Excise Regulations (Amendment)

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Excise Regulations (Amendment) 1991 No. 383

EXPLANATORY STATEMENT

STATUTORY RULES 1991 No. 383

EXCISE ACT 1901

EXCISE REGULATIONS (AMENDMENT)

ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR SMALL BUSINESS AND CUSTOMS

Section 164 of the Excise 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 or for the conduct of any business relating to the Excise and ..."

The Statutory Rules amend the Excise Regulations ("the Regulations") by inserting a new refund circumstance to enable persons covered by a Status of Forces Agreement (SOFA) to be eligible for a refund of duty on goods used by then, or sold to them.

Background

Section 78 of the Act provides, in part, that refunds of excise duty may be allowed in respect of excisable goods in such circumstances and subject to such conditions and restrictions as are prescribed. Regulation 50 then lists the prescribed circumstances where a refund of excise duty may be obtained.

Item 13(B) of the Excise Tariff Act 1921 currently permits the duty-free entry of excisable goods which are for use by or for sale to persons covered by a Status of Forces Agreement between Australia and another country, as prescribed by Departmental By-Laws. The relevant By-Law, By-Law No. 112 (copy attached) provides that the goods must be for the use of such persons only and are not to be resold in Australia to persons not covered by a SOFA.

•       By-Law 112 was gazetted on 19 November 1991.

British Petroleum (BP) has supplied duty-paid fuel to the United States Navy at Exmouth in Western Australia since 1 July 1989. Some of the fuel is for official government use and some is for use by US Navy personnel who operate under SOFA.

The fuel supplied for the official use of the US Navy is eligible for duty-free entry under Item 13(A) of the Excise Tariff Act 1921 and is therefore eligible for a refund under paragraph 50(1)(u) of the Regulations. The fuel supplied for use by US Navy personnel who operate under SOFA is eligible for duty-free entry under Item 13(B) of the Excise Tariff Act 1921, but previously there was no refund circumstance to enable a refund on this duty-paid fuel.

The regulations remedied this anomaly as follows:

Regulation 1 - Commencement

Subregulation 1.1 provides that the regulations shall be taken to have commenced on 1 July 1989, which was the date when BP first supplied duty-paid fuel to the US Navy at Exmouth.

•       This retrospectivity does not offend sub-section 48(2) of the Acts Interpretation Act 1901 as it confers a benefit upon BP and does not impose any liabilities on any person.

Regulation 2 - Amendment

Subregulation 2.1 is a formal provision which provides that the Excise Regulations are amended as set out in these regulations.

Regulation 3 - Regulation 50 (Circumstances under which remissions, rebates and refunds are made)

Subregulation 3.1 provides for a minor technical amendment to sub-regulation 50(1) by adding 'or' to the end paragraphs 50(1)(a) to 50(1)(t) to ensure subregulation 50(1) conforms with modern drafting style.

Subregulation 3.2 inserts a new refund circumstance to enable a refund of excise duty where duty has been paid on excisable goods which are eligible for duty-free entry under Item 13(B) of the Excise Tariff Act 1921.

EXCISE ACT 1901

EXCISE BY-LAW NO. 112

I, KEITH OWEN STILLING, delegate of the Comptroller-General of Customs, hereby make the following By-law under the Excise Act 1901.

Citation

1.       This By-law may be cited as Excise By-law No. 112.

Commencement

2.       This By-law shall take effect on and from 1 July 1989.

Item 13B of the Schedule to the Excise Tariff Act 1921

3.       Item 13B of the Schedule to the Excise Tariff Act 1921 applies to goods for sale to, or for use by a person covered by an Agreement as specified in that item provided that the goods are for the use of such a person only and are not to be resold in Australia to a person not covered by such an Agreement.

4.       Excise By-law No. 35 is repealed.

Dated this                     day of November 1991.

K.O. STILLING
Delegate of the Comptroller-General of Customs

 

Overview

The Excise Regulations (Amendment) 1991 No. 383, issued under the authority of the Minister of State for Small Business and Customs, was enacted to address a specific anomaly in the eligibility for excise duty refunds. This legislation amends the Excise Regulations to include a new refund circumstance for duty paid on excisable goods that are eligible for duty-free entry under Item 13(B) of the Excise Tariff Act 1921, specifically for persons covered by a Status of Forces Agreement (SOFA). This amendment ensures that such persons, including US Navy personnel, can receive refunds for duty paid on goods intended for their use, thereby correcting a gap in the existing regulatory framework. The policy objective of these amendments is to align the refund circumstances with the duty-free entry provisions, thereby providing consistency and fairness in the treatment of goods used by SOFA-covered persons.

Scope and Application

The Excise Regulations (Amendment) 1991 No. 383, issued under the authority of the Minister of State for Small Business and Customs, amends the Excise Regulations to provide for refunds of excise duty on goods used by or sold to persons covered by a Status of Forces Agreement (SOFA). This change addresses a gap in the refund provisions for excisable goods that were previously eligible for duty-free entry under Item 13(B) of the Excise Tariff Act 1921. The regulations insert a new refund circumstance to allow a refund where duty has been paid on excisable goods that are eligible for duty-free entry under this item. This amendment applies to goods supplied to persons covered by SOFAs and ensures consistency in the treatment of duty-paid goods used by or sold to such persons. The regulations, which commence on 1 July 1989, also include technical amendments to Regulation 50 to align with modern drafting practices. The geographic reach of these regulations is national, as they apply across Australia and are relevant to any transactions involving excisable goods and persons covered by a SOFA.

Key Provisions

The Excise Regulations (Amendment) 1991 No. 383 introduces significant changes to the eligibility for refunds of excise duty on goods used by or sold to persons covered by a Status of Forces Agreement (SOFA). Section 78 of the Excise Act 1901 allows for refunds of excise duty under prescribed circumstances, and Regulation 50 details the specific situations where such refunds may be obtained. The amendments introduce a new refund circumstance to address the previous omission of duty-paid fuel supplied to US Navy personnel operating under a SOFA. Under the new subregulation 50(1)(v), a refund of excise duty may be claimed for excisable goods eligible for duty-free entry under Item 13(B) of the Excise Tariff Act 1921. This means that fuel supplied for the use of US Navy personnel, who are covered by a SOFA, can now qualify for a refund of excise duty. This change rectifies a previous anomaly where such fuel was duty-free but did not qualify for a refund. The obligations imposed by these regulations are primarily on the entities involved in the supply and use of excisable goods under SOFA. Suppliers like BP must ensure that the fuel supplied under the SOFA is correctly classified and documented to qualify for duty-free entry and potential refunds. Recipients of the goods, such as the US Navy, must adhere to the conditions set out in the Excise Tariff Act 1921 and the related by-laws, ensuring that the goods are used exclusively by the covered persons and not resold to others in Australia. Failure to comply with these regulations could result in various civil and criminal consequences. Although the specific penalties are not detailed in the explanatory statement, breaches of excise regulations generally attract fines and potential prosecution under the Excise Act 1901. The severity of the penalties depends on the nature and extent of the breach, but it can include substantial fines and, in more serious cases, imprisonment. The regulations are designed to ensure compliance and maintain the integrity of the excise duty system, particularly in relation to goods supplied under SOFAs.

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