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CUSTOMS AMENDMENT REGULATIONS 2000 (NO. 3) 2000 NO. 93
EXPLANATORY STATEMENTSTATUTORY RULES 2000 No. 93
Issued by the authority of the Minister for Justice and Customs
Customs Act 1901
Customs Amendment Regulations 2000 (No. 3)
Section 270 of the Customs Act 1901 (the Act) provides in part that the Governor-General 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.
The purpose of the Regulations is to make a number of amendments to the refund, rebate and remission (refund) provisions contained in the Customs Regulations 1926 (the Customs Regulations). The Regulations will
* amend. insert, replace and remove some of the refund circumstances;
* insert some new conditions that apply to refund applications;
* reduce the fee payable in respect of refund applications made in an approved form; and
* insert a circumstance where no refund application fee is payable.
Paragraph 163(1)(b) of the Act provides that refunds of duty may be made in such circumstances, and subject to such conditions and restrictions, as are prescribed.
Subsection 163(1 A) of the Act provides that the regulations may prescribe the amount, or the means of determining the amount, of any refund of duty.
A review of the circumstances in which refunds may be made has been conducted. The Regulations give effect to that review by amending and replacing existing refund circumstances. They also remove some circumstances that no longer apply.
The Regulations will insert two new refund circumstances into the Customs Regulations which will allow importers to receive a refund of duty where they donate automotive components and certain passenger motor vehicles to educational institutions.
Currently refund applications can be made in an approved form or transmitted to Customs electronically. The refund application fee payable for applications transmitted electronically is $45.00 (or an amount prescribed) and for applications made in an approved form ie manually the fee is $65.00 (or an amount prescribed). From 17 June 2000 for a period of approximately 3 months applicants will not be able to transmit refund applications electronically to Customs and hence get the benefit of the lower fee. The Regulations will reduce the fee payable on applications made in an approved form to $45.00. Applications will not be able to be transmitted to Customs electronically because the COMPILE computer system which is used to transmit applications to Customs is having a number of systems changes made to it. Fees will revert to the current level only when the electronic option is reintroduced.
The Regulations will also allow parties to certain decisions of the Administrative Appeals Tribunal (AAT) to apply for refunds that become available because of the decision of the AAT without having to pay the relevant refund application fee.
The Regulations will also insert a restriction into the Customs Regulations which prohibits a refund being paid where the application relates to goods that were entered on more than one entry. This restriction was contained in paragraph 163(1B)(a) of the Act. The Customs Legislation Amendment Act (No. 2) 1999 removed that restriction from the Act with the intention that the same restriction be placed in the Customs Regulations. The Regulations will give effect to that intention.
The Regulations other than Schedule 2 commence on gazettal.
Schedule 2 which reduces the fee that has to be paid when a refund application is made on an approved form commence on 17 June 2000.
ATTACHMENT
Customs Amendment Regulations 2000 (No. 3)
Regulation 1 - Name of Regulations
Regulation 1 provides that the regulations are named the "Customs Amendment Regulations 2000 (No. 3)".
Regulation 2 - Commencement
Regulation 2 sets out when the Regulations commence.
Schedule 2 to the Regulations which reduces the fee payable when a person makes a refund application in an approved form will commence on 17 June 2000 (subregulation 2(b) refers).
The Regulations other than Schedule 2 will commence on gazettal (subregulation 2(a) refers).
Regulation 3 - Amendment of Customs Regulations 1926
Regulation 3 provides that Schedules 1 and 2 amend the Customs Regulations 1926 (the Customs Regulations).
Schedule 1 Amendments commencing on gazettal
Item 1 - Subregulation 19(1), table, after item 7
Item 1 inserts two new items into the table in subregulation 19(1) of the Customs Regulations. This table sets out the working days and hours of business of Customs.
New item 7A provides that applications for refunds transmitted manually in the Northern Territory can be lodged on week days (other than public holidays) between 8.00am and 4.30pm.
New item 7B provides that application for refunds transmitted manually outside the Northern Territory can be lodged on week days (other than public holidays) between 8.30am and 5.00pm.
