EXPLANATORY STATEMENT
EXCISE REGULATIONS (AMENDMENT)
STATUTORY RULES 1990 NO. 236
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 “(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…”
Statutory Rules 1989 No.307 amended the Excise Regulations (the Regulations) to create a new refund circumstance to enable a refund of excise duty to be made where a product on which excise duty has been paid has been withdrawn from the market at the request of the Government.
Following the Government’s representations concerning the danger posed to young people by the “Kix” range of drinks, Carlton Wines and Spirits (Australia) Pty Ltd took the commendably responsible action of withdrawing the entire stock from the market, at a significant financial loss to the company. The new refund circumstance was specifically designed to enable the payment of a refund of excise duty which the company had already paid in respect of the withdrawn “Kix” product.
Regulation 54A confers a discretion upon the Comptroller-General to be satisfied of the destruction of any product which is withdrawn in accordance with the new refund circumstance.
The Senate Standing Committee on Regulations and Ordinances has expressed its concern that the discretion in Regulation 54A is not subject to review, and the Committee feels it should be in view of its potential to be exercised adversely to a person.
The discretion has only in fact been exercised once (in the “Kix” case), and on that occasion in a manner beneficial to the applicant. However, the Committee’s comments about the potential for abuse are acknowledged and it is now proposed to repeal the regulation.
This Statutory Rule will amend the Excise Regulations to repeal regulation 54A, and to make other minor amendments consequential upon that repeal.
The amendments are explained in greater detail in the Attachment to this Statement.
ATTACHMENT
Proposed Amendments to the Excise Regulations
Regulation 1 will amend regulation 50 of the Regulations as follows:
Paragraph 50(1)(db) and subsection 50(2A) of the Regulations both acknowledge the discretion in regulation 54A by providing that goods may be “taken to have been returned”;
The discretion is removed by Regulation 3 which repeals regulation 54A, and it is therefore appropriate to remove the above references to that discretion;
paragraph (a) omits a reference to the discretion from sub-paragraph (1)(db)(ii)(B);
paragraph (b) omits subregulation (2A).
Regulation 2 will amend regulation 54 of the Regulations which provides for the supervision of the destruction of goods required to be destroyed as a precondition for eligibility for a refund of excise duty under regulation 50;
paragraph (a) amends subregulation (1) to provide that in future goods to which paragraph 50(1)(db) of the regulations applies must be destroyed under supervision of the Australian Customs Service as a precondition for eligibility for a refund of excise duty under that paragraph;
paragraph (b) amends subregulation (2) to provide that the normal supervision fee shall not apply where such goods are destroyed the under supervision of the Australian Customs Service.
The supervision fee is waived in this circumstance to take cognisance of the fact that the goods have been destroyed at the request of the Government.
Regulation 3 repeals regulation 54A to remove the discretion commented upon by the Senate Standing Committee on Regulations and Ordinances.
Overview
The Excise Regulations (Amendment) Statutory Rules 1990 No. 236 were enacted to address concerns raised by the Senate Standing Committee on Regulations and Ordinances regarding the discretionary power of the Comptroller-General to be satisfied of the destruction of any product withdrawn from the market under a new refund circumstance. This discretionary power, established to facilitate refunds of excise duty for products withdrawn at the government's request, was considered problematic due to its potential for abuse and lack of review. Consequently, the rules aim to repeal the discretionary regulation 54A while making minor consequential amendments to other regulations to ensure that goods must be destroyed under the supervision of the Australian Customs Service for refund eligibility, with the supervision fee waived to reflect the government-requested destruction. These amendments were introduced by the authority of the Minister of State for Small Business and Customs, with a policy objective to enhance regulatory transparency and accountability in the excise refund process.
Scope and Application
The Excise Regulations (Amendment) Statutory Rules 1990 No. 236 amends the Excise Regulations under the authority of the Minister of State for Small Business and Customs, as permitted by section 164 of the Excise Act 1901. This amendment addresses a specific circumstance where a refund of excise duty can be made for products withdrawn from the market at the government's request, which was established in a previous regulation to assist companies such as Carlton Wines and Spirits (Australia) Pty Ltd after they withdrew products like the "Kix" range due to concerns about their appeal to young people. Regulation 54A, which allowed the Comptroller-General to be satisfied of the destruction of withdrawn products, is repealed in response to concerns raised by the Senate Standing Committee on Regulations and Ordinances about the lack of reviewability of this discretion. Consequently, the amendments remove references to this discretion in regulations 50(1)(db) and 50(2A), and establish that goods subject to paragraph 50(1)(db) must be destroyed under the supervision of the Australian Customs Service, with the supervision fee waived in recognition of the government's role in the destruction. These changes reflect a commitment to balancing regulatory oversight with the practical needs of businesses acting in the public interest.
Key Provisions
The Excise Regulations (Amendment) Statutory Rules 1990 No. 236 primarily target the amendment of the Excise Regulations to address concerns raised by the Senate Standing Committee on Regulations and Ordinances regarding the discretion given to the Comptroller-General to be satisfied with the destruction of products withdrawn from the market under certain circumstances. Regulation 54A, which allows for this discretion, is repealed to mitigate potential for abuse, as suggested by the Committee. This repeal necessitates other adjustments within the Regulations to maintain coherence and functionality.
These amendments impose certain obligations on entities involved in the withdrawal and destruction of products under the Excise Act 1901. For example, Regulation 2 mandates that any goods subject to the new conditions under Regulation 50(1)(db) must be destroyed under the supervision of the Australian Customs Service. This ensures that the destruction process adheres to the specified legal requirements. Additionally, Regulation 2(b) waives the normal supervision fee for such destructions, recognising the public interest in the government-requested withdrawal of products from the market.
In terms of penalties and consequences, the Statutory Rules do not explicitly outline criminal or civil penalties for breaches of the amended Regulations. However, non-compliance with the specified requirements for the destruction and supervision of goods could lead to denial of a refund of excise duty under Regulation 50. The absence of specific penalties in the text suggests that adherence to the prescribed procedures is critical to avoid financial and legal repercussions, primarily the inability to claim a refund. The focus is on ensuring that the withdrawal and destruction of products are conducted in a manner that aligns with the legislative intent and regulatory oversight.