Commonwealth Numbered Regulations - Explanatory Statements

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Issued by authority of the Minister for Justice and Customs

Customs Act 1901

Customs Amendment Regulations 2000 (No. 4)

Section 270 of the Customs Act 1901 (the Act) provides that the Governor-General may make regulations prescribing matters which by that Act are required or permitted to be prescribed.

The purpose of the Regulations is to amend the Customs Regulations 1926 to prescribe fuels to be included within the definition of "diesel fuel" under the expanded Diesel Fuel Rebate Scheme (DFRS) and to allow DFRS applicants to prove their identity by providing an Australian Business Number (ABN).

Item 1 of Schedule 1 to the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Act 1999 inserted into subsection 4(1) of the Act a definition of diesel fuel, which will commence on 1 July 2000. Under that definition "diesel fuel" will include any other like fuel of a kind that is prescribed.

The Regulations will prescribe a number of fuels for the purposes of the definition of "diesel fuel" to extend the diesel fuel rebate to fuel oil and all fuels paying the same rate as diesel fuel except gasoline and certain products suitable for use as gasoline substitutes such as coal tar and coke oven distillates (Schedule 1, item 1).

The DFRS provides for a rebate to be payable to a person who purchases diesel fuel for certain off-road uses. The rebate is intended to compensate the end user of the fuel for the excise duty or customs duty incorporated into the price of the fuel.

As part of its tax reform measures, the Government is extending the rebate from diesel fuel to "like fuels".

Rates of duty are set by the Excise Tariff for petroleum products manufactured in Australia and the Customs Tariff for imported petroleum products. Duty rates for petroleum products vary according to intended end use. Use of petroleum products as fuel in an internal combustion engine attracts a higher rate of excise (currently about 43 cents per litre) than their use as fuel otherwise than in an internal combustion engine (currently about 7 cents per litre).

The Regulations will extend the rebate to all fuels paying the same rate of duty as diesel fuel (paragraph IB(I)(a)) (apart from the exceptions specified above). These fuels have similar characteristics to diesel fuel. This means that the DFRS will be extended to fuels capable of being used in diesel engines.

Although most light fuel oil and all heavy fuel oil attracts a lower rate of duty (about 7 cents per litre), the Regulations will include these fuels in the extended DFRS because they are used as marine fuels (paragraphs 1 B(1)(b) and (c)). Marine transport is being added as a new eligible category under the DFRS from 1 July 2000 and this extension would have had little effect if light and heavy fuel oil were not brought within the scope of the DFRS.

The A New Tax System (Australian Business Number) Act 1999 introduced the ABN. The object of that Act is to establish a system for registering businesses and issuing them with unique identifying numbers so that they can identify themselves reliably in their dealings with the Australian Government. The Regulations also provide for DFRS application to be able to prove their identity by providing an ABN (Schedule 1, items 2, 4 and 6).

This will be an optional alternative to the current proof-of-identity requirements, which will otherwise remain unchanged. The condition for accepting an ABN as proof of identity will be that the address and bank account details are the same as those in the ABN register.

The Regulations also make minor consequential amendments needed as a result of inserting two new paragraphs into the Regulations (Schedule 1, items 3 and 5).

The Regulations commence on 1 July 2000.

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