Item 2 - Paragraphs 126(1)(a), (b) and (c)
Item 2 replaces refund circumstances found in paragraphs 126(1)(a), (b) and (c) of the Customs Regulations.
The circumstances currently contained in paragraphs 126(1)(a), (b) and (c) will be amended to reflect modem cargo handling practices. Under the new circumstances an importer will be able to apply for a refund on goods that have:
* deteriorated or been damaged, lost or destroyed after being received at the place of export and before they become subject to the control of Customs (new paragraph 126(1)(a));
* deteriorated or been damaged or destroyed while subject to the control of Customs (new paragraph 126(1)(b)); or
* been lost while subject to the control of Customs or stolen after being received at the place or export and before leaving the control of Customs (new paragraph 126(1)(c)).
Item 3 - Subparagraph 126(1)(da)(i)
Item 3 amends paragraph 126(1)(da) of the Customs Regulations. Paragraph 126(1)(da) currently provides that a refund will be made where:
* the import entry in relation to the goods has been withdrawn;
* duty has been paid on the goods; and
* the goods have not deteriorated, or been lost, destroyed, damaged or pillaged.
Item 3 will amend the first of these conditions to make it clear that the import entry must have been withdrawn under section 71F of the Act before the refund will be made. This will. assist the person claiming a refund in determining where the circumstances in paragraph 126(1)(da) have been satisfied.
Item 4 - Subparagraph 126(1)(da)(iii)
Item 4 amends subparagraph 126(1)(da)(iii) of the Customs Regulations by inserting a reference to paragraph 126(1)(h). This amendment will ensure that where goods are faulty, defective or do not conform to contract specifications the importer of the goods will have to apply for a refund under paragraph 126(1)(h) of the Customs Regulations.
Item 5 - Paragraph 126(1)(fb)
Item 5 omits paragraph 126(1)(fb) of the Customs Regulations. Paragraph 126(1)(fb) sets out a circumstance where a refund may be paid in respect of goods where there has been a decrease or rebate in the price of the relevant goods. The conditions contained in that paragraph are inconsistent in reference to valuation legislation and hence can never be satisfied.
While paragraph 126(1)(fb) will be removed, paragraph 126(1)(g) of the Customs Regulations sets out the refund circumstance under which an importer can apply for a refund where there has been a decrease or rebate in the price of the goods.
Item 6 - Paragraph 126(1)(g)
Item 6 substitutes paragraph 126(1)(g) of the Customs Regulations. Current paragraph 126(1)(g) contains the following conditions:
* the price of the goods was taken into account when determining the customs value of the goods;
* a rebate, or other decrease in price accrues to the importer because the goods were faulty or defective or did not conform to contract specifications; and
A that rebate or decrease was not taken into account when determining the customs value of the goods.
New paragraph 126(1)(g) contains those same three conditions but requires a Collector to be satisfied that those conditions have been met. The conditions have been divided into subparagraphs and clauses to make the paragraph easier to read.
Item 7 - Paragraph 126(1)(ga)
Item 7 omits paragraph 126(1)(ga) of the Customs Regulations. Paragraph 126(1)(ga) sets out a circumstance where a refund may be paid in respect of goods where there has been a decrease or rebate in the price of the relevant goods which accrues to the importer because the goods were faulty, defective or did not conform to the contract specifications. The conditions contained in that paragraph are inconsistent in reference to valuation legislation and hence can never be satisfied.
While paragraph 126(1)(ga) will be removed, paragraph 126(1)(h) of the Customs Regulations sets out the refund circumstance under which an importer can apply for a refund where there has been a decrease or rebate in the price of the goods because the goods were faulty, defective or did not conform to the contract specifications.
Item 8 - Paragraph 126(1)(h)
Item 8 substitutes paragraph 126(1)(h) of the Customs Regulations. Paragraph 126(1)(h) has been amended to provide that the Collector must be satisfied:
* the customs value of the goods has been determined;
* a decrease in the value of the goods that would have resulted in a decrease in the customs value has occurred before the determination because the goods were faulty, defective or did not meet contract specifications;
* the decrease was not taken into account when determining the customs value;
* all reasonable steps have been taken by the importer to obtain redress from the manufacturer or supplier without success; and
* no rebate of, or other decrease in, the price of the goods accrues to the importer in those circumstances set out in paragraph 126(1)(g).
