Commonwealth Numbered Regulations - Explanatory Statements

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EXCISE AMENDMENT REGULATIONS 2000 (NO. 7) 2000 NO. 365

STATUTORY RULES 2000 No. 365

Issued by the Authority of the Assistant Treasurer

Excise Act 1901

Excise Amendment Regulations 2000 (No. 7)

Section 164 of the Excise Act 1901 (the Excise Act) provides that the Governor-General may make regulations prescribing matters required to give effect to the Act or for the conduct of any business relating to the Excise.

The purpose of the regulations is:

*       to provide a refund of excise duty for microbreweries and in certain circumstances, for fuel oil used for the calcination of bauxite;

*       to provide refunds of excise for certain international organisations and certain of their officials; and

*       to support the Excise Amendment (Compliance Improvement) Act 2000 (the Compliance Improvement Act).

Section 78 of the Excise Act provides that remissions, rebates and refunds of excise duty may be allowed in respect of excisable goods in such circumstances and subject to such conditions and restrictions as are prescribed. Regulation 50 of the Excise Regulations 1925 prescribes the circumstances in which remissions, rebates and refunds of excise duty may be allowed for the purposes of section 78. The Assistant Treasurer announced in June 2000, that arrangements would be made to reimburse a portion of excise duty payable by microbreweries to compensate for the removal of the small business exemption under the now defunct wholesale sales tax regime. The intention of this measure is to preserve the competitive position of microbreweries against larger breweries. The regulation makes arrangements to reimburse a portion of excise duty payable by microbreweries.

For the purposes of this regulation a brewery that is a subsidiary (within the meaning of the Corporations Law) of another brewery, is not legally independent and therefore cannot be a microbrewery. Additionally a brewery cannot be an economically independent microbrewery if its operations are subsidised by another brewery.

The amendment to Regulation 50 (1)(zc) puts beyond doubt that, in the event of an interruption to the supply of natural gas, excise duty would not apply to fuel oil used for the calcination of bauxite.

Section 6 of the International Organisations (Privileges and Immunities) Act 1963 provides authority for international organisations declared by the regulations to be exempt from the payment of some taxes imposed on the purchase of goods and services in Australia, as set out in Item 7 of the First Schedule. Section 6 also provides authority for similar exemptions for officials prescribed by the regulations as high officers of these international organisations, as set out in Part 1 of the Second Schedule. The regulation inserts a new refund circumstance in Subregulation 50(1) to cover goods on which excise duty has been paid for the official use of an international organisation or for the personal use of a high officer of such a declared organisation.

The Compliance Improvement Act amended the Excise Act to strengthen the provisions that regulate the production, dealing, manufacturing and storage of tobacco, in particular, and excisable goods in general. A number of these provisions provide for the imposition of penalties on illicit tobacco leaf based upon a formula specified in the regulations. The regulations provide a formula for calculating the amount of excise duty payable on illicit tobacco leaf

The Compliance Improvement Act also preserves the effect of some regulations relating to the amount of a licence fee which will continue to apply under the new licensing scheme, activities prohibited during periods when the licence is suspended, and the amount of security in relation to a licence to manufacture tobacco and beer under provisions of the Excise Act.

Persons registered or licensed under the Excise Act are not required to apply for manufacturers', dealers', producers' and storage licences under the licensing scheme for the production of, and dealing in, tobacco and for the manufacturing and storage of excisable goods, in order to continue the activities they are currently authorised to conduct. They are however subject to the new rules relating to the conditions of licences. The regulations reflect amendments introduced by the Compliance Improvement Act.

Proposed Regulations 1,2 and 3 and Schedule 1 are taken to have commenced on 1 July 2000. Schedule 1 relates to international organisations and microbreweries. As the purpose of these regulations is to extend the circumstances in which grants and benefits may be paid by the Commonwealth, it is possible to make the provisions with retrospective effect. These proposed regulations will thus not be in breach of section 48(2) of the Acts Interpretation Act 1901 as they are beneficial to affected persons.

The remainder of the regulations commenced on gazettal.