Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS REGULATIONS (AMENDMENT) 1998 NO. 101

STATUTORY RULES 1998 NO. 101

Issued by the Authority of the Minister for Customs and Consumer Affairs

Customs Act 1901

Customs Regulations (Amendment)

Section 270 of the Customs Act 1901 ("the Act") provides in part that the GovernorGeneral may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed for giving effect to the Act.

Subsection 163(1) of the Act provides that refunds, rebates and remissions of duty may be made "in respect of goods generally or in respect of the goods included in a class of goods" and in "such circumstances, and subject to such conditions and restrictions (if any), as are prescribed..." and subsection 163(1A) provides that the "regulations may prescribe the amount, or the means of determining the amount, of any refund, rebate or remission of duty that may be made for the purposes of subsection (1)." Subsections 163(1C) and (1D), which were repealed and substituted by the Customs Amendment Act (No. 1) 1997 (Act No. 3, 1997), provide for a fee to be payable in respect of a refund application, and authorise the making of regulations which provide for an entitlement to a refund without the need to make an application.

Background

On 1 April 1997 a cost recovery system for import related services (for example, the processing of import entries and refund applications) commenced. The system was introduced by a package of three Acts, the Customs Amendment Act (No 1) 1997, the Import Processing Charges Act 1997 and the Customs Depot Licensing Charges Act 1997. New subsections 163(1C) and (1D) of the Act gave effect to that system in relation to refund applications, which require a $45 charge for refund applications which are submitted by computer system, and $65 in respect of those which are supplied "manually" on an approved form.

It has become clear that this latter provision can operate rather harshly in respect of applications for refunds in respect of goods for which an import entry was not required under paragraphs 68(1)(d), (e) and (f) of the Act. Briefly these are "low-value", goods, such as personal or household effects of passengers or crew (paragraph (d)), goods imported by post of a value of less than $1000 (paragraph (e)) and goods imported other than by post that have a value not exceeding $250 (paragraph (f)).

These low-value goods are exempt from the detailed formal entry in the Act; rather, the amount of duty is self-assessed by the importer (eg often an airline passenger), and often with the assistance of a Collector at the barrier.

Due to the relatively low value of such goods, and therefore the low value of any duty that might be refundable due to an incorrect duty calculation, it will often be the case that the imposition of a processing fee will make it not worth applying for the refund. In such cases it is clear that a refund fee is not appropriate, particularly so if the person in fact received assistance from a Collector.

The Amending Regulations

The purpose of the amending regulations is to redress the above matters. The amendments to the Regulations provide that neither a refund application nor a refund fee is required in respect of the "low-value" goods to which paragraphs 68(1)(d), (e) and (f) of the Act apply. The only procedural requirement which applies is that the person requesting the refund must notify the Collector in writing of the grounds on which the person believes that he or she is entitled to a refund.

The Regulations are explained in greater detail in the Attachment.

The Regulations commenced operation on gazettal.

ATTACHMENT

Regulation 1        Commencement

Subregulation 1.1 provides for the amendment to the Customs Regulations to commence on gazettal.

Regulation 2        Amendment

Subregulation 2.1 provides for the Customs Regulations to be amended as set out in these Regulations.

Regulation 3         Regulation 127 (Conditions for refund, etc of duty)

Subregulation 3.1 inserts new subregulation 127(1B), which provides that a refund application is not required in the circumstance outlined in new Regulation 128AA (as to which see regulation 6 of these Regulations)

Regulation 4       Regulation 128 (Application for refund, rebate or remission of duty)

Subregulation 4.1 provides for existing subregulation 128(2) to be omitted. This provision is relocated as new subregulation 128AA(2) - (as to which see regulation 6 of these Regulations)

Regulation 5        Regulation 128A

Existing Regulation 128A of the Regulations sets time limits for the making of refund applications.

Subregulation 5.1 adds an interpretative note to remind the reader that a refund application is not required in certain circumstances, in which cases no time limits can apply.

*       new regulation 128AA refers (as to which see regulation 6 of these Regulations)

Regulation 6        New Regulation 128AA

Subregulation 6.1 inserts new Regulation 128AA, which prescribes the circumstances in which a refund application is not required.

New Regulation 128AA identifies 2 circumstances in which a refund application is not required, as follows:

New subregulation 128AA(1) provides that no refund application is required (and no application fee payable) where

(a) the goods on which duty has been paid were goods mentioned in paragraph 68(1)(d), (e) or (f) of the Customs Act 1901, and in consequence were not subject of an import entry paragraph (a);

*       Briefly these are "low-value" goods, such as personal or household effects of passengers or crew (paragraph (d)), goods imported by post of a value of less than $1000 (paragraph (e)) and goods imported other than by post that have a value. not exceeding $250 (paragraph f));

(b) the duty was paid through manifest error of fact or patent misconception of the law paragraph (b);

(c) the person tells the Collector, in writing, signed by the person, the grounds on which the person believes he or she is entitled to a refund paragraph (c).

New subregulation 128AA(2) provides that no refund application is required (and no application fee payable) in the circumstance specified in 126(1)(ea) of the Regulations - ie where the refund is payable following AAT review of a decision.

*       this provision is relocated from subregulation 128(2), which is omitted by Regulation 4 of these Regulations.

Subregulation 6.1 adds an interpretative note to remind the reader of the conditions and restrictions that apply in this refund circumstance, and which are already contained in the regulations in subregulation 127(4). In short, by force of this existing provision, the refund circumstance is not available until such time as the review or appeal process is exhausted.