under the Excise
Act.
Subsection 105C(2) provides that the legal owner of the excise-equivalent goods at
41.
the time they are used in that manufacture must:
a) give Customs a return within 8 days after the end of the manufacture period,
providing particulars in accordance with section 71K or 71L in relation to the
excise-equivalent goods; and
b) at the time when each return is given to Customs, pay any amount of duty
referred to in subsection 105B(3) that is owing at the rate applicable at the
time the excisable goods are manufactured.
It will be an offence, with a penalty of 50 penalty units, to fail to provide the return in
accordance with this section.
The use of the term "legal owner" will override the extended definition of "owner" in
subsection 4(1) of the Customs Act. Only the legal owner of the excise-equivalent
goods at the time they are used in the manufacture of excisable goods will be
required to make the return and pay any ad valorem duty that is owing on the excise-
equivalent goods.
New subsection 105C(3) provides that subsection (2) is an offence of strict liability.
42.
As this offence is designed to ensure the integrity of the regulatory regime applying
to the use of excise-equivalent goods in the manufacture of excisable goods, it is
considered appropriate that this be a strict liability offence. The return is the only
means by which Customs will be able to reconcile the importation of excise-
equivalent goods with their use in the manufacture of excisable goods.
Page 10 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
The ability to reconcile the importation of excise-equivalent goods with their use in
43.
the manufacture of excisable goods is also essential to ensure the protection of the
revenue. Where excise-equivalent goods are not satisfactorily accounted for on a
return, Customs will, under section 35A of the Customs Act, have the ability to
demand an amount equal to the duty that would have been payable on the goods
had they been entered for home consumption. As a result of the repeal of items 44
and 67 of Schedule 4 to the Customs Tariff Act by the Customs Tariff Amendment
(Fuel Tax Reform and Other Measures) Bill 2006, excise-equivalent goods will be
subject to import duty at the same rate of excise duty that would apply to the goods if
they were excisable goods produced or manufactured in Australia.
This new strict liability offence is applied in similar circumstances to the current strict
44.
liability offences in sections 69 and 70 of the Customs Act.
If no excisable goods are manufactured during a manufacture period, no return will
45.
be required to be given.
New subsection 105C(4) provides that, in this section, manufacture period means:
46.
a) a 7-day period beginning on a Monday; or
b) if the regulations prescribe a different period for the purposes of this
definition - that period.
Item 19 below sets out the transitional provisions that apply during the period from
1 July 2006 and the first Monday of July 2006 (3 July 2006).
New subsection 105C(5) provides that if regulations do prescribe such a different
47.
period, the regulations may also prescribe matters of a transitional nature relating to
the change to the different period.
New section 105D - GST matters
New section 105D will ensure that the use of excise-equivalent goods that are still
48.
subject to Customs control in the manufacture of excisable goods will be a taxable
importation and, therefore, subject to GST.
Section 13-5 of the A New Tax System (Goods and Services Tax) Act 1999 (the
49.
GST Act) provides that you make a taxable importation if goods are imported and
you enter them for home consumption (within the meaning of the Customs Act).
However, excise-equivalent goods that are subject to Customs control and are used
in the manufacture of excisable goods will never be entered for home consumption.
Section 114-5 of the GST Act sets out, in a table, the circumstances in which a
taxable importation will be made in respect of imported goods that are not entered
for home consumption. However, the table does not include the circumstance where
excise-equivalent goods that are subject to Customs control are used in the
manufacture of excisable goods.
It is therefore necessary to include provisions in the Customs Act to ensure that the
50.
use of excise-equivalent goods that are still subject to Customs control in the
manufacture of excisable goods is a taxable importation.
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 11
Subsection 105D(1) provides that this section applies if:
51.
a) excise-equivalent goods are entered for warehousing; and
b) excisable goods are manufactured and the excise-equivalent goods are
used in that manufacture; and
c) the excise-equivalent goods are subject to the control of the Customs at the
time they are used in that manufacture.
Subsection 105D(2) provides that for the purposes of the GST Act, the importer of
52.
the excise-equivalent goods is taken to have entered them for home consumption at
the time the excisable goods are manufactured. Therefore, there will be a taxable
importation at that time for the purposes of section 13-5 of the GST Act.
Under regulation 33-15.07 of the A New Tax System (Goods and Services Tax)
53.
Regulations 1999 (the GST Regulations), an approved entity can defer the payment
of the GST on taxable importations until on or before the 21st day after the end of the
month in which the liability arose. Under regulation 33-15.06 of the GST
Regulations, an approved entity must enter goods for home consumption by
computer. However, as previously discussed, excise-equivalent goods that are still
subject to Customs control and are used in the manufacture of excisable goods will
never be entered for home consumption (by computer or otherwise). It is therefore
also necessary to include provisions in the Customs Act to ensure that an approved
entity can defer the payment of GST on taxable importations that occur due to the
use of excise-equivalent goods that are still subject to Customs control in the
manufacture of excisable goods.
