Commonwealth Numbered Regulations - Explanatory Statements

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Issued by the Authority of the Minister for Justice and Customs

Customs Act 1901

Customs Amendment Regulations 2003 (No. 8)

Subsection 270(1) of the Customs Act 1901 (the Act) provides in part that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any other business relating to the Customs.

Subsection 163(1) of the Act provides in part that refunds, rebates and remissions of duty may be made:

(a)       in respect of goods generally or in respect of the goods included in a class of goods; and

(b)       in such circumstances as are prescribed, being circumstances that relate to goods generally or to the goods included in the class of goods.

Regulation 126 of the Customs Regulations 1926 (the Principal Regulations) sets out the circumstances under which refunds, rebates or remissions of customs duty may be made for the purposes of subsection 163(1) of the Act. In particular, previous paragraph 126(1)(z) allowed refunds to be made of duty paid on certain eligible imports where an amount of duty credit earned under the Automotive Competitiveness and Investment Scheme (ACIS) set out in the ACIS Administration Act 1999 (ACIS Act) had been transferred to the Commonwealth.

Participants in ACIS are eligible to earn duty credit, which can be used to offset customs duty payable on certain eligible imports, on the basis of their production of specified motor vehicle parts, and certain of their other investments in the Australian automobile industry. The ACIS Act previously also allowed duty credit earned to be transferred to another person but did not allow duty credit to be applied against customs duty already paid on eligible imports.

Therefore, in order to enable ACIS participants to use their duty credit to obtain refunds of customs duty already paid, a temporary arrangement in the form of previous paragraph 126(1)(z) of the Principal Regulations was set up while a permanent solution was pursued by amending the ACIS Act.

The Industry, Tourism and Resources Legislation Amendment Act 2003 (the ITRLA Act), assented to on 11 April 2003, amended the ACIS Act to insert new section 75A. This new section allows a person to apply duty credit earned under ACIS against duty that the person has already paid in respect of the importation, on or after 1 January 2001, of eligible imports under the ACIS Act. Section 75A commenced on 11 October 2003, six months after the ITRLA Act received the Royal Assent, in accordance with subsection 2(3) of the ITRLA Act.

The purpose of the amending Regulations is to prescribe a new refund circumstance as a consequence of new section 75A of the ACIS Act. The amending Regulations allows a refund of duty where duty credit has been applied in accordance with section 75A of the ACIS Act against customs duty that has already been paid on eligible imports. The amount of the refund will not be more than the amount of duty credit applied. The circumstance in previous paragraph 126(1)(z) is no longer required.

The amending Regulations commenced on 11 October 2003, the date on which section 75A of the ACIS Act commenced.


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