The amendments change the nature of the refund circumstance, so that when determining whether the refund should be made the Collector must be satisfied the various conditions in the refund circumstance occurred.
Further, a new condition has been inserted. In order to be able to claim a refund under this new circumstance a refund should not be paid or be payable under paragraph 126(1)(g) of the Customs Regulations.
Both paragraphs 126(1)(g) and (h) relate to goods where a rebate or other price decrease accrues to the importer because the goods are faulty or defective or do not conform to contract specifications. A refund can be claimed under paragraph 126(1)(h) of the Regulations if the importer has tried to obtain redress from the manufacturer or supplier but has been unsuccessful. If redress has been obtained a refund should be claimed under paragraph 126(1)(g) of the Customs Regulations. This new condition prevents an importer from trying to claim a refund under paragraph 126(1)(h) where they have already received a received a refund under paragraph 126(1)(g).
Item 9 - Paragraph 126(1)(n)
Item 9 omits paragraph 126(1)(n) as the conditions contained in it no longer exist.
Item 10 - Paragraphs 126(1)(t) and (u)
Item 10 omits paragraphs 126(1)(t) and (u) from the Customs Regulations. These circumstances applied to certain goods that were entered for home consumption between 18 October 1994 and 15 August 1995. Applications for refunds under these paragraphs had to be lodged before 15 August 1995 (subregulation 128A(4C) of the Customs Regulations). Since applications can no longer be lodged under these circumstances they will be removed from the Customs Regulations.
Item 11 - Paragraphs 126(1)(x) and (y)
Item 11 substitutes paragraphs 126(1)(x) and (y) of the Customs Regulations. The circumstances currently contained in old paragraphs 126(1)(x) and (y) no longer apply because the time limits contained in the circumstances have expired.
Two new circumstances have been inserted into paragraphs 126(1)(x) and (y). The two new circumstances cover certain automotive goods donated to educational institutions. These circumstances have been inserted to encourage importers of those automotive goods to donate those goods to educational institutions so that they can be used by apprentices and other trainees in their training.
New paragraph 126(1)(x) provides that a person can get a refund of duty that has been paid on a passenger motor vehicle ("PMV") if the PMV:
* was imported solely for testing, evaluation or engineering development;
* was new or unused when it was imported; and
* has been donated to an education institution.
Further, the education institution must undertake to dispose of the PMV only for scrap.
New paragraph 126(1)(y) provides that a person can get a refund of duty that has been paid on an automotive component if the automotive component is donated to an education institution.
Again the education institution must undertake in writing to dispose of the automotive component only for scrap.
New subregulation 126(1 A) of the Customs Regulations contained in Item 12 of Schedule 1 to the Regulations provides that "education institution" has the same meaning as in the Student Assistance Act 1973.
New subregulation 128B(5) of the Customs Regulations contained in Item 33 of Schedule 1 to the Regulations will provide the method of calculating the amount of duty that should be refunded under these two new circumstances.
Item 12 - After subregulation 126(1)
Item 12 contains two new definitions for the purposes of subregulation 126(1).
The first defines "education institution" to have the same meaning as given by the Student Assistance Act 1973. The term "education institution" is found in new paragraphs 126(1)(x) and (y).
The second defines "place of export" to have the same meaning as given by subsection 154(1) of the Act. The term "place of export" is used in new paragraphs 126(1)(a) and (c).
Item 13 - Subregulation 126(3)
Item 13 omits subregulation 126(3) of the Customs Regulations as a consequence of the replacement of paragraphs 126(1)(x) and (y) (Item 11 of Schedule 1 to the Regulations refers).
Item 14 - Paragraph 126A(1)(b)
Item 14 replaces the reference to "section 71F of the Act contained in paragraph 126A(1)(b) of the Customs Regulations with a reference to "subsection 71F(1A)" as a consequence of an amendment that was made to the Act by the Customs Legislation Amendment Act (No. 2) 1999 ("the Amendment Act").
