EXPLANATORY STATEMENT
EXCISE REGULATIONS (AMENDMENT)
STATUTORY RULES 1989 NO. 307
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR INDUSTRY, TECHNOLOGY AND COMMERCE
Section 164 of the Excise 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 or as may be necessary or convenient to be prescribed for giving effect to this Act...”
This Statutory Rules amends the Excise Regulations with effect from 1 March 1988 to provide the facility for a refund of Excise duty to be made where a product has been withdrawn from sale for health or safety reasons at the request of a Minister of State.
By way of background, last year Carlton Wines and Spirits (Australia) Pty Ltd marketed a range of mixed drinks, named “Kix”.
The “Kix” range were spirituous beverages, classified to Excise Tariff item 2H, and attracted substantial rates of duty when entered for home consumption.
The drinks were voluntarily withdrawn from the market upon the request of Government Ministers who expressed concern about the attraction to the drinks by young people.
The amendments are retrospective to 1 March 1988, and will enable Carlton Wines and Spirits (Australia) Pty Ltd to claim a refund of the Excise duty paid on the “Kix” drink which was withdrawn from the market at the Government’s request. In addition, it will provide a facility for a refund to be made should similar circumstances occur in future in relation to any product which a Minister of State requests to be withdrawn for health or safety reasons.
Details of the amendments are as follows:
Regulation 1 provides that the amendments commence on 1 March 1988.
This date has been chosen to ensure that Carlton Wines and Spirits (Australia) Pty Ltd are eligible to claim a refund of Excise duty on the “Kix” range of beverages withdrawn from sale at the Government’s request.
Although the amendment has retrospective operation, it does not prejudice the rights of any person other than the Commonwealth, and for this reason it is considered that it does not offend paragraph 48(2)(c) of the Acts Interpretation Act 1901.
Regulation 2 amends regulation 50 of the Regulations to prescribe a new refund circumstance for a refund of Excise duty.
paragraph (a) inserts a new paragraph 50(1)(db) into the Regulations to provide that a refund of Excise duty is payable where:
a. Excise duty has been paid on a product;
b. a Minister of State has requested withdrawal of the product on the grounds of public health or safety;
c. the product is withdrawn in accordance with that request.
• new regulation 54A (as to which see regulation 3 (below)) provides that a refund is not payable in accordance with this provision unless the goods are destroyed or otherwise rendered incapable of resale.
paragraph (b) inserts a new subregulation 50(2A) to provide that goods are taken to have been returned for the purposes of the new paragraph 50(1)(db) if they are returned to a person authorised by the manufacturer to receive the goods on his or her behalf.
Regulation 3 inserts a new regulation 54A to provide that a refund is not to be allowed unless the applicant establishes to the satisfaction of the Comptroller that the goods have been destroyed or have been otherwise rendered incapable of being resold.
Overview
The Excise Regulations (Amendment) Statutory Rules 1989, issued under the authority of the Minister of State for Industry, Technology and Commerce, aim to address the issue of refunding excise duty when products are withdrawn from sale for health or safety reasons at the request of a Minister of State. This legislation arose from the specific situation involving Carlton Wines and Spirits (Australia) Pty Ltd, which voluntarily withdrew their “Kix” range of mixed drinks from the market following concerns raised by Government Ministers about their appeal to young people. The policy objective of these amendments is to provide a mechanism for manufacturers to claim refunds on excise duty paid on products withdrawn under such circumstances, while ensuring that the goods are destroyed or rendered incapable of resale. The amendments are effective from 1 March 1988 and are retrospective to cover the “Kix” range of drinks, ensuring that Carlton Wines and Spirits (Australia) Pty Ltd can claim a refund. The changes also establish a precedent for future cases where products are withdrawn at the government's request for health or safety reasons.
Scope and Application
The Excise Regulations (Amendment) Statutory Rules 1989, issued under the authority of the Minister of State for Industry, Technology and Commerce, amend the Excise Regulations to include a refund mechanism for excise duty paid on products withdrawn from sale for health or safety reasons at the request of a Minister of State. This amendment applies retrospectively from 1 March 1988 and specifically enables Carlton Wines and Spirits (Australia) Pty Ltd to claim a refund of excise duty on the "Kix" range of beverages, which were withdrawn from the market following government concerns about their appeal to young people. The amendment extends to any product that a Minister of State requests to be withdrawn for health or safety reasons in the future. The refund is subject to the condition that the goods are destroyed or rendered incapable of resale, as outlined in the new regulation 54A, and goods are considered returned if they are handed over to an authorised person on behalf of the manufacturer. This amendment ensures the refund process aligns with the Act and does not adversely affect the rights of any party other than the Commonwealth.
Key Provisions
The main operative sections of the Excise Regulations (Amendment) Statutory Rules 1989 No. 307 provide the facility for a refund of excise duty where a product has been withdrawn from sale for health or safety reasons at the request of a Minister of State. Regulation 2 amends regulation 50 to prescribe a new refund circumstance for a refund of excise duty. Regulation 3 introduces a new regulation 54A that specifies the conditions under which a refund can be allowed. According to regulation 2, a refund of excise duty is payable where the duty has been paid on a product, a Minister of State has requested the withdrawal of the product on the grounds of public health or safety, and the product is withdrawn in accordance with that request (section 50(1)(db)). Regulation 54A mandates that a refund is not to be allowed unless the applicant establishes to the satisfaction of the Comptroller that the goods have been destroyed or otherwise rendered incapable of being resold (section 54A).
The Act imposes certain obligations and requirements on the parties involved. The manufacturer or importer of the product must ensure that the excise duty has been paid on the product before applying for a refund. The Minister of State must formally request the withdrawal of the product on the grounds of public health or safety, and the manufacturer or importer must comply with this request by withdrawing the product from sale. The manufacturer or importer must also provide evidence that the goods have been destroyed or otherwise rendered incapable of being resold to be eligible for a refund. According to section 50(2A), goods are taken to have been returned for the purposes of the new paragraph 50(1)(db) if they are returned to a person authorised by the manufacturer to receive the goods on his or her behalf.
Failure to comply with the requirements set out in the Act may result in civil or criminal consequences. The Act does not specify the exact penalties for non-compliance, but it is likely that the consequences could include fines or other penalties. For example, if a manufacturer or importer fails to withdraw a product from sale after a Minister of State requests it on the grounds of public health or safety, they could be subject to a penalty under the Act. Additionally, if a manufacturer or importer provides false or misleading information to the Comptroller to obtain a refund, they could be subject to criminal prosecution. The exact penalties for non-compliance would depend on the specific circumstances of the case.