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EXCISE REGULATIONS (AMENDMENT) 1992 NO. 446
EXPLANATORY STATEMENTSTATUTORY RULES 1992 No. 446
Issued by the Authority of the Minister for Small Business, Construction and Customs
Excise Act 1901
Excise Regulations (Amendment)
Section 164 of the Excise Act 1901 (the Act) provides in part that:
"(1) The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed ... for giving effect to this Act or for the conduct of any business relating to the Customs, ..."
The proposed Regulations amend the Excise Regulations (the Regulations) to:
i) give effect to the Government's decision to simplify the system of tax free sales to international travellers ; and
ii) provide a rebate of Customs duty paid on diesel fuel to the purchaser of the fuel where the diesel fuel has been used in the manufacture of explosives;
Duty free goods for international travellers
Section 61D of the Act and regulation 79 of the Regulations govern the control and administration of outwards duty free shops. In particular, subsection 61D(2) of the Act provides a Collector with the ability to grant a permission for goods purchased by international travellers from an outwards duty free shop to be delivered to the traveller personally for export by him or her on the relevant international flight, without the need to make an export entry. Such permission may be subject to conditions prescribed in the Regulations (subsection 61D(5) refers).
Subregulations 79(7) and 79(8) of the Regulations prescribe the conditions to which a permission m respect of goods purchased from off-airport duty free shops and on-airport duty free shops respectively, are subject.
Regulation 4 therefore amends regulation 79 of the Regulations to simplify and reduce the reporting requirements of duty free shop proprietors along similar lines to the recent amendments contained in the Sales Tax Assessment Regulations (Statutory Rules No. of 1992).
Diesel fuel used in the manufacture of explosives
Section 78 of the Act provides that refunds, rebates and remissions of duty may be made in such circumstances and subject to such conditions and restrictions as are prescribed by the Regulations. Regulation 50 prescribes then lists the circumstances in which such refunds, rebates or remissions can be made.
The Government has previously decided that diesel fuel used for a non-fuel purpose should not be subject to duty. One particular use for diesel fuel is as an ingredient in the manufacture of explosives, which is clearly a non-fuel use. To give effect to the Government's decision, whilst ensuring adequate controls over the revenue are maintained, proposed subregulation 3.3 provides for a rebate of Customs duty where a person has purchased diesel fuel which is to be used as an ingredient in the manufacture of explosives.
The Regulations commence on Gazettal, with the exception of regulation 4 which commences on 1 January 1993, which is the date that the equivalent sales tax amendments which are referred to above commence.
The Regulations amend the Excise Regulations as follows:
1. Commencement
Subregulation 1.1 provides that Regulation 4 commences on 1 January 1993, which is the date on which the equivalent sales tax amendments contained in the Sales Tax Assessment Regulations (Statutory Rules No. 365 of 1992) are due to commence.
2. Amendment
Subregulation 2.1 is a formal machinery provision which provides that the Excise Regulations are amended as set out in these Regulations.
3. Regulation 50 (Circumstances under which remissions, rebates and refunds are made)
Subregulation 3.1 effects a technical drafting change to subregulation 50(1) so that the subregulation's purpose is outlined at the beginning rather than at the end as is currently the case.
Subregulation 3.2 effects a technical drafting change to paragraphs 50(1)(a) to (v) as a consequence of the change made by subregulation 3.1 above.
Subregulation 3.3 inserts a new paragraph 50(1)(x) which provides for a rebate of Excise duty where a person has purchased diesel fuel after 1 January 1990 solely for use as an ingredient in the manufacture of explosives. New subparagraph (x)(ii) ensures adequate protection of Commonwealth revenue in that a person be eligible for rebate under this circumstance if they have previously claimed, or intend to claim, any other rebate, remission refund or drawback in relation to that diesel fuel.
Subregulation 3.4 amends subregulation 50(1) as a consequence of the amendment effected by subregulation 3.1.
Subregulation 3.5 effects a technical drafting change to subregulation 50(5) to effectively remove a duplication of the reference "(5)".
Subregulation 3.6 inserts a new subregulation 50(6) as a consequence of the error corrected by subregulation 3.5 above.