Item 15 - Subregulation 127(1A)
Item 15 omits subregulation 127(1A) of the Customs Regulations as a consequence of the replacement of paragraphs 126(1)(x) and (y) (see Item 11 of Schedule 1 to the Regulations).
Item 16 - Subregulation 127(1B)
Item 16 replaces a reference to "regulation 128AA" with a reference to "subregulation 128AA(1) or (2)" in subregulation 127(1B). This is necessary because the Regulations insert a new paragraph 128AA(3) into the Customs Regulations (Item 28 of Schedule 1 to the Regulations refers).
Item 17 - Subregulations 127(3) and (4)
Item 17 replaces two existing conditions for refunds of duty and inserts two new conditions.
Currently subregulation 127(3) contains two paragraphs. Paragraph (b) relates to paragraphs 126(1)(x) and (y) of the Customs Regulations which are to be replaced as discussed above and hence paragraph 127(3)(b) will be omitted. Current paragraph 127(3)(a) will become subregulation 127(3). The provision have been amended to reflect modem drafting style.
Two new conditions are inserted by new subregulations 127(3A) and (M). These relate to drawbacks and refunds of duty.
The first new condition relates to where a drawback of all the duty paid on the goods has been paid. In such circumstances a refund or remission will not be made.
The second new condition relates to where a drawback of part of the duty paid on the goods has been made. In such circumstances the amount of the drawback will be deducted from the amount of refund or remission.
This Item also replaces the conditions contained in subregulation 127(4) of the Customs Regulations. The current provision applies where there is total refund or remission of duty claimed under paragraphs 126(1)(a), (b), (c) or (d). In those cases the goods must be destroyed under the supervision of an officer or exported. Two changes will be made to the .current provision.
First, the provision no longer needs to apply to claims made under paragraph 126(1)(c) as new paragraph 126(1)(c) relates to goods that have been lost or pillaged, and hence are unable to be destroyed or exported.
Secondly, in relation to those goods covered by 126(1)(a), (b) and (d) the provision has been extended so that if the goods are going to be destroyed they can be either destroyed under the supervision of an officer or after Customs tells the person who made the application that the goods can be destroyed.
Item 18 - Subregulation 127(4A)
Item 18 replaces the reference to subregulation "126(ea)" in subregulation 127(4A) of the Customs Regulations with a reference to "126(1)(ea)". This corrects a misdescribed reference.
Item 19 - After subregulation 127(4A)
Item 19 inserts new subregulation 127(4B) into the Customs Regulations. New subregulation 127(4B) contains a new condition that applies where a total refund or remission of duty is claimed under paragraphs 126(1)(g) and (h) of the Customs Regulations. New subregulation 127(4B) provides that before a total refund or remission will be made the goods must have been:
* destroyed;
* exported; or
* otherwise dealt with as approved by a Collector.
Currently where total refunds or remissions are claimed under other circumstances the goods must be exported or destroyed, no such requirement exists in relation to claims made under paragraphs 126(1)(g) and (h) of the Customs Regulations. This new condition corrects this inconsistency.
New subregulation 127(4B) will also allow an importer to deal with the goods other than by exporting or destroying them. For example, there may be circumstances where importers want to donate faulty or defective goods to charities. In those circumstances if a Collector approves the donation of those goods to a charity a total refund of the duty can be made to the importer. But there may also be circumstances where because of the particular fault or defect in the goods, the goods are dangerous. In such circumstances a Collector could require that the goods either be destroyed or exported to the supplier.
Any decision made under this new subregulation will be reviewable by the AAT, since it is a decision of a Collector in relation to an application for refund, rebate or remission of duty.
Item 20 - Subregulation 127(5)
Item 20 replaces the reference to "regulation 126" with "subregulation 126(1)" in subregulation 127(5). This corrects a misdescribed reference.
Item 21 - Paragraph 128(1)(e)
Item 21 inserts a new condition relating to applications for a refund. An application for a refund will have to state which circumstance under subregulation 126(1) of the Customs Regulations applies to each of the imported goods (new paragraph 128(1)(e)).
