Excise Regulations (Amendment) 1995 No. 314
EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 314
Issued by the Authority of the Minister for Small Business, Customs and Construction
Excise Act 1901
Excise Regulations (Amendment)
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 ... for giving effect to this Act or for the conduct of business relating to the Excise, ....."
The purpose of these Regulations is to amend regulation 186 of the Excise Regulations (the Regulations) to maintain exemption from excise duty liability for stores for consumption in certain aircraft engaged on international air services.
Regulation 186 of the Regulations provides for exemption from excise duty liability for stores of aircraft falling to specific classes. In particular, paragraph 186(2)(c) exempts the stores of aircraft other than Australian aircraft only if those aircraft are operating under an "intergovernmental agreement" between the Commonwealth and the government of another country. Generally, such international agreements are bilateral arrangements between the Commonwealth and the Government of another sovereign state in accordance with the principles of the multilateral Chicago Convention on International Civil Aviation.
Air services between Australia and Taiwan are operated under non-government bilateral arrangements, as the Commonwealth does not recognise Taiwan as a sovereign state. In 1991 the Regulations were amended to facilitate the commencement of international air services between Australia and Taiwan. Those amendments inserted paragraph 186(2)(ba) to provide duty exemption for stores for consumption or use in an aircraft that is engaged on a flight approved under subsection 15(1) of the Air Navigation Act 1920 (which covers flights by foreign aircraft not possessing the nationality of a Contracting State to the Chicago Convention on International Civil Aviation).
The Government is now in the process of regularising the approval process for Taiwanese air operations and those services are no longer to be approved under section 15(1). Although the air services remain under non-government bilateral arrangements, they will be approved as scheduled services under the standard licensing and timetable provisions of the Air Navigation Act 1920 and associated regulations.
These Regulations maintain the duty exemption for stores for consumption in Taiwanese aircraft. The proposed Regulations amend regulation 186 by:
(i) omitting "intergovernmental agreement" (wherever occurring) in paragraph 186(2)(c) and substituting "bilateral arrangement" (subregulation 2.1 refers); and
(ii) inserting a definition providing that "bilateral arrangement" has the same meaning as in the International Air Services Commission Act 1992 (the IASC Act) (subregulation 2.2 refers).
The IASC Act defines "bilateral arrangement" to mean:
"... an agreement or arrangement between:
(a) Australia, or an entity or organisation nominated or otherwise similarly authorised by Australia to enter into the agreement or arrangement; and
(b) another country;
under which the carriage by air of passengers or freight, or both passengers and freight, between Australia and the other country is permitted".
This definition covers all those arrangements previously covered by the term "intergovernmental agreement" as weft as arrangements with Taiwan due to the further definition in the IASC Act of "another country" as including:
"... any region:
(a) that is part of a foreign country; or
(b) that is under the protection of a foreign country; or
(c) for whose international relations a foreign country is responsible."
Paragraph 186(2)(ba) of the Regulations is not repealed as the Government intends to continue the benefit of the duty exemption for other international flights approved under subsection 15(1) of the Air Navigation Act 1920.
The Regulations commenced on gazettal.
Overview
The Excise Regulations (Amendment) 1995 No. 314, issued under the authority of the Minister for Small Business, Customs and Construction, was enacted to amend the Excise Regulations and address the issue of excise duty exemption for stores for consumption in certain international aircraft. Specifically, it aims to ensure the continuation of duty exemption for stores for consumption in Taiwanese aircraft engaged on international air services. The regulation makes amendments to Regulation 186 of the Excise Regulations, replacing the term "intergovernmental agreement" with "bilateral arrangement" to encompass the broader scope of non-government bilateral arrangements, including those with Taiwan. This change aligns with the International Air Services Commission Act 1992, which defines "bilateral arrangement" to include agreements with regions not recognised as sovereign states. The objective of these amendments is to regularise the approval process for Taiwanese air operations while maintaining the continuity of excise duty exemptions for stores on such flights.
Scope and Application
The Excise Regulations (Amendment) 1995 No. 314 applies to the regulation of excise duty concerning stores for consumption on aircraft engaged in international air services. Specifically, it modifies regulation 186 of the Excise Regulations to maintain the exemption from excise duty for stores used in certain aircraft. This includes stores for consumption in aircraft operating under bilateral arrangements, particularly those engaged on flights approved under the standard licensing and timetable provisions of the Air Navigation Act 1920. The amendment ensures that stores for consumption in aircraft operating under non-government bilateral arrangements, such as those with Taiwan, remain exempt from excise duty. The term "bilateral arrangement" is redefined in line with the International Air Services Commission Act 1992, which includes agreements with regions not recognised as sovereign states. This amendment reflects the Commonwealth’s process of regularising the approval of international air services, ensuring the continuity of duty exemptions for these specific international flights. The Regulations commenced immediately upon gazettal, ensuring the timely application of these changes to the existing legal framework.
Key Provisions
The Excise Regulations (Amendment) 1995 No. 314 primarily focuses on amending regulation 186 of the Excise Regulations to maintain the exemption from excise duty for stores used in certain aircraft engaged in international air services. Section 2.1 of these Regulations removes the term "intergovernmental agreement" from paragraph 186(2)(c) and replaces it with "bilateral arrangement." This change is intended to align with the current legislative framework and the approval process for international air services. Section 2.2 introduces a definition for "bilateral arrangement" which is sourced from the International Air Services Commission Act 1992. This definition ensures that the term encompasses agreements not only with sovereign states but also with regions that are part of foreign countries or under their protection.
These amendments impose specific obligations on the parties involved. The duty exemption for stores used in aircraft engaged in international air services continues, but now the exemption is contingent on the services being approved under a "bilateral arrangement" as defined. This means that both the Commonwealth and the foreign entity must comply with the conditions stipulated under such arrangements to qualify for the exemption. The regulations require that the operations must fall under the new definition of "bilateral arrangement," which aligns with the provisions of the International Air Services Commission Act 1992. This ensures that the operations are legally recognised and approved under the correct legislative framework.
Failure to comply with these regulations could result in various consequences. While the specific penalties are not detailed within the explanatory statement, breaches of excise regulations typically carry significant penalties under the Excise Act 1901. These may include fines and, in severe cases, imprisonment. The precise penalties would depend on the nature and extent of the breach, but they could include substantial financial penalties and potential criminal charges for those found in violation of the Act. It is essential for entities and individuals involved in international air services to adhere strictly to these regulations to avoid these potential repercussions.