CUSTOMS AMENDMENT REGULATIONS 2002 (NO. 7) 2002 NO. 328

Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS AMENDMENT REGULATIONS 2002 (NO. 7) 2002 NO. 328

EXPLANATORY STATEMENT

STATUTORY RULES 2002 No. 328

Issued by the Authority of the Minister for Justice and Customs

Customs Act 1901

Customs Amendment Regulations 2002 (No. 7)

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.

Subsection 163(1) of the Act provides in part that refunds, rebates and remissions of duty may be made in respect of goods generally or in respect of a class of goods and in such circumstances, and subject to such conditions and restrictions (if any), as are prescribed.

The purpose of the amending Regulations is to amend the Customs Regulations 1926 (the principal Regulations) to allow for the rebate of excise duty paid on fuel oil that has been used in connection with producing steam for certain activities, at a place at which mining operations relating to bauxite or the Bayer beneficiation process for refining bauxite into alumina are undertaken, where natural gas is not available (new paragraph 126(1)(za) refers).

The current rate of excise and customs duty applying to such fuel oil is $0.07557 per litre and an equivalent rebate of duty under the Diesel Fuel Rebate Scheme (DFRS) applies.

In 1999, the Act and the Excise Act 1901 were amended to provide that the DFRS would finish on 30 June 2002. Subsection 4(1) of the Diesel and Alternative Fuels Grants Scheme Act 1999 provided that the Parliament acknowledged that the Commonwealth intended to replace the grants under that Act and the DFRS with an Energy Grants (Credits) Scheme (the EGCS) to start on 1 July 2002 or earlier. With the announcement of the Fuel Tax Inquiry, the sunset date for the DFRS was extended by legislative amendment to 30 June 2003.

The delay in implementation of the EGCS resulted in unintended consequences for certain businesses, involved in generating electricity to be used in mining operations relating to bauxite or alumina, that made decisions based on the original intention to have the EGCS in place by 30 June 2002.

To overcome this effect, item 2 inserts new paragraph 126(l)(za) into the principal Regulations. New paragraph 126(1)(za) allows duty to be refunded on fuel oil that is used in connection with producing steam, at a place where mining operations relating to bauxite or the Bayer beneficiation process for refining bauxite into alumina are undertaken, for:

• generating electricity to be used in mining operations relating to bauxite or alumina; or

• generating electricity for a mining town the existence of which is necessary to allow mining operations relating to bauxite or alumina to take place; or

• use in the Bayer beneficiation process for refining bauxite into alumina in the course of mining operations.

In order to obtain the refund the fuel oil:

• must be delivered for home consumption on or after 1 July 2003; and

• must have been used at a place that is not supplied by natural gas, at which natural gas is not readily available, at which the supply of natural gas has been temporarily interrupted by an event beyond the user's control, or at which the supply is insufficient.

Item 1 makes a technical amendment to subparagraph 126(1)(z)(iii) of the principal Regulations as a result of the additional paragraph that is inserted by item 2.

Item 3 inserts subregulation 126(7) into the principal Regulations. New subregulation 126(7) provides the terms 'mining operations' and 'mining town', which are used in new paragraph 126(1)(za), have the same meanings as in section 164 of the Act, as in force immediately before the commencement of this subregulation.

Details of the amending Regulations are set out in the Attachment.

The amending Regulations commence on gazettal.

0210178B

ATTACHMENT

Customs Amendment Regulations 2002 (No. 7)

Regulation 1 - Name of Regulations

Regulation 1 provides that these Regulations are the Customs Amendment Regulations 2002 (No. 7).

Regulation 2 - Commencement

Regulation 2 provides that the Regulations commence on gazettal.

Regulation 3 - Amendment of Customs Regulations 1926

Regulation 3 provides that Schedule 1 amends the Customs Regulations 1926 (the Regulations).

Schedule 1 - Amendments

Item 1 - Subparagraph 126(1)(z)(iii)

Item 1 replaces "credit." with "credit;" in subparagraph 126(1)(z)(iii) of the principal Regulations as a consequence of the amendments that are made by item 2.

Item 2 - After paragraph 126(1)(z)

Item 2 inserts a new circumstance into subregulation 126(1) of the principal Regulations where Customs duty will be refunded in respect of fuel oil (new paragraph 126(1)(za)).

New paragraph 126(1)(za) allows duty to be refunded on fuel oil that has been used in connection with producing steam, at a place where mining operations relating to bauxite or the Bayer beneficiation process for refining bauxite into alumina are undertaken, for:

• generating electricity to be used in mining operations relating to bauxite or alumina; or

• generating electricity for a mining town the existence of which is necessary to allow mining operations relating to bauxite or alumina to take place; or

• use in the Bayer beneficiation process for refining bauxite into alumina in the course of mining operations.

In order to obtain the refund the fuel oil:

• must be delivered for home consumption on or after 1 July 2003; and

Item 3 - After subregulation 126(6)

Item 3 inserts new subregulation 126(7) into the principal Regulations. New subregulation 126(7) provides that the terms 'mining operations' and 'mining town,' for the purposes of new paragraph 126(1)(za), have the same meanings as in section 164 of the Act, as in force immediately before the commencement of this subregulation.