EXPLANATORY STATEMENT
Select Legislative Instrument 2005 No. 241
Subject – ACIS Administration Act 1999
ACIS Administration Amendment Regulations 2005 (No. 1)
The ACIS Administration Act 1999 (the Act) established the Automotive Competitiveness and Investment Scheme (ACIS) as a transitional assistance scheme to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation. ACIS rewards eligible activity by registered participants in the form of duty credits, which are fully tradeable instruments and which can be used to acquit a liability for Customs Duty on eligible automotive imports.
Section 116 of the Act provides that only the Governor-General may make Regulations under the Act.
ACIS was originally scheduled to operate from 2001 until the end of 2005 and the ACIS Administration Regulations 2000 (the Principal Regulations) reflected this fact and did not allow, in certain places, for claims for ACIS credits to be made after 31 December 2005.
In December 2002, the Prime Minister announced the extension of ACIS until the end of 2015. The aim of the proposed amendment to the Principal Regulations is to allow ACIS participants to claim certain ACIS credits, relating to investment in plant and equipment, until ACIS terminates on 31 December 2015.
As permitted under paragraph 18 (2)(a) of the Legislative Instruments Act 2003, consultation was not undertaken with respect to this amendment as it is of a minor machinery nature. Extensive consultations with the automotive industry were conducted in developing ACIS and the Principal Regulations, and also in relation to the extension of ACIS announced in December 2002.
Further details are set out in the Attachment.
ACIS Administration Amendment Regulations 2005 (No. 1)
Regulation 13F Maximum claimable value for allowable plant and equipment
Subregulation 13F(5) of the ACIS Administration Regulations 2000 sets out the maximum claimable value of plant and equipment, where the plant and equipment is acquired by the participant under an operating lease. Subparagraphs 13F(5)(a)(ii) and (b)(ii) currently do not allow claims to be made after 31 December 2005 - the original termination date for the Automotive Competitiveness and Investment Scheme (ACIS). The proposed amendment will extend the period ACIS participants can claim for plant and equipment acquired under an operating lease until 31 December 2015 – the current termination date for ACIS.
Overview
The ACIS Administration Amendment Regulations 2005 (No. 1) amend the ACIS Administration Regulations 2000 to extend the eligibility period for claims related to investment in plant and equipment under the Automotive Competitiveness and Investment Scheme (ACIS). Initially established by the ACIS Administration Act 1999, ACIS was designed as a transitional assistance scheme to support competitive investment and innovation in the Australian automotive industry, fostering sustainable growth amidst trade liberalisation. The scheme operates by providing duty credits to eligible participants for use in acquiting Customs Duty on eligible automotive imports. The Act empowers the Governor-General to make regulations under the Act, as stipulated in Section 116. Following the extension of ACIS until the end of 2015, announced by the Prime Minister in December 2002, these amendments allow ACIS participants to claim certain credits relating to investment in plant and equipment until the scheme's termination on 31 December 2015. The proposed changes, deemed minor machinery, did not necessitate further consultation beyond the extensive consultations already undertaken in developing the original regulations and the scheme's extension.
Scope and Application
The ACIS Administration Act 1999 applies to entities and individuals involved in the automotive industry in Australia, providing a framework for the Automotive Competitiveness and Investment Scheme (ACIS). This Act specifically caters to registered participants who are engaged in activities that warrant recognition through duty credits, which are tradeable instruments used to settle Customs Duty on eligible automotive imports. The legislation aims to foster competitive investment and innovation within the industry, supporting sustainable growth both domestically and internationally amidst trade liberalisation. Geographically, the Act's jurisdiction extends across Australia, providing a national framework for the scheme. The regulations under the Act, particularly the ACIS Administration Amendment Regulations 2005 (No. 1), adjust the scope of the scheme by extending the eligibility period for certain claims related to plant and equipment investments until 31 December 2015, thereby superseding earlier termination dates specified in the Principal Regulations. The Act allows for further refinement and application through subordinate instruments, ensuring adaptability in response to industry needs and policy changes.
Key Provisions
The ACIS Administration Amendment Regulations 2005 (No. 1) focus primarily on extending the eligibility period for claims under the Automotive Competitiveness and Investment Scheme (ACIS) as initially outlined in the ACIS Administration Regulations 2000. Regulation 13F, in particular, amends subregulation 13F(5) to allow ACIS participants to claim certain credits relating to investment in plant and equipment acquired under an operating lease. This amendment extends the period for such claims from the original end date of 31 December 2005 to the new termination date of 31 December 2015, aligning with the scheme's extended operational period.
Parties or entities governed by these regulations must ensure that any claims for duty credits under ACIS related to plant and equipment acquired under an operating lease are submitted within the new timeframe of up to 31 December 2015. This includes keeping accurate records and documentation to substantiate the value of the plant and equipment and the date of acquisition. Additionally, they must adhere to any other requirements specified within the ACIS Administration Regulations 2000 and any subsequent amendments.
Failing to comply with the provisions of these regulations can lead to serious consequences. Under the ACIS Administration Act 1999, penalties for non-compliance or fraudulent claims can be substantial. The maximum penalties include fines and, in severe cases, potential criminal charges. The exact penalties are determined by the nature and severity of the breach but can include significant monetary fines and imprisonment, underscoring the importance of adhering to the regulatory requirements.