Senate

Explanatory Memorandum

(Circulated by authority of the Minister for Justice and Customs, Senator the Hon Christopher Martin Ellison)

Chapter 6 - Cost recovery

Outline of Chapter

The Customs Legislation Amendment and Repeal (International Trade Modernisation) Bill 2000 (the Bill) with the Import Processing Charges Bill 2000 and Customs Depot Licensing Charges Amendment Bill 2000 propose a number of changes to the charges and fees that are collected by Customs.

The Import Processing Charges Act 1997 will be repealed by the Bill and replaced by the Import Processing Charges Bill 2000.

Detailed explanation of new law

Refund application fees

It is proposed to remove the fees that are payable upon the making of a refund application fee. Hence, subsections 163(1B), (1C) and (1D) of the Customs Act will be repealed ( item 43, Part 2, Schedule 3 to the Bill).

Import processing charges

Section 68 of the Customs Act provides that certain goods are required to be entered and they must be either entered for home consumption or for warehousing.

Entry for home consumption

Under the amendments proposed by the Bill an entry of goods for home consumption can be made by communicating to Customs either an import declaration in respect of the goods or a request for cargo release (RCR) in respect of the goods ( new subsection 68(3A) of the Customs Act).

Import declarations

The Import Processing Charges Act 1997 sets out six charges payable in respect of import entries relating to goods to which section 68 of the Customs Act applies. The different charges depend on whether the import entry is made by computer or document and whether the goods are imported by air, sea or through the post. The charges consist of a flat rate and a line rate that is charged per line of the entry if the entry has more than a certain number of lines.

For the charges that will apply in respect of import declarations there will no longer be a distinction in the manner in which the goods are imported, that is the charge will be the same for goods imported by air, sea or through the post. Further, there will only be a flat rate of charge and no line rate.

The owner of goods will become liable to pay import declaration processing charge when an import declaration in respect of goods is, or is taken to have been, communicated to Customs ( new section 71B of the Customs Act). The new charges are set out below.

The amount of import declaration processing charge is:

•

for an electronic import declaration that relates to goods to which section 68 of the Customs Act applies if the value of those goods is more than $250 (or such other amount as is prescribed) but not more than $1,000 (or such other amount as is prescribed) -$23.20 or, if another amount (not exceeding $34.80) is prescribed by the regulations, the amount so prescribed (subparagraph 5(3)(a)(i) of the Import Processing Charges Bill 2000);

•

for an electronic import declaration that relates to goods to which section 68 of the Customs Act applies if the value of those goods is more than $1,000 (or such other amount as is prescribed) - $29.25 or, if another amount (not exceeding $43.85) is prescribed by the regulations, the amount so prescribed (subparagraph 5(3)(a)(ii) of the Import Processing Charges Bill 2000);

•

for a documentary import declaration that relates to goods to which section of the Customs Act applies $60.00 or, if another amount (not exceeding $90.00) is prescribed by the regulations, the amount so prescribed (paragraph 5(3)(b) of the Import Processing Charges Bill 2000).

Requests for cargo releases (RCR) and periodic declarations

A RCR contains less information than an import declaration but can only be made by a person who has entered into an import information contract or by a customs broker nominated in the contract to make communications on behalf of the person ( new subsection 71DB(3) ). If a person makes RCRs the person must lodge a periodic declaration not later than the first day of the month following the one in which the RCR was made.

The RCR processing charge and periodic declaration charge are new charges that will be payable by persons who enter into import information agreements.

A person who has entered into an import information agreement becomes liable to pay RCR processing charge when they send a RCR to Customs. However, RCR processing charge is not payable until the person sends to Customs a periodic declaration in respect of goods to which the request relates. If a RCR is withdrawn or is taken to be withdrawn before an authority to deal is issued, the person is not liable to pay the RCR processing charge in respect of the request ( new section 71DC ).