New paragraph 128(1)(f) requires that the application be given to a Collector. That condition was formerly found in paragraph 128(1)(e) but has been renumbered to allow the new paragraph 128(1)(e) to be inserted.
Item 22 - After subregulation 128(1)
Item 22 inserts subregulations 128(2), (3) and (4) into the Customs Regulations. These provisions introduce new requirements in respect of applications for refunds.
New subregulation 128(2) provides that an application can only refer to goods if the goods were entered on the same import entry.
New subregulation 128(3) provides that only one circumstance may be stated to apply to particular goods mentioned in a line of a refund application. This will ensure that an applicant must identify the line of goods which the refund application is being made in respect of and must also identify the particular circumstance that applies to that line of goods.
New subregulation 128(4) defines "line" for the purposes of subregulation 128(3). A line in relation to an application, means the part of the application that describes particular goods that have a single tariff classification to which a duty rate applies (whether or not the application describes other goods that have the same tariff classification or another tariff classification).
Where goods are imported into Australia there will be either an entry for warehousing or an entry for home consumption (an import entry). It is possible for an import entry to contain information about a number of different goods imported by the same importer in the same shipment. Each of the different goods is reported to Customs on a line in the import entry.
One refund application can be lodged in relation to a number of goods that were imported on the same import entry. For each line of goods on that import entry only one refund circumstance can be claimed when the refund application is lodged.
It is possible that goods that fall to the same tariff classification under the Customs Tariff Act 1995 can be spread over a number of lines on an import entry, this may be for example they have different prices. It is possible that different refund circumstances apply to those different lines of goods. The definition of "line" in new subregulation 128(4) makes it clear that if the same goods (according to their tariff classification) are on different lines on an import entry and different refund circumstances apply to them they can all be included on the one refund application.
Item 23 - Subregulation 128A(1)
Item 23 replaces a reference to "126(a), (b) or (c)" with "126(1)(a), (b) or (c)" in subregulation 128A(1). This corrects a misdescribed reference.
Item 24 - Subregulation 128A(1), note
Item 24 replaces a reference to "regulation 128AA" with a reference to "subregulation 128AA(1) or (2)" in the note to subregulation 128A(1) of the Customs Regulations. This is as a consequence of a new subregulation 128AA(3) being inserted into the Customs Regulations.
Item 25 - Subregulation 128A(2)
Item 25 replaces a reference to "126(d)" with "126(1)(d)" in subregulation 128A(2) of the Customs Regulation. This corrects a misdescribed reference.
Item 26 - Subregulation 128A(4)
Item 26 replaces a reference to "126(f)" with "126(1)(f)" in subregulation 128A(4) of the Customs Regulations. This corrects a misdescribed reference.
Item 27 - Subregulation 128A(4C)
Item 27 omits subregulation 128A(4C) of the Customs Regulations as a consequence of the omission of paragraphs 126(1)(t) and (u) (Item 10 of Schedule 1 refers).
Item 28 - Regulation 128AA, at the end
Item 28 inserts new subregulation 128AA(3) into the Customs Regulations.
The Amendment Act inserts new paragraph 163(1AD)(b) into the Act. Paragraph 163(1AD)(b) of the Act provides that the regulations may identify circumstances where a person is entitled to a refund, rebate or remission of duty on making an application in respect of which a refund application fee is not payable. New subregulation 128AA(3) identifies one such circumstance.
Under Part XVA of the Act, the CEO can make Tariff Concession Orders (TCOs). Once a TCO is made in respect of goods all importers of those goods are entitled to a concessional rate of duty. Previously, there was a similar scheme in the Act under which Commercial Tariff Concession Orders (CTCOs) could be made. Some CTCOs still exist.
The CEO can revoke TCOs and CTCOs.
When the CEO makes a decision in relation to TCOs or CTCOs people affected by that decision may apply to the Administrative Appeals Tribunal (AAT) to have that decision reviewed. As a result of a decision of the AAT, a TCO or CWO may come into effect with retrospective effect.
In those circumstances, importers will be entitled to apply for a refund. New subregulation 128AA(3) provides where this occurs the parties to the AAT proceeding do not have to pay the refund application fee when they apply for the relevant refund of duty. A person will be a party to a proceeding if they fall within the meaning of paragraph 30(1)(a) or (d) of the Administrative Appeals Tribunal Act 1975.
