EXPLANATORY STATEMENT

Select Legislative Instrument 2006 No. 264

Issued by the Authority of the Minister for Justice and Customs

Customs Act 1901

Customs Amendment Regulations 2006 (No. 4)

Subsection 270(1) of the Customs Act 1901 (the Act) provides in part that the Governor‑General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed for giving effect to the Act.

Section 168 of the Act provides that regulations may make provision for and in relation to allowing drawbacks of duty paid on goods imported into Australia.  Drawback of import duty is paid in specified circumstances where imported goods, on which import duty has been paid, are subsequently exported from Australia.

The purpose of the amending Regulations is to make technical amendments to the provisions of the Customs Regulations 1926 (the Principal Regulations) in order to amend reporting and procedural requirements when claiming the payment of drawback of import duty on imported goods.  In particular, the amending Regulations extend the eligible application period, increase the minimum claim amount, remove the requirement for prior notice of manufacture for export and intention to claim drawback and allow for a new method of calculating drawback.

Details of the amending Regulations are included in the Attachment.

No consultation was undertaken in relation to these amendments as they are of a minor or machinery nature and do not substantially alter existing arrangements.

The amending Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.

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ATTACHMENT

Details of the Customs Amendment Regulations 2006 (no. 4)

Regulation 1 - Name of Regulations

Regulation 1 provides that the amending Regulations are the Customs Amendment Regulations 2006 (No. 4).

Regulation 2 - Commencement

Regulation 2 provides that the amending Regulations commence on the day after they are registered.

Regulation 3 - Amendment of Customs Regulations 1926

Regulation 3 provides that Schedule 1 amends the Customs Regulations 1926 (the Principal Regulations).

Schedule 1 - Amendments

Item 1 - Paragraph 97(1)(c)

Item 1 of Schedule 1 to the amending Regulations amends regulation 97 of the Principal Regulations.  Regulation 97 sets out those goods that must be subject to a formal entry prior to their exportation for the purposes of section 113 of the Act.  Regulation 97 currently includes goods for which a person intends to claim drawback of sales tax under the Sales Tax Administration Act (No.5) 1930.  As sales tax is no longer payable on imported goods under that Act, its reference has been removed from regulation 97.

Item 2 - Subregulations 129(3) and (4)

Item 2 of Schedule 1 to the amending Regulations amends regulation 129 of the Principal Regulations.  Paragraph 129(3)(b) provides that certain films are secondhand goods and, therefore, that drawback of import duty in respect of those goods may be paid.  Subregulation 129(4) defines what a film is for this purpose.  As the duty free rate now applies to films, paragraph 129(3)(b) and subregulation 129(4) have been removed as they are no longer required.

Item 3 - Regulation 134

Item 3 of Schedule 1 to the amending Regulations amends the conditions in regulation 134 of the Principal Regulations which relate to the payment of drawback of import duty.  Regulation 134 sets out conditions including who can make the claim, the time frame for making a claim, the minimum amount that can be claimed, the requirement to give Customs notice of the intention to manufacture goods for exportation, and the intention to claim drawback on such goods. 

The amending Regulations extend the duty drawback application period from 12 months after the day on which the subject goods are exported to 4 years.  This aligns the application period for drawback with that for applications for refunds of Customs duty and for the recovery of Customs duty. 

The amending Regulations also increase the minimum claim amount from $50 to $100.

The amending Regulations also remove the requirement for prior notice of manufacture of goods for export and intention to claim drawback.  In place of actual examination of goods, Customs now relies upon other strategies, including risk management, to monitor and identify non-compliance with the drawback regime.  The amending Regulations also specify that the person who may claim drawback is now the legal owner of the goods at the time of exportation.

The new conditions for claiming the drawback of import duty only apply to goods exported after the amendments take effect.

Item 4 - After subregulation 135(1)

Item 4 of Schedule 1 to the amending Regulations introduce a new method of calculating the amount of drawback.  Regulation 135 of the Principal Regulations provides that the amount of drawback of import duty claimed must not exceed the amount of import duty paid on the goods.  Regulation 135 of the Principal Regulations also makes express provision for certain methods of calculating the amount of drawback of import duty where the amount of import duty is not known by the person making the claim.

The amending Regulations introduce a method which allows the amount of a claim for drawback of import duty to be calculated by reference to a shipment of goods identical to the goods the subject of the claim that were imported by the claimant on a previous occasion (as opposed to the actual shipment of the goods).  For example, exported motor vehicles may be manufactured locally using components which include duty paid imported parts.  The import duty content of each exported motor vehicle may be calculated by reference to another shipment of component parts over a period or a representative value shipment in a period.

Item 5 - Regulation 136

Item 5 of Schedule 1 to the amending Regulations has removed regulation 136 of the Principal Regulations.  Regulation 136 sets out the procedures for the examination of goods to be exported where a notice is given to Customs of an intention to claim drawback on those goods.  As a result of the repeal of the requirement to give notice of an intention to claim drawback in regulation 134, regulation 136 has been repealed as it is no longer required.

Item 6 - Regulation 137

Item 6 of Schedule 1 to the amending Regulations has removed regulation 137 of the Principal Regulations.  Regulation 137 provides for assistance to Customs officers in the examination of goods to be exported where a notice is given to Customs of an intention to claim drawback on those goods.  As a result of the repeal of the requirement to give notice of intention to claim drawback in regulation 134, regulation 137 has been repealed as it is no longer required.

Item 7 - Regulation 138A

Item 7 of Schedule 1 to the amending Regulations amends regulation 138A of the Principal Regulations.  Regulation 138A allows applications to the Administrative Appeals Tribunal for review of decisions of the CEO of Customs, including a decision refusing to exempt an owner from complying with the prior export notification requirement in regulation 134.  As a result of the repeal of the requirement to give notice of intention to claim drawback in regulation 134, regulation 138A has been amended to remove the reference to such decisions.

Item 8 - Subregulation 139(3)

Item 8 of Schedule 1 to the amending Regulations has removed subregulation 139(3) of the Principal Regulations.  Subregulation 139(3) provides that the supervision of prior export notifications under subregulations 134(2) and (3) does not apply in certain instances where claiming a drawback of dumping duty.  As a result of the repeal of subregulations 134(2) and (3), subregulation 139(3) has been repealed as it is no longer required.