EXPLANATORY STATEMENT
CUSTOMS ACT 1901
CUSTOMS REGULATIONS (AMENDMENT)
STATUTORY RULES 1990 NO. 8
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR LAND TRANSPORT AND SHIPPING SUPPORT FOR AND ON BEHALF OF THE MINISTER OF STATE FOR SCIENCE, CUSTOMS AND SMALL BUSINESS
Section 270 of the Customs Act 1901 (“the Act”) provides in part that “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 or as may be necessary or convenient to be prescribed for giving effect to this 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. Regulations 129-138 inclusive of the Customs Regulations prescribe a regime for the drawback of import duties paid on goods when those goods are exported and not subsequently imported.
The Government announced in May 1988 its decision to continue export concessions via duty drawback arrangements (as a means of promoting further export trade), but with modifications to simplify the scheme, standardise benefits and reduce costs to users.
The Statutory Rules seek to implement the Government’s stated intentions by making a number of amendments to the existing drawback regime contained in regulations 129-138. Details of the Statutory Rules are set out in the Attachment hereto.
The principal elements of the drawback regulation scheme are:
- the application of self-assessment principles to all claims for drawback, which will broaden the base of potential claimants by allowing, in particular, claims for partial drawback, involving in some cases an imputed customs value against which relevant import duty rates might be applied;
and
- new control requirements to restrict drawback claims to the 12 months post-exportation, together with the requirement that prior to exportation notice of intention to claim is given to permit, if required, the examination by Customs of those goods.
(S.R. 18/90)
Attachment
regulation 1: provides for a commencement date for the amendments of 29 January 1990.
regulation 2: amends regulation 129 of the Customs Regulations, as follows:
- paragraph (a) omits paragraph (a) from sub-regulation 129(1) to give effect to the policy that motor vehicles generally, and more specifically second-hand motor vehicles, are to be treated in the same way as other goods. There is thus no distinction made between new and second-hand motor vehicles for the purposes of drawback (see also regulation 3 below).
- paragraph (b) omits the present subregulation 129(3) and substitutes therefor a new subregulation 129(3) which redefines second-hand goods more uniformly.
regulation 3: repeals regulations 130 and 130A of the Customs Regulations as a consequence of the amendments to motor vehicles contained in paragraph (a) of regulation 2 above.
regulation 4: amends paragraph (b) of the definition of “imported goods” in subregulation 131(1) by removing the Minister’s power to exclude a class of goods from the application of the regulations.
• This seldom used power had created uncertainty in the making of investment decisions by industry and had acted as a disincentive to export. Its removal is designed to overcome these problems.
regulation 5: amends regulation 132 of the Customs Regulations by omitting subregulation (1) as a consequence of the amendments made in regulation 4 above.
regulation 6: repeals regulation 133 of the Customs Regulations and substitutes a new regulation 133 which prevents payment of drawback in circumstances where:
- the F.O.B. price of goods at the time of exportation is less than 25% of their customs value at the time of importation (new paragraph 133(1)(a));
• This new paragraph is intended to minimise the exportation of “valueless” goods solely for the purpose of obtaining drawback of import duty paid on such goods, whilst preserving the right to claim drawback on goods which retain their value on exportation, even if the amount claimed as drawback represents an amount greater than the goods’ original customs value (eg. in the textiles, clothing and footwear industry).
- the import duty paid on the goods has been refunded (new paragraphs 133(1)(b) and 133 (2)(a) eg. a control against “double-dipping”);
- after exportation, the goods are relanded in Australia (new paragraphs 133m (c) and 133(2)(b)).
regulation 7: repeals regulations 134, 135, and 136 of the Customs Regulations and substitutes new regulations 134, 135, 136, 136A, and 136B as follows:
New regulation 134: prescribes certain conditions that must be satisfied before drawback is payable in respect of goods generally or “specified goods” as defined in regulation 131:
new subregulation 134(1): specifies conditions generally that have to be met to obtain payment of drawback. Those conditions include:
- the giving of a notice of intention to claim drawback by the owner of the goods (new paragraph 134(1)(a));
- availability of physical and documentary verification of a drawback claim (new paragraphs 134(1)(b) & (c));
- the provision of a claim on an approved form (including relevant statements by the person making the claim) after exportation of the goods and within 12 months of that exportation (new paragraphs 134(1)(d) and (e));
- the amount of the drawback must be at least $50 (new paragraphs 134(1)(f)).
new subregulation 134(2): imposes certain obligations on either a manufacturer or owner of “specified goods” as defined in regulation 131 before drawback is payable.
• The obligation is essentially one requiring Customs to be notified of the intention to either manufacture the goods or subject them to a process or treatment with the goal of then exporting those goods. The purpose of the notice is to facilitate an audit of the goods for determining what part of the final exported product is eligible for drawback. A similar requirement was previously contained in subregulation 134(3).
new subregulation 134(3): allows the Collector to require manufacture, processing or treatment of goods to take place under the supervision of an officer if considered necessary.
new subregulation 134 (4): allows the Comptroller to either exempt an owner from the requirement to lodge a notice of. intention (new paragraph 134(4)(a)) or to approve the payment of drawback notwithstanding a failure to lodge such a notice (new paragraph 134(4)(b)).
New Regulation 135: prescribes the amount of drawback that may be claimed in respect of goods as an amount equal to or less than the amount of import duty paid, which may be calculated in some instances as a proportion of the price paid for the goods by the person who was the owner of the goods upon exportation.
• The latter method of calculating the amount of drawback payable, referred to as “imputation”, is intended particularly (although not exclusively) as an option where the claimant does not know the amount of import duty that was paid on the goods and cannot discover those details because it may reveal price sensitive information which the seller of goods may not wish revealed.
New Regulation 136: incorporates the provisions previously contained in subregulations 134(4), (5) and (6), being a control mechanism whereby the Collector may require goods to be packaged, marked or labelled in a particular manner.
New Regulation 136A: provides that where goods have been imported on more than one occasion and have thereby become entitled to drawback on more than one occasion, the drawback payable is the import duty paid prior to the most recent exportation of the goods.
New Regulation 136B: prevents “double-dipping”, by providing that where a rebate has been paid in respect of goods the subject of a claim for drawback, the amount of drawback payable is to be reduced accordingly.
regulation 8: amends regulation 137 of the Customs Regulations so as to extend the requirement to assist Customs officers beyond the time when a person has submitted a claim for drawback, to when a person has lodged a notice of intention to claim drawback under new paragraph 134(1)(a).
regulation 9: repeals regulation 138 of the Customs Regulations since that provision is now redundant in view of the fact that the new drawback regime only operates post-exportation.
regulation 10: amends the existing regulation 138A of the Customs Regulations, which provides jurisdiction for review by the Administrative Appeals Tribunal, to reflect the reference changes made to the previous drawback regime by the proposed amendments.
regulation 11: prescribes certain transitional provisions in respect of goods imported prior to the commencement of the new drawback scheme. In particular, the regime applying to motor vehicles under existing Regulations 130 and 130A is preserved for such goods imported prior to 29 January 1990.