4. Regulation 79 (Outwards duty free shops)
Subregulation 4.1 omits paragraph 79(7)(b) as a consequence of the new requirement for the proprietor to record the airline ticket/travel document number on the invoice for the goods rather than the previous situation whereby the proprietor had to make and retain a copy of the ticket or other document (Subregulation 4.7 also refers).
Subregulation 4.2 amends paragraph 79(7)(c) to extend the time within which a traveller may take delivery prior to departure from 10 days prior to departure to 30 days prior to departure. The amendment is intended to allow greater flexibility to travellers when purchasing duty free goods.
Subregulation 4.3 in effect deletes sub-subparagraph 79(7)(d)(ii)(C). The reason for the deletion is that the provision is unnecessary because the traveller's details are on the invoice which is attached to the outside of the package containing the goods.
• Paragraph 79(7)(d) requires duty free goods which are delivered to a relevant traveller to be packaged in a particular manner. Sub-subparagraph 79(7)(d)(ii)(C) had required the name of the relevant traveller to be marked on the outside of the package.
Subregulation 4.4 amends subparagraph 79(7)(d)(iii) to require that the package not simply be transparent, but rather transparent enough for the goods to be easily identified. The amendment is intended to reconcile the conflicting requirements for the package to be scaled and yet for Customs to be able to verify its contents.
Subregulation 4.5 amends paragraph 79(7)(e) so as to restrict the condition imposed by that paragraph to duty free sales which require the goods to be in a sealed package, rather than to duty free sales generally. In effect this means that the conditions in question will apply to any duty free or sales tax free sale to Australian travellers, but will not extend to duty/sales tax free sales to foreign travellers, retail, and diplomatic and consular staff.
The latter sales, being an 'open bag' system rather than 'sealed bag' are more easily audited and reconciled and therefore do not require the same restrictive conditions to be imposed in respect of them.
Subregulation 4.6 amends sub-subparagraph 79(7)(e)(ii)(A) so as to substitute "date" for "day and time" to simplify the process of preparing invoices in respect of relevant goods sold in the duty free shop.
Subregulation 4.7 amends subparagraph 79(7)(e)(ii) to require the addition of a new particular on an invoice prepared in accordance with the condition; being the ticket number or other information confirming an entitlement to the international flight,
Subregulation 4.8 amends sub-subparagraph 79(7)(e)(iii)(A) to make it sufficient to specify the quantity of the goods in figures only. The sub subparagraph is also amended however, to require the total number of items on the invoice to be specified in words, so that there can be no misunderstanding or error in respect of the total quantity specified in the invoice.
Subregulation 4.9 inserts a new sub-subparagraph 79(7)(e)(iii)(C) requiring the inclusion of the total sales value of the relevant items and their quantities, in the invoice.
Subregulation 4.10 amends paragraph 79(7)(g) to reduce the reporting burden on proprietors. That paragraph currently requires the proprietor of a duty free shop to notify a Collector at the relevant airport of departure, of particular information in relation to a sate from the duty free shop to the relevant traveller. The notification must be made not less than 2 hours before the time of departure of the relevant traveller.
The amendment effected by this Subregulation, limits the notification to a case where a Collector has directed the proprietor to provide the information in relation to sales from the duty free shop (new subregulation 79(7A) inserted by Subregulation 4.17 refers).
Subregulation 4.11 further simplifies paragraph 79(7)(g) by omitting the reference to "at the relevant airport of departure" as a consequence of the amendments effected by Subregulation 4.10.
Subregulation 4.12 amends subparagraph 79(7)(g)(iv) to increase the sale value for any item in respect of which a full description is required from $200 to $500 or mote.
Subregulation 4.13 is a technical drafting change to subparagraph 79(7)(j)(ii) as a consequence of the deletion of subparagraph 79(7)(j)(iii) by Subregulation 4.14.
Subregulation 4.14 deletes subparagraph 79(7)(j)(iii) as being too onerous in terms of the time constraints relevant to the passage of packages/ luggage through the airport departure area. The relevant checks are in any case effected elsewhere.