The amount of RCR processing charge is $9.40 or, if another amount (not exceeding $14.10) is prescribed by regulation, the amount so prescribed (subclause 5(5) of the Import Processing Charges Bill 2000).

A person becomes liable to pay periodic declaration processing charge when the person sends to Customs a periodic declaration ( new section 71DG of the Customs Act).

The amount of periodic declaration processing charge is $1,275 or, if another amount (not exceeding $1,912.50) is prescribed by regulation, the amount so prescribed (subclause 5(4) of the Import Processing Charges Bill 2000).

Warehoused goods

An import declaration can also be made in respect of warehoused goods that are intended to be entered for home consumption ( new subsection 71A(1) of the Customs Act).

The owner of warehoused goods who makes an import declaration in respect of those goods is liable to pay a fee (the warehoused goods entry fee) for the processing by Customs of that declaration ( new section 71BA of the Customs Act).

The amount of that fee is:

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for an electronic import declaration in respect of warehoused goods - $23.20 or, if another amount (not exceeding $34.80) is prescribed by the regulations, the amount so prescribed ( new paragraph 71BA(2)(a) of the Customs Act); and

•

for a documentary import declaration in respect of warehoused goods - $60.00 or, if another amount (not exceeding $90.00) is prescribed by the regulations, the amount so prescribed ( new paragraph 71BA(2)(b) of the Customs Act).

Entry of goods for warehousing

An entry of goods for warehousing is made by communicating to Customs a warehouse declaration in respect of the goods ( new subsection 68(3B) of the Customs Act).

The owner of goods becomes liable to pay warehouse declaration processing charge when a warehouse declaration in respect of goods is, or is taken to have been communicated to Customs ( new subsection 71DI(1) of the Customs Act). The charge is also payable on altered declarations.

If one person who is the owner of goods pays the charge relating to particular goods, then any other person who is also the owner of the goods ceases to be liable to pay the charge ( new subsection 71DI(2) of the Customs Act).

If the warehouse declaration is withdrawn or taken to have been withdrawn, before an authority to deal with the goods is issued, then the owner is not liable to pay the warehouse declaration processing charge in respect of that declaration ( new subsection 71DI(3) of the Customs Act).

The amount of the warehouse declaration processing charge is:

•

for an electronic warehouse declaration that relates to goods whose value is more than $250 (or such other amount as is prescribed) but not more than $1,000 (or such other amount as is prescribed) - $23.20 or, if another amount (not exceeding $34.80) is prescribed by the regulations, the amount so prescribed (subparagraph 5(6)(a)(i) of the Import Processing Charges Bill 2000);

•

for an electronic warehouse declaration that relates to goods whose value is more than $1,000 (or such other amount as is prescribed) - $29.25 or, if another amount (not exceeding $43.85) is prescribed by the regulations, the amount so prescribed (subparagraph 5(6)(a)(ii) of the Import Processing Charges Bill 2000); and

•

for a documentary warehouse declaration - $60.00 or, if another amount (not exceeding $90.00) is prescribed by the regulations, the amount so prescribed (paragraph 5(6)(b) of the Import Processing Charges Bill 2000).

Goods not requiring entry - self-assessed clearance declarations

Section 71 of the Customs Act provides that the owner of the following goods must, in any circumstances specified in the regulations, provide such information at such time and in such manner and form as the regulations specify:

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goods that are accompanied or unaccompanied personal or household effects of a passenger, or a member of a crew, of a ship or aircraft (paragraph 68 (1)(d) of the Customs Act);

•

goods, other than prescribed goods that are included in a consignment consigned through the Post Office by one person to another and that have a value not exceeding $1,000 or such other amount as is prescribed (paragraph 68 (1)(e) of the Customs Act);

•

goods, other than prescribed goods that are included in a consignment consigned other than by post by one person to another, that are all transported to Australia in the same ship or aircraft and that have a value not exceeding $250 or such other amount as is prescribed (paragraph 68 (1)(f) of the Customs Act); and

•

goods that, under the regulations, are exempted from section 68 (paragraph 68(1)(i) of the Customs Act).