New subsection 105D(3) provides that if the importer of excise-equivalent goods is
54.
an approved entity at the time the excisable goods are manufactured, then for the
purposes of the GST Act and GST Regulations, the importer is taken to have
entered the excise-equivalent goods for home consumption by computer at that time.
New subsection 105D(4) inserts the definitions for approved entity and GST
55.
regulations for the purposes of section 105D.
New section 105E - Use of excise-equivalent goods in the manufacture of
excisable goods to occur at a dual-licensed place
New section 105E inserts the new requirement that a person must not use excise-
56.
equivalent goods subject to the control of Customs in the manufacture of excisable
goods unless that manufacture occurs at a place that is both:
a) a warehouse described in a warehouse licence granted under Part V of the
Customs Act; and
b) premises specified in a manufacturer licence granted under the Excise Act.
Item 15 - Subsection 132(1)
This item amends subsection 132(1) of the Customs Act by inserting a reference to
57.
new section 105C.
Page 12 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
Subsection 132(1) sets out the time at which the rate of import duty that is payable
58.
on imported goods is determined. However, new section 105C sets out this time for
excise-equivalent goods that are used in the manufacture of excisable goods.
Therefore, the amendment to subsection 132(1) will make that subsection subject to
new section 105C.
Item 16 - Subsection 234(2B)
This item amends subsection 234(2B) of the Customs Act by inserting a reference to
59.
new section 105C.
Subsection 234(1) of the Customs Act contains various offences, including the
60.
offences of making a false or misleading statement to an officer or omitting from a
statement made to an officer any matter or thing that would make the statement
misleading. These offences are contained in paragraph 234(1)(d).
Subsection 234(2B) is a technical provision for the purposes of paragraph 234(1)(d)
61.
such that the electronic communications that are listed in subsection (2B), when
communicated to Customs, are treated as a statement made to the Chief Executive
Officer of Customs (the CEO).
The purpose of this amendment is to extend the technical provision to the new return
62.
under new section 105C of the Customs Act. When the new electronic return is
communicated to Customs, it will also be treated as a statement to the CEO.
Item 17 - Subsections 234(4A) to (8)
This item amends section 234 of the Customs Act by repealing subsection (4A) to
63.
(8).
These subsections set out the customs related offences associated with the customs
64.
and excise regime that was designed to address issues associated with fuel
substitution practices. As this regime is being repealed as part of the simplification
of the Schedule to the Excise Tariff, these offences are also being repealed.
Item 18 - Paragraph 240(1AA)(a)
This item amends paragraph 240(1AA)(a) of the Customs Act by inserting a
65.
reference to new section 105C.
Subsection 240(1AA) sets out the record keeping requirements for commercial
66.
documents relating to goods that are included in a return given to Customs under
sections 69 and 70. These documents must be kept until the end of the period of
5 years after the giving of the return. This amendment will extend the record keeping
requirements to the new return given under new section 105C of the Customs Act.
Item 19 - Application and transitional provisions
This item sets out the application and transitional provisions for two of the new
67.
provisions governing the use of excise-equivalent goods in the manufacture of
excisable goods.
Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006 Page 13
Subitem 1 provides that new section 105B (extinguishment of duty) and 105D (GST
68.
matters) of the Customs Act apply in relation to the manufacture of excisable goods
that occurs on or after 1 July 2006, where the excise-equivalent goods:
a) are entered for warehousing on or after 1 July 2006; or
b) were entered for warehousing before 1 July 2006 and were in a warehouse
immediately before 1 July 2006.
Therefore, even if excise-equivalent goods were already in a warehouse before
1 July 2006, those sections will still apply to them.
Subitems (2) and (3) set out the application provision in relation to new section 105C
69.
(returns). Subitem (2) provides that the first manufacture period for the purposes of
section 105C is taken to be the period beginning on 1 July 2006 and ending at the
end of 9 July 2006. This provision is necessary because the manufacture period in
section 105C covers a 7 day period beginning on a Monday. However, 1 July 2006
is a Saturday so this provision will include the extra 2 days in the first manufacture
period.
Sub-item (3) provides that section 105C then applies in relation to Monday
70.
10 July 2006 and each later Monday. However, this item is subject to regulations
made for the purposes of the definition of manufacture period, which may alter the
manufacture period.
Page 14 Customs Amendment (Fuel Tax Reform and Other Measures) Bill 2006
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