House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs, the Honourable Clare O'Neil MP)

NOTES ON INDIVIDUAL CLAUSES [Customs Licensing Charges Amendment Bill 2024]

Section 1 Short title

1. This section provides for the Customs Licensing Charges Amendment Bill 2024 (the Charges Bill), when enacted, to be cited as the Customs Licensing Charges Amendment Act 2024.

Section 2 Commencement

2. This section sets out, in a table, the date on which provisions of the Charges Bill will commence.

3. Table item 1 provides the whole of the Charges Bill will commence on a day to be fixed by Proclamation, or if not within six months from the day the Charges Bill receives the Royal Assent, then the day after that period.

Section 3 Schedules

4. This section enables the Schedule to the Charges Bill, when enacted, to amend or repeal provisions of legislation specified in that Schedule in accordance with the applicable items. In the context of the Charges Bill, the Customs Licensing Charges Act 1997 (the Charges Act) is being amended.

SCHEDULE 1 AMENDMENTS [Customs Licensing Charges Amendment Bill 2024]

Customs Licensing Charges Act 1997

Item 1 Section 6

5. This item repeals section 6 and substitutes new section 6 titled "Amount of depot licence charge".

Grant of licence

6. For a depot licence that comes into force on 1 July, new paragraph 6(1)(a) sets the charge payable for the grant of a depot licence at $4,000. A different charge amount can be prescribed by regulations made under section 7 of the Charges Act to be payable instead of $4000, but this must not exceed $6000.

7. For a licence that does not start on 1 July, new paragraph 6(1)(b) provides a formula which calculates a pro rata charge amount based on the number of days remaining in that financial year from the day the licence comes into force divided by the number of days in that financial year. The result is then multiplied by whichever amount applies under new paragraph 6(1)(a) to work out the amount of depot licence charge payable by the applicant.

8. The purpose of this amendment is to streamline licence charge calculations and provide a clear amount or formula for the calculation of the costs of the licence, whether for a full year or part of a year depending on when the licence is granted. These amendments align with the charges set out for warehouse licences in subsection 6D(1) of the Charges Act.

Renewal of licence

9. New subsection 6(2) calculates the renewal cost of a depot licence. It sets the default annual charge at $4,000 or no more than $6,000, as prescribed by regulations made under section 7 of the Charges Act. This amendment aligns with the charges set out for warehouse licences in subsection 6D(2) of the Charges Act.

10. New subsection 6(2) also accommodates, via subsection 6(3), lesser annual licencing charges where the relevant depot was to account for a licence under Part IVA of the Customs Act during the whole of the period of 12 months ending on the last 31 March before the start of the financial year for which the renewal is sought, and there were less than 300 transactions handled in relation to the depot during that 12 month period. In this instance, the amount of depot licence charge payable in respect of the renewal of the depot licence is $1,500, or, if another amount not exceeding $2,250 is prescribed, that other amount.

11. This remedies a deficiency in current subsections 6(2) and 6(3) in respect of licences which had been granted between the period of 1 April and 30 June.

12. Current subsection 6(3) requires a licence to have commenced during the 'reference year' – that is, between 1 April of the previous calendar year and 31 March of the current calendar year. Depot licences that are first granted in the period of 1 April to 30 June do not fall within the scope of a standard 'reference year'. The Charges Act makes no provision for calculating depot licence renewal charges where a depot licence was first granted in the period between 1 April and 30 June. This means, the depot was neither licensed for the whole of the reference year, nor did it become licensed during the reference year. Accordingly, whilst s 77U of the Customs Act provides that depot licence charges are payable in respect of the renewal of the licence, the Charges Act does not set out the procedure for calculating a charge amount.

13. This provided an unfair financial advantage to licences granted to an applicant if they so happen to be licensed in the period of 1 April to 30 June.

14. Subsection 6(2) now provides a default annual renewal charge if the parameters in subsection 6(3) are not met – providing an annual cost in all other circumstances, regardless of when the licence was granted in a year.

Item 2 Application provision

15. The charge amounts as amended by this Part apply in relation to the grant of a depot licence on or after the day on which this item commences; and the renewal of a depot licence on or after the day on which this item commences. This applies whether the depot licence was granted before, on or after this item commences.