Item 29 - Subregulation 128B(2)
Item 29 inserts a reference to subregulation 127(4B) into subregulation 128B(2). This is as a consequence of the insertion of new subregulation 127(4B) into the Customs Regulations.
Item 30 - Subregulation 128B(3)
Item 30 removes the references to paragraphs 126(1)(fb) and (ga) in subregulation 128B(3) of the Customs Regulations as it is no longer necessary to provide a method of calculating the amount of refund in those circumstances (items 5 and 7 of Schedule 1 to the Regulations refer).
Item 31 - Subregulation 128B(4)
Item 31 removes the reference to paragraph 126(1)(c) from subregulation 128B(4) of the Customs Regulations as it will no longer be possible to apply for a partial refund of duty under paragraph 126(1)(c) (lost or stolen goods).
Item 32 - Subregulation 128B(4)
Item 32 replaces the formula and the definitions of "A", "B" and "C" in subregulation 128B(4) of the Customs Regulations.
The new formula does not refer to "D" which has been replaced by "B". "B" is redefined to have the same meaning as "D".
New definition 'W' is the same as currently found in subregulation 128B(4).
New definition "B" is the same as currently found in subregulation 128B(4) but the reference to "commercial value" has been changed to "customs value" in order to clarify the definition.
"C" has been redefined to mean the customs value of the goods determined under Division 2 of Part VIII of the Act after they have been affected in the manner mentioned in paragraph 126(1)(a), (b), (d) or (h).
Item 33 - Subregulation 128B(5)
It em 33 replaces subregulation 128B(5) in the Regulations and inserts a new subregulation 128B(6). Old subregulation 128B(5) allowed the Collector to make arrangements with a person to whom a refund of duty was payable to set off that amount of refund against the whole or part of that person's liability for duty. The set off device is not utilised. As such, it the provision will be removed.
New subregulation 128B(5) provides the method of calculating the amount of duty that should be refunded under the circumstances in new paragraphs 126(1)(x) or (y) of the Customs Regulations. These paragraphs cover the donation of certain automotive goods to educational institutions.
The amount that will be refunded is calculated in accordance with the following formula:
A x C-D
B
where
* is the amount of duty paid or payable on the goods;
* is the customs value that the goods had at the port of entry into Australia when the goods were first entered under section 68 of the Act;
* is the assessed value of the goods when they were donated; and
* is any deductible administrative costs or allowable factory cost that would have been payable if the goods were sold instead of being donated and the sale was used as the basis for deter mining the customs value of the goods under Division 2 of Part VII of the Act.
New subregulation 12813(6) defines two terms that are used in new subregulation 128B(5). "Allowable factory cost" has the meaning given by section 153B of the Act and "deductible administrative costs" the meaning given by section 154 of the Act.
Item 34 - Schedule 1A
Item 34 omits Schedule 1A as a consequence of the omission of paragraph 126(1)(t) of the Customs Regulations (see the discussion of item 10 of Schedule 1 of the Regulations). Schedule I A contains a list of Tariff Concession Orders that applied to passenger motor vehicle parts for the purposes of paragraph 126(1)(t).
Schedule 2 - Amendment commencing on 17 June 2000
Item 1 - After regulation 128AB
Item 1 inserts a new regulation 128AC into the Customs Regulations. New regulation 128AC provides that from 17 June 2000 the fee payable on refund applications made in an approved form will be $45.00.
Under the Act, refund applications can be either transmitted to Customs electronically or made in an approved form. The refund application fee for those transmitted electronically is $45.00 (or such other amount as prescribed). The fee for those made in an approved form is $65.00 (or such other amount as prescribed).
From 17 June 2000 applicants will not be able to electronically transmit refund applications to Customs via the COMPILE computer system. As a result applications will be able to get the benefit of paying the lower fee. New regulation 128AC will ensure that from that date a fee of $45.00 will apply to all applications.
Once COMPILE becomes available again for applicants to transmit applications electronically this regulation will be repealed.