EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO 103
CUSTOMS REGULATIONS (AMENDMENT)
ISSUED BY AUTHORITY OF THE MINISTER
OF STATE FOR INDUSTRY, TECHNOLOGY
AND COMMERCE
Statutory Rules 1987 No. 28 amended Schedule 2 to the Excise Regulations to introduce into that Schedule new cases and conditions to permit certain goods liable to duties of customs to be used in the manufacture of excisable goods whilst subject to the control of the Customs as per Section 24 of the Excise Act 1901. One of the new items was item 6, which permits imported manufactured tobacco upon which Customs duty has not been paid to be used with Australian tobacco in the manufacture of excisable tobacco, cigars, cigarettes or snuff.
These Statutory Rules were Gazetted on 27 February 1987. On the same day a notice of intention to propose an alteration to the Excise Tariff Act 1921 was also published in the Gazette to provide for the collection of an additional excise duty on goods mixed pursuant to section 24 of the Excise Act 1901 of an amount equal to the difference (if any) between the amount of Customs duty that would have been payable on the imported product in a mix, if that product had been entered for home consumption under the Customs Act 1901, and the amount of excise duty that would have been payable on that product if it were an excisable product and entered for home consumption under the Excise Act 1901 at the rate applicable to the mixture. As the normal excise duty payable on the mixture would continue to be levied, the purpose of the amendment was to ensure that in the prescribed situations where imported customable goods were permitted to be used in the manufacture of excisable goods, customs duty on the imported component in the mix was not completely foregone.
However, in relation to the new item 6 in Schedule 2, at least one tobacco manufacturer in Australia has been using imported duty paid tobacco in a mixture with Australian tobacco to manufacture cigarettes. The effect has therefore been that a double duty has been paid on the imported component in the mix, as excise duty has been levied in the usual way on the cigarettes upon their entry for home consumption under the Excise Act 1901. The double duty payments have been made since 1 January 1986.
The attached Statutory Rules will provide a mechanism to rebate an amount of duty paid on the imported component in a mix in these situations. The rebate will be equal to the amount that would have been payable on that component had that component been entered for home consumption only under the Excise Act 1901 at the rate applicable to the mixed goods.
The Regulations provide as follows:
Regulation 1 deems the amendments to have commenced on 1 January 1986 (the day that known payments of double duty in prescribed mixing cases commenced)
Regulation 2 inserts a new circumstance in Regulation 126 of the Customs Regulations to provide for a rebate of duty on goods which have been entered under section 68 of “the Act” and wholly used in the manufacture of goods upon which excise duty levied under the Excise Act 1901 has been paid
Regulation 3 repeals Regulation 128C of the Customs Regulations and inserts a new Regulation which provides that the amount of rebate in respect of the new circumstance is to be an amount equivalent to the amount of excise duty that would have been payable on the imported goods if they had been entered for home consumption under the Excise Act 1901 and duty paid at the rate applicable to the manufactured goods when the imported goods were entered for home consumption and duty paid under section 68 of the Customs Act 1901.
As these Regulations confer retrospective benefits, subsection 48(2) of the Acts Interpretation Act 1901 is not offended.