Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 1 - Delivery of excisable goods for export
Outline of chapter
1.1 This chapter explains amendments to the Excise Act 1901 that enable the Commissioner of Taxation (Collector) to control the delivery for exportation of excisable goods by permissions and, if not satisfied the goods have been exported or otherwise accounted for, to require payment of the excise duty equivalent. [Schedule 1, items 5 and 8]
1.2 The amendments repeal a provision that allows the Australian Customs Service (Customs) to authorise delivery for exportation of excisable goods from excise licensed premises to a Customs prescribed place and make minor consequential amendments to the Customs Act 1901. [Schedule 1, items 1 and 2]
Context of amendments
1.3 The fundamental control of the Commissioner of Taxation (CEO) over all excisable goods is provided for in section 61 of the Excise Act 1901, while other controls include permission requirements, and offences for contravening those requirements over the movement of excisable goods on which duty has not been paid.
1.4 However, movement of excisable goods for exportation may occur without a permission given under excise legislation. At present excisable goods on which duty has not been paid may be moved away from excise licensed premises for exportation on the basis of an authority to deal with the goods provided by Customs and this authority is taken as a permission to move the goods from an excise licensed place to a place prescribed under the Customs Act 1901. The excisable goods pass out of the CEO's control upon delivery of the goods to the Customs licensed premises. Accordingly, the Australian Taxation Office (ATO) is unable to apply the usual compliance and revenue protection measures to the movement of these goods that it may apply to all other movement of excisable goods. The current arrangement dates back to the time when Customs administered both Customs and Excise legislation. With the separation of these functions it is necessary to update the provisions to ensure adequate compliance arrangements.
1.5 The diversion of excisable goods from export, particularly tobacco products, is considered to be high risk. There have been instances where excisable goods for export have not reached, or been diverted from within, the place of export. In other cases, the goods have not reached their overseas destination and it is unclear where they have been diverted. Containers have been found empty or not to contain the goods as described. However, as the goods are excisable, not customable, the provision for recovery of duty equivalent, available for goods under the control of Customs, cannot be applied.
1.6 The amendments enable the Collector to permit delivery of excisable goods for exportation, and require movement in accordance with permission conditions and satisfactory accounting for the goods upon request.
Summary of new law
1.7 Movement for exportation of excisable goods on which duty has not been paid will come under the provisions requiring movement permission from the Collector. New subsections 61A(2A) and (2B) specify that the Collector may give permission to deliver excisable goods for exportation. [Schedule 1, item 8]
1.8 Where a person has been entrusted with excisable goods that have been delivered for exportation under a permission from the Collector and fails to keep the goods safely or, when requested by the Collector, does not account satisfactorily for the goods, including their exportation, the Collector may demand payment of an excise equivalent amount as if the goods had been entered into home consumption on the day of the demand. [Schedule 1, item 5]
Comparison of key features of new law and current law
| New law | Current law |
|---|---|
| Excisable goods may be delivered for exportation with permission from the Collector. | Excisable goods may be delivered for exportation on the Customs authority to deal with the goods. |
| The Collector may demand payment of an amount equivalent to the excise duty where the person entrusted with the excisable goods that have been delivered for exportation fails to keep them safely or, upon request, account for them satisfactorily. | The Collector may demand payment of an amount equivalent to the excise duty where the person entrusted with the excisable goods under the CEO's control fails to keep them safely or, upon request, account for them satisfactorily. |
Detailed explanation of new law
1.9 The amendments repeal section 61AB that treats an authority to deal with excisable goods for export under the Customs Act 1901 as a permission to deliver the goods for exportation. [Schedule 1, item 7]
1.10 Movement of excisable goods for exportation will then require a Collector's permission under section 61A of the Excise Act 1901, which currently applies to movement of excisable goods under the CEO's control. New subsections 61A(2A) and (2B) insert provisions that the Collector may give permission on a one-off or ongoing basis to deliver excisable goods subject to the CEO's control for exportation and the permission is the delivery authority. [Schedule 1, item 8]
1.11 New subsection 60(1C) enables a Collector to make a written demand to a person who is entrusted with possession, custody or control of excisable goods on which duty has not been paid and which have been delivered for exportation under a permission, who fails to keep the goods safely or, when requested by the Collector, does not satisfy the Collector that the goods have been exported or does not otherwise satisfactorily account for the goods. [Schedule 1, item 5]
1.12 New subsection 60(1D) provides that, for the purposes of establishing exportation of the goods, evidence of delivery for export does not constitute evidence that the goods have been exported. [Schedule 1, item 5]
1.13 Minor consequential amendments delete reference to section 61AB from the note in section 16, include reference to subsection 60(1C) in subsection 60(2) and include reference to subsection 61A(2A) or (2B) in subsection 61A(3). [Schedule 1, items 4, 6 and 9]
Application and transitional provisions
1.14 Schedule 1, items 1 to 4, are taken to commence on Proclamation or, if the provisions do not commence within six months from the date this bill receives Royal Assent, on the first day after the end of that period.
Consequential amendments
1.15 The amendments repeal paragraph 114D(2)(b) of the Customs Act 1901. This paragraph provided an authority for the return of excisable goods, upon withdrawal of an export entry, to the place from which they were first delivered under the Customs entry as if by a section 61A (of the Excise Act 1901) permission. The effect of the amendments is that where an export entry is withdrawn excisable goods must be returned to an excise licensed place in accordance with the terms of a movement permission under the Excise Act 1901. [Schedule 1, items 1 and 2]
1.16 A minor technical correction renumbers subsections 114D(3) and (4) of the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 as subsections (2) and (3) if the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 commences before or at the same time as these provisions. [Schedule 1, item 3]