Commonwealth Numbered Regulations - Explanatory Statements

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Select Legislative Instrument 2005 No. 230


Issued by the Authority of the Minister for Justice and Customs


Customs Act 1901


Customs Amendment Regulations 2005 (No. 6)


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 business relating to the Customs.


The purpose of the Regulations is to raise the value of goods imported into Australia other than by post that have to be reported to the Australian Customs Service (Customs) on a formal import entry from $250 to $1,000.


Section 68 of the Act provides, in part, that imported goods must be the subject of a formal import entry.  However, paragraph 68(1)(f) provides that the following goods do not have to be the subject of a formal import entry:


(f) goods, other than prescribed goods:

(i)      that are included in a consignment consigned otherwise than by post by one person to another; and

(ii)      that are all transported to Australia in the same ship or aircraft; and

(iii)     that have a value not exceeding $250 or such other amount as is prescribed.


Item 1 of Schedule 1 to the Regulations inserts new regulation 31AC into the Customs Regulations 1926.


New regulation 31AC prescribes a value of $1,000 for subparagraph 68(1)(f)(iii) of the Act.  This means that goods imported other than by post, that is by sea and air, that have a value not exceeding $1,000 will not have to be the subject of a formal import entry.  This amendment aligns the threshold value of such goods with the threshold value of goods imported into Australia by post.


This was intended to address the recommendations of the Commonwealth Competitive Neutrality Complaints Office (CCNCO) Report No 5 of 2000 "Customs Treatment of Australia Post".  This report commented on the imbalance in the Customs treatment of entry requirements for goods imported by air/sea compared with postal importations.  Among the recommendations in the CCNCO's report was that the entry threshold values should be aligned at levels that strike an appropriate balance between revenue collection, risk management and administrative efficiency.


Application provisions apply this new threshold to the same goods to which the Act, as amended by the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act) applies.


Any change to the formal import entry threshold affects importers and their agents, the industry sector managing the importation of goods into Australia (express couriers, freight forwarders, customs brokers, the Australian Postal Corporation).  Customs has been in detailed consultation about the threshold with stakeholders since early 2004.


The Customs National Consultative Committee, comprising representatives of major industry stakeholders, meets quarterly to discuss Customs legislative and administrative issues, and has received regular updates on threshold developments.


The requirement for a formal import entry threshold is integral to the import module of the Integrated Cargo System (ICS).  As part of the rollout of the ICS, the Minister for Justice and Customs has held a quarterly roundtable meeting with industry representatives.  Discussion of the formal import entry threshold was an agenda item at these meetings, and industry was kept informed of the requirement for the Government to consider the administrative and revenue implications of a changed threshold.


Customs (along with the Australian Quarantine and Inspection Service) meets quarterly with the Australia Postal Corporation as part of a tripartite agreement.  Customs has had ongoing discussions among this group about business process matters, including workload implications under a changed formal import entry threshold.


Once a preferred position was arrived at for the formal import entry threshold the Commonwealth Government consulted with the State and Territory Governments about the impact on Goods and Services Tax revenue.


Harmonising the formal import entry threshold promotes a significant reduction in 'red tape' for a large number of importers and other stakeholders involved in the importation of goods.  It treats all modes of transport into Australia in the same manner and results in a transparent method of calculating customs duty and GST.


The Regulations commence on the day after they are registered.




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