Subregulation 4.15 amends paragraph 79(7)(n) to extend the time within which a 'liability return' must be lodged with Customs from 10 days after the end of each month to 21 days after the end of each month.
• Paragraph 79(7)(n) requires proprietors of duty free shops, not later than the expiration of 10 working days after the end of each month, to submit a so-called 'liability return' to a Collector. This return details the invoices prepared in respect of duty free goods delivered and intended to be exported. In that case the proprietor is required to pay an amount equal to the aggregate of the amounts of customs duty payable in respect of those nonexported goods which are specified in the return.
Subregulation 4.16 redrafts subparagraph 79(7)(n)(ii) in a simpler manner, with no intention to alter its effect as described above.
Subregulation 4.17 inserts a new subregulation (7A) in regulation 79 to limit the notification required by paragraph 79(7)(g) to a case where a Collector has directed the proprietor to provide the information in relation to sales from the duty free shop (see also Subregulation 4.10 above).
Subregulation 4.18 amends paragraph 79(8)(a) to add the requirement that the relevant traveller produce to the proprietor a ticket or other document that is evidence that the person is entitled to make an international flight.
The amendment brings the condition into line with the equivalent off-airport duty free shop condition in paragraph 79(7)(a).
Subregulation 4.19 amends paragraph 79(8)(b) so that the relevant invoice be required to be prepared in duplicate rather than triplicate.
Subregulation 4.20 amends sub-subparagraph 79(8)(b)(ii)(A) to substitute "date" for "day and time" to simplify preparation of the relevant invoice.
Subregulation 4.21 amends sub-subparagraph 79(8)(b)(iii)(A) to make it sufficient to specify the quantity of the goods in figures only.
Subregulation 4.22 inserts a new sub-subparagraph 79(8)(b)(iii)(C) requiring the inclusion of the total sales value of the relevant items and their quantities, in the invoice.
Subregulation 4.23 amends sub-subparagraph 79(8)(c)(i)(A) in the same manner as Subregulation 4.20 previously.
Subregulation 4.24 substitutes a new sub-subparagraph 79(8)(c)(ii)(A) requiring the inclusion of the total sales value of the relevant items and their quantities, in the invoice as per new sub-subparagraph
79(8)(b)(iii)(C) (above (Subregulation 4.22 refers).
Subregulation 4.25 amends sub-subparagraph 79(8)(c)(ii)(B) to make it sufficient to specify the quantity of the goods in figures only.
Subregulation 4.26 deletes paragraphs 79(8)(e) and (f) as a consequence of new subregulations 79(9) and (10) (Subregulation 4.27 refers).
Subregulation 4.27 substitutes two new subregulations 79(9) and (10) as follows:
new subregulation 79(9) provides that in relation to off-airport duty free shops, the prescribed way of providing proof of export of duty free goods in accordance with paragraph 79A(10)(b) of the Act is by providing an electronic record of the invoice numbers of invoices removed from the package of the goods (new paragraph 79(9)(a)) AND
the prescribed time within which the proprietor must provide that proof to the Collector is not later than 2 working days after the day of departure of the relevant traveller from the State or Territory in which the electronic record was created (new subparagraph 79(9)(b)(ii)) or 4 working days after the day of departure of the relevant traveller from any other place in Australia (new subparagraph 79(9)(b)(ii)).
new subregulation 79(10) requires a proprietor to whom new subregulation (9) applies, to produce at the close of business on the last working day of each week, a computer generated document in an approved form listing the invoice numbers created during that week.
'Approved forms' are defined in section 4A of the Act as a form that is approved, by instrument in writing, by the Comptroller. They are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901.
Subregulation 4.28 adds a new subregulation 79(14) requiring relevant travellers to sign a recognition in an approved form, of the traveller's obligations concerning the export of the goods.
5. Application
Subregulation 5.1 provides that the amendment to regulation 50 effected by these Regulations in relation to diesel fuel used solely in the manufacture of explosives is taken to have effect from 1 January 1990, so that eligible claimants do not lose their eligibility by virtue of the 12 month limitation on lodgement of applications which would otherwise apply (regulation 53 refers).