Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS REGULATIONS (AMENDMENT) 1996 NO. 42

STATUTORY RULES 1996 No. 42

Issued by the authority of the Minister for Small Business and Consumer Affairs

Customs Act 1901

Customs Regulations (Amendment)

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.

These Regulations amend the Customs Regulations (the Regulations) to clarify the refund circumstance prescribed in paragraph 126(1)(r) in relation to duty paid on goods to which a Tariff Concession Order (TCO) applies.

Part XVA of the Act sets out the procedures for the making of TCOs which allow duty free importation of certain goods when it has been established that there are no substitutable goods produced in Australia or that the goods' importation would not have a significant adverse effect on the market for the locally manufactured substitutable goods.

Section 269S of the Act governs the operation of TCOs. In most cases a TCO is taken to have come into force 28 days before the day on which the application for the TCO was lodged (subsection 269S(1) refers). Subsection 269S(2) provides in part that "...a TCO applies in relation to the goods the subject of the TCO that were or are first entered for home consumption on or after the day on which the TCO is taken to have come into force". This provision is intended to confer the benefit of the TCO only upon goods that are entered for home consumption when the TCO is in force.

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

Paragraph 126(1)(r) of the Regulations prescribes a refund circumstance under section 163, which applies where "duty has been paid on goods at a time when a TCO, made in respect of those goods under Part XVA of the Act, is in force or is taken to have come into force". This provision is intended to allow importers who paid duty on goods imported during the time a TCO application is under consideration to obtain a refund of that duty if the TCO application is successful.

The inconsistency in terminology between subsection 269S(2) of the Act (which links the operation of the TCO to the date goods are entered for home consumption) and the refund circumstance in paragraph 126(1)(r) of the Regulations (which links refunds to the time when duty was paid) could result in refunds being paid on goods which were never intended to be eligible for concessional treatment under a TCO. This situation can arise as it is possible for an importer to enter goods for home consumption one or more days before paying the duty on those goods. In some cases a refund of duty might be payable in respect of those goods to an importer who, despite having entered goods for home consumption before a TCO came into force, delayed paying the duty in respect of those goods until after that TCO came into force.

Regulation 2 omits paragraph 126(1)(r) of the Regulations and substitutes a new paragraph (r) which prescribes a refund circumstance where "duty has been paid on goods that were first entered for home consumption at a time when a TCO, made in respect of those goods under Part XVA of the Act, was in force or was taken to have come into force". The amendment adds to the current refund circumstance the requirement that the goods must also be entered for home consumption at a time when a TCO is in force in respect of the goods.

The Regulations commenced on gazettal.