Customs Amendment Regulation 2012 (No. 5)

Overview

The Customs Amendment Regulation 2012 (No. 5) was enacted to amend the Customs Regulations 1926 and ensure the proper application of the carbon price for non-transport use of Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) through the fuel tax system. This regulation was introduced to address the need for an interim measure that aligns the fuel tax system with the carbon pricing mechanism before its full implementation. The amendment, effective from 1 July 2012 until 30 June 2013, reduces the automatic remission of customs duty for LPG and LNG imported for non-transport use, ensuring that importers pay an equivalent carbon price. The Customs Amendment Regulation 2012 (No. 5) was issued by the Minister for Home Affairs under the authority of the Customs Act 1901 and is compatible with human rights as per the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Customs Amendment Regulation 2012 (No. 5) amends the Customs Regulations 1926 to ensure the correct application of the carbon price for the non-transport use of Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) through the fuel tax system. This amendment applies to importers of LPG and LNG for non-transport use, specifically those who import these goods between 1 July 2012 and 30 June 2013. During this period, the automatic remission of customs duty available for LPG and LNG is reduced to a partial remission, meaning importers must pay customs duty equivalent to the carbon price when these fuels are entered or delivered for home consumption. The regulation reinstates the full automatic remission from 1 July 2013, when non-transport use of LPG and LNG becomes subject to the carbon pricing mechanism. The effect of these amendments is that the carbon price for these fuels is incorporated into the customs duty through a prescribed formula, ensuring an effective carbon price of 6.67 cents per kilogram for LNG and 3.68 cents per litre for LPG. The regulation applies to the Commonwealth of Australia, with no specific exclusions or exemptions mentioned, and is effective for one year as specified.

Key Provisions

The Customs Amendment Regulation 2012 (No. 5) primarily amends the Customs Regulations 1926 to ensure that the carbon price for non-transport use of Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) is correctly applied through the fuel tax system, effective from 1 July 2012 and lasting until 30 June 2013. Under section 270(1) of the Customs Act 1901, this regulation specifies a reduction in the automatic remission of customs duty for LPG and LNG imported for non-transport use during this period. Instead of the full remission, a partial remission is applied, meaning that importers now have to pay customs duty equal to the equivalent carbon price. For LNG, the effective carbon price is 6.67 cents per kilogram, and for LPG, it is 3.68 cents per litre. The regulation reinstates the full automatic remission on LPG and LNG for non-transport use from 1 July 2013 when these fuels become directly subject to the carbon pricing mechanism. The obligations imposed by this regulation on parties and entities include ensuring compliance with the reduced customs duty rates for LPG and LNG imports for non-transport use within the specified period. Importers must calculate the carbon price according to the prescribed formulas and remit the appropriate duty when entering or delivering these fuels into home consumption. This requirement ensures that the carbon price is integrated into the fuel tax system, thereby aligning with the government's policy to internalise the social cost of carbon emissions. Furthermore, importers need to be aware of the transition back to full automatic remission from 1 July 2013, when LPG and LNG for non-transport use become subject to the carbon pricing mechanism. For breaches of the regulations, the Customs Act 1901 provides for various offences and penalties. Section 238 of the Act stipulates that any person who wilfully contravenes a regulation may be liable to a penalty not exceeding 10 penalty units for a minor contravention, or 100 penalty units for a serious contravention. Additionally, section 240 of the Act provides for civil penalties for non-compliance, where a person may be liable to a civil penalty of up to 100 penalty units. The maximum penalty for criminal offences can extend to much higher fines and potential imprisonment, depending on the severity and circumstances of the breach. These provisions ensure that compliance with the amended regulations is strictly enforced, thereby maintaining the integrity of the fuel tax system and the intended carbon pricing mechanism.