Customs Regulations (Amendment) 1995 No. 424
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 424
Issued by the Authority of the Minister for Small Business, Customs and Construction
Customs Act 1901
Customs Regulations (Amendment)
Section 270 of the Customs Act 1901 (the Act) provides in part that..
"(1) 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 ... for giving effect to this Act or for the conduct of business relating to the Customs, ..."
The purpose of the Regulations is to amend the Customs Regulations (the Regulations) to insert new circumstances for the remission of customs duty payable on fuel oil for use in the calcination process for the refining of bauxite into alumina.
Section 163 of the Act provides that remissions, rebates and refunds of customs duty may be allowed in respect of goods in such circumstances, and subject to such conditions and restrictions, as are prescribed. Regulation 126 prescribes the circumstances in which remissions, rebates or refunds of customs duty may be allowed for the purposes of section 163.
The Regulations have been amended to provide a customs duty concession for fuel oil used in the refining of bauxite into alumina in circumstances where refineries are located in areas not presently supplied by natural gas. This amendment is intended to remove a commercial disincentive faced by some alumina producers who do not have access to the cheaper energy source of natural gas.
The Regulations have been amended to insert a new remission circumstance that applies where fuel oil is for use in the calcination process for the refining of bauxite into alumina and the fuel oil is for use at a place that is either not supplied by natural gas or at which natural gas is not readily available.
Regulation 2.1 amends the Regulations by inserting new paragraph 126(1)(v).
New paragraph 126(1)(v) inserts the new remission circumstance in respect of fuel oil that is for use in the calcination process for the refining of bauxite into alumina.
New paragraph 126(1)(v) provides for the remission of excise duty in the circumstance where fuel oil:
(i) is delivered for home consumption in accordance with the permission given under section 69 of the Act; and
(ii) is for use at a place that is either not supplied by natural gas or at which natural gas is not readily available; and
(iii) is for use as a chemical reactant in the calcination part of the Bayer process for the refining bauxite into alumina.
The combination of these factors will limit the application of the remission circumstance to those areas of Australia in which alumina refineries are placed at a commercial disadvantage vis a vis their competitors because they do not have access to natural gas as their energy source.
This remission circumstance is limited to a petroleum product that is delivered in accordance with a permission under section 69 of the Act. Section 69 allows a Collector to give permission for goods to be taken into home consumption without the normal requirements of an entry having to be made in respect of the goods. These permissions facilitate the more manageable reconciliation of one's customs duty liability by effectively permitting one's customs debt to be settled periodically rather than every time excisable goods are moved into home consumption. However, to ensure the concession does not result in an unacceptable risk to the public purse, such permissions are subject to requirements specified in the permission that are necessary for the protection of the revenue or for the purpose of ensuring compliance with the Act. Such requirements include record keeping obligations and audit powers to enable the verification of the movement of goods.
Under this circumstance, the amount of the remission will be 100 percent of the customs duty that is payable on the fuel oil.
This proposed new remission circumstance commenced on the date on which the amending regulations were gazetted.
Overview
The Customs Regulations (Amendment) 1995 No. 424, issued under the authority of the Minister for Small Business, Customs and Construction, aims to address a specific commercial challenge faced by alumina producers in certain regions of Australia. The Customs Act 1901 establishes the legislative framework within which these regulations operate, allowing the Governor-General to make regulations not inconsistent with the Act for giving effect to it. The primary policy objective of these amendments is to provide a customs duty concession for fuel oil used in the calcination process for refining bauxite into alumina, particularly in areas where natural gas is either not available or not readily accessible. This change is intended to mitigate the commercial disadvantage experienced by alumina refineries that lack access to cheaper energy sources, thereby supporting the competitiveness and sustainability of the alumina industry in affected regions.
Scope and Application
The Customs Regulations (Amendment) 1995 No. 424, issued under the authority of the Minister for Small Business, Customs, and Construction, amends the Customs Regulations to provide a new remission of customs duty on fuel oil used in the calcination process for the refining of bauxite into alumina. This amendment applies to fuel oil used in alumina refineries that are located in areas not supplied by natural gas or where natural gas is not readily available, thereby addressing a commercial disadvantage faced by certain producers. The remission applies to fuel oil that is delivered for home consumption in accordance with section 69 of the Customs Act 1901, which allows for the movement of goods into home consumption without the usual entry requirements, provided certain conditions are met to protect the public revenue and ensure compliance with the Act. The remission amount is set at 100 percent of the customs duty payable on the fuel oil. This amendment is intended to provide relief to alumina producers in specific geographic locations, enhancing their competitiveness by reducing the cost of fuel oil as a necessary input in their refining process.
Key Provisions
The Customs Regulations (Amendment) 1995 No. 424 introduces a new remission circumstance under section 126(1)(v) of the Customs Regulations to provide a concession for fuel oil used in the calcination process for the refining of bauxite into alumina. This amendment is intended to address the commercial disadvantage faced by alumina producers in areas not supplied by natural gas. Specifically, this remission applies to fuel oil that is delivered for home consumption under a permission given under section 69 of the Customs Act 1901, and is used at a place where natural gas is not supplied or readily available. This concession is designed to level the playing field for alumina refineries in regions lacking access to cheaper natural gas, thereby supporting the competitiveness of the Australian aluminium industry. The remission allows for a full 100 percent reduction of the customs duty payable on the fuel oil used in this process.
Entities and individuals subject to the Customs Act 1901 and its regulations, particularly those involved in the refining of bauxite into alumina, must comply with the new remission circumstances outlined in the amended Regulations. Alumina refineries located in areas not supplied by natural gas or where natural gas is not readily available must ensure that the fuel oil used in the calcination process qualifies under the new remission circumstance. This involves adhering to the conditions specified in the permission granted under section 69, which includes maintaining proper records and being subject to audits. The permission under section 69 must be obtained from a Collector, who has the authority to grant such permissions subject to conditions necessary for revenue protection and compliance with the Act.
Breach of the requirements under the Customs Act 1901 and the amended Customs Regulations can lead to various civil and criminal consequences. While the explanatory statement does not specify penalties for non-compliance with the new remission circumstance, breaches of the Customs Act can generally result in significant fines and, in severe cases, imprisonment. The Act provides for penalties such as pecuniary penalties for individuals and corporations, and imprisonment terms that vary based on the severity and frequency of the offence. Compliance with the regulations is crucial to avoid these penalties, and failure to meet the conditions of the permission under section 69 or misapplying the remission circumstance could result in enforcement actions by the Australian Customs and Border Protection Service.