The owner of goods that fall into the first category will still be required to provide information about those goods in accordance with the regulations.

In respect of goods in the remaining three categories the owner or a person on their behalf must make a self-assessed clearance declaration in respect of the goods ( new subsection 71(2) of the Customs Act).

The amount of the self-assessed clearance declaration charge is:

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for a declaration made by a cargo reporter; and

•

for a declaration made in respect of reportable documents where there are 21 or more reportable documents in the declaration

•

$45.00 or, if another amount (not exceeding $67.50) is prescribed by the regulations, the amount so prescribed (paragraph 5(2)(a) of the Import Processing Charges Bill 2000).

The amount of the self-assessed clearance declaration charge for all other declarations is $2.15 or such other amount (not exceeding $3.23) as is prescribed (paragraph 5(2)(b) of the Import Processing Charges Bill 2000).

The CEO may enter into arrangements with people for the payment of this charge under which the person must agree to pay the charge to the Commonwealth in the manner provided in the arrangement ( new subsection 71AAB(2) of the Customs Act). If there is no arrangement in place the person must, within 21 days after the person is notified by Customs of the charge for which the person becomes liable during each month, pay that amount to the Commonwealth ( new subsection 71AAB(1) of the Customs Act).

Further, the Regulations will be able to prescribe those people who will not be liable to pay self-assessed clearance charge ( new paragraph 71AAA(3)(b) of the Customs Act).

Cargo report processing charge

Section 64AAB of the Customs Act currently provides that a person who communicates to Customs a documentary cargo report will be liable to pay cargo report processing charge. Since the Bill will amend the Customs Act to provide that all cargo reports must be made electronically the charge is no longer necessary. Hence, section 64AAB of the Customs Act will be repealed ( item 118, Part 6, Schedule 3 to the Bill).

Screening charge

Paragraph 7(a) of the Import Processing Charges Act 1997 provides that the amount of screening charge payable in respect of documentary or electronic report that is, or is a part of, a cargo report is $2.40 for each line that relates to a consignment of goods except if the report is made by a special reporter or if in accordance with subsection 64ABC (1A) of the Customs Act. Under the amendments proposed in the Bill and the Import Processing Charges Bill 2000, this charge will no longer be payable.

Special reporters are people who import high volumes of:

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reportable documents;

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mail-order house goods; or

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other prescribed goods

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where those documents or goods are low value.

Special reporters are registered under Subdivision C, Division 3 of Part IV of the Customs Act. Under paragraphs 7(b), (c), (d) of the Import Processing Charges Act 1997 the amount of screening charge payable by special reporters is $45 for each report relating to low value cargo or such other amount, not exceeding $67.50, as is prescribed. No other amount has been prescribed.

The Bill will amend the Customs Act to provide that an importer of reportable documents will no longer be able to be registered as a special reporter.

The Import Processing Charges Bill 2000 sets out the amount of screening charge for an abbreviated cargo report (subclause 5(1) of the Import Processing Charges Bill 2000).

The amount of that charge will not be changed, that is, $45 for the report or such other amount, not exceeding $67.50, as is prescribed.

A special reporter who pays screening charge who also makes a self-assessed clearance declaration in respect of those goods will not be liable to pay self-assessed clearance declaration charge in respect of those goods ( new paragraph 71AAA(3)(a) of the Customs Act).

Depot licensing

Under new section 77LA of the Customs Act the CEO may vary a depot licence by:

omitting the description of a place that is currently described in the licence and substituting a description of another place; or

altering the description of a place that is currently described in the licence ( item 146 of the Bill).

If a holder of a depot licence applies to have their licence varied in this manner they will be liable to pay a depot licence variation charge. The Customs Depot Licensing Charges Amendment Bill 2000 provides that the amount of that charge is $300 or, if another amount, not exceeding $450, is prescribed, that other amount.