EXPLANATORY STATEMENT
CEO Determination No. 1 of 2009
Customs Act 1901
Section 153AB of the Customs Act 1901 (the Act) requires customs duty to be paid on an alcoholic beverage according to the labelled alcoholic strength of prescribed alcoholic beverages, even when the actual strength is less than the labelled strength. Section 153AC of the Act provides that the CEO may, in writing, determine rules for working out the percentage by volume of alcohol in a beverage, permitted variations in strength, methods of testing, sampling and analysis.
Background
CEO Determination No. 1 of 2009 (Customs Act (Strength of Alcoholic Beverages) Determination (2009)) sets out the rules for the purposes of section 153AC of the Act. These rules govern the working out of the strength of an imported alcoholic beverage and provides for permitted variations in labelled strength from the actual strength for determining the customs duty payable. It also sets out the permissible methods of testing, sampling and analysis. CEO Determination No. 1 of 2009 replicates some of the rules originally established for the purposes of section 153AC by CEO Determination No. 2 of 2006, and also contains modifications to the original rules.
The main modifications to the original rules are to:
a) specify the type of equipment that must be used to work out the strength of an alcoholic beverage;
b) broaden the range of authorities that can calibrate instruments that are used to work out the strength of an alcoholic beverage. Previously, only independent authorities approved by the National Association of Testing Authorities could calibrate measuring equipment. Under CEO Determination No. 1 of 2009, it will be possible for equipment also to be calibrated by authorities appointed under the National Measurement Act 1960 and persons licensed under State and Territory measurement legislation, hence increasing the number of organisations with the ability to calibrate measuring equipment for the purpose of working out the strength of alcoholic beverages;
c) provide that only certain types of measuring equipment must be calibrated at intervals of one year or less; and
d) remove some of the rules relating to the alcoholic strength of beer which are not relevant in the Customs context.
CEO Determination No. 1 of 2009 mirrors the determination by the Deputy Commissioner of Taxation under the Excise Act 1901 (Excise (Alcoholic strength of excisable beverages) Determination 2009 (No. 1)), which contains similar testing methods, equipment, analysis and results in relation to the payment of excise duty on a locally produced alcoholic beverage.
Paragraphs 1 to 5 of CEO Determination No.1 of 2009 provide, inter alia, that it applies to all alcoholic beverages that are entered for, or delivered into, home consumption on or after its commencement. It also defines the key terms, commencement, and objectives of the instrument.
Paragraph 6 of CEO Determination No. 1 of 2009 requires that the strength of an alcoholic beverage be worked out by analysing a sufficient number of samples of the product. The strength is taken to be the average strength of all samples, expressed as a percentage.
Paragraph 7 of CEO Determination No.1 of 2009 contains the modifications to the original rules, as described above. It provides for the instruments and processes to be used to work out the strength of an alcoholic beverage and the rules for calibration of testing equipment.
Paragraph 8 of CEO Determination No. of 2009 permits variations in alcoholic strength when calculating the customs duty payable on beer, and on alcoholic beverages other than beer.
Instrument
CEO Determination No. 1 of 2009 (Customs Act (Strength of Alcoholic Beverages) Determination (2009)) revokes CEO Determination No. 2 of 2006 (Customs Act (Strength of Alcoholic Beverages) Determination).
Consultation
Prior to the making of CEO Determination No.2 of 2006, Customs and the Australian Taxation Office consulted extensively with people likely to be affected by the instrument, including industry.
Given the minor changes to the rules originally established by CEO Determination No.2 of 2006, and that the modifications to the rules broaden the requirements making compliance easier, it was not considered necessary to consult with industry and other affected parties prior to the making of CEO Determination No. 1 of 2009 (Customs Act (Strength of Alcoholic Beverages) Determination (2009)).
Commencement
The instrument commences on the day after it is registered.