Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS REGULATIONS (AMENDMENT) 1996 NO. 326

STATUTORY RULES 1996 No. 326

Issued by the Authority of the Minister for Small Business and Consumer Affairs

Customs Act 1901

Customs Regulations (Amendment)

Section 270 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 for giving effect to the Act.

Section 168 of the Act provides that the regulations may make provision "for and in relation to allowing drawbacks of duty paid on goods imported into Australia".

Subsection 163(1) of the Act provides that refunds, rebates and remissions of duty may be made "in respect of goods generally or in respect of the goods included in a class of goods" and in "such circumstances, and subject to such conditions and restrictions (if any), as are prescribed..." and subsection 163(1A) provides that the "regulations may prescribe the amount, or the means of determining the amount, of any refund, rebate or remission of duty that may be made for the purposes of subsection (1). "

These amendments to the Customs Regulations ("the Regulations") provide for the eligibility for the payment of drawback in respect of goods on which any of the various dumping and countervailing duties under the Customs Tariff (Anti-Dumping) Act 1975 ("the Anti-Dumping Act") have been paid.

Drawback is a repayment of the duties previously paid on imported goods that is allowed on the exportation of the goods, or of goods incorporating them, or of goods produced or manufactured from them.

The Industry Commission in its report on Packaging and Labelling (February 1996) raised the issue of dumping duties not being eligible for drawback. As a result of this finding, the Government sought advice from the Australian Government Solicitor's Office which advised that while the head of power in section 168 of the Act is broad enough to support regulations being made for these duties, as the Regulations stood, these duties were not eligible for drawback because they could not be described properly as import duties.

It is in accordance with Government industry policy for drawback to be paid in respect of the various dumping and countervailing duties, as the underlying principle of the drawback system is that the Government has a policy which provides exports and exporter industries with the benefit of world price inputs.

To the extent that dumping duty is often substantial and, in theory at least, applies for a comparatively short period of time, it would seem that Australian exporter industries could be disadvantaged during that short period of time by the permanent loss of overseas markets due to increased costs, and therefore increased prices, on their exported production. In this regard, dumping duties could have a more immediate and .substantial effect on exporter industries than normal duties.

In addition, the amendments provide for a new refund circumstance where certain goods have been exported after 30 June 1996, and before the commencement on gazettal of these regulations, to permit a refund of any of the various dumping and countervailing duties under the Anti-Dumping Act.

The effect of these two sets of provisions is that from 1 July 1996 the amount of dumping and countervailing duties paid on the relevant goods can be returned either by way of refund, in respect of past exportations, or by drawback, in respect of exportations taking place after the date of gazettal of the Regulations.

Details of the Regulations are set out in the Attachment.

The Regulations commenced on gazettal.

ATTACHMENT

Regulation 1 - Amendment

Regulation 1 provides that the Customs Regulations ("the Regulations") are amended as set out in these regulations.

Regulation 2 - Regulation 126 (Circumstances under which refunds, rebates and remissions are made)

Regulation 2 inserts a new refund circumstance in subregulation 126(1) at paragraph (w).

This refund circumstance is designed to allow a refund of duty to be paid in certain circumstances where goods were exported after 30 June 1996 and before the commencement of new regulation 139 (regulation 4 refers) on gazettal of these regulations.

The relevant circumstances are:

(i) where dumping duty within the meaning of new regulation 139 was paid on the goods. The term dumping duty is defined in new regulation 139 to mean any of the following duties under the Customs Tariff (Anti-Dumping) Act 1975 (the Anti-Dumping Act): dumping duty, interim dumping duty, third country dumping duty and interim third country dumping duty, countervailing duty, interim countervailing duty, third country countervailing duty and interim third country countervailing duty (regulation 4 refers). This covers the situation where goods were imported into Australia and were then subsequently exported in the same form (subparagraph 126(1)(w)(i)); or

(ii) where the goods that were exported were specified goods within the meaning of subregulation 131 (1), as applied by subregulation 139(2) regulation 4 refers). This covers the situation where goods on which dumping duty was paid (as defined by new regulation 139(1) (regulation 4 refers) and set out above) were imported into Australia and were then used in the manufacture of other goods or were subjected to a process or to treatment in Australia and so were exported in a different form to that in which they were imported subparagraph 126(1)(w)(ii); or

(iii) where the imported goods on which dumping duty has been paid (as defined by new regulation 139(1) regulation 4 refers) and set out above) were used in the manufacture or treatment of other goods which were then exported. This covers the situation contemplated by regulation 132 of the Regulations, namely where imported goods on which dumping duty has been paid are mixed with like goods produced in Australia and the mixture or part of the mixture is used in the manufacture or treatment of other goods (subparagraph 126(1)(w)(iii) .

As the provisions which allow the drawback of dumping duty (as defined in new regulation 139(1) (regulation 4 refers) and set out above) did not commence until the gazettal of these regulations, the new refund circumstance provides the mechanism for allowing the return of dumping duty from 1 July 1996.

Regulation 3 - Regulation 128B (Calculation of refunds or remissions of duty)

Regulation 3 inserts a new subregulation 128B(6). This provision ensures that the amount of a refund that can be paid under new paragraph 126(1)(w) (regulation 2 refers) is the amount of drawback that would have been payable under the Regulations if the drawback provisions applying to dumping duties proposed in these regulations had been in force when the goods were exported.

Regulation 4 - New regulation 139

Regulation 4 inserts a new regulation 139 in the Regulations. This new regulation provides the basis for allowing the payment of drawback in respect of goods on which any of the various dumping and countervailing duties under the Anti-Dumping Act have been paid.

Part IX of the Customs Act 1901 ("the Act") contains section 168 which deals with "Drawbacks". This section provides that the regulations may make provision "for and in relation to allowing drawbacks of duty paid on goods imported into Australia".

The Industry Commission in its report on Packaging and Labelling (February 1996) raised the issue of dumping duties not being eligible for drawback. As a result of this finding, the Government sought advice from the Australian Government Solicitor's Office which advised that while the head of power in section 168 of the Act is broad enough to support regulations being made for these duties, as the Regulations previously stood, these duties were not eligible for drawback because they could not be described properly as import duties.

It is in accordance with Government industry policy for drawback to be paid in respect of the various dumping and countervailing duties, as the underlying principle of the drawback system is that the Government has a policy which provides exports and exporter industries with the benefit of world price inputs.

To the extent that dumping duty is often substantial and, in theory at least, applies for a comparatively short period of time, it would seem that Australian exporter industries could be disadvantaged during that short period of time by the permanent loss of overseas markets due to increased costs, and therefore increased prices, on their exported production, In this regard, dumping duties could have a more immediate and substantial effect on exporter industries than normal duties.

New subregulation 139(1) specifies the eight dumping and countervailing duties that are now covered by the drawback provisions. These are the following duties under the Anti-Dumping Act: dumping duty, interim dumping duty, third country dumping duty and interim third country dumping duty, countervailing duty, interim countervailing duty, third country countervailing duty and interim third country countervailing duty.

New subregulation 139(2) provides that each of the relevant drawback provisions of the Regulations (namely, regulations 129, 131, 132, 133, 134, 135, 136, 136A, 136B, 137, 138A and 138B) apply in relation to imported goods on which dumping duty has been paid as if references in those regulations to import duty were references to dumping duty (as defined in new subregulation 139(1)).

New subregulation 139(3) provides that subregulations 134(2) and 134(3) are not applied in relation to imported goods if they were used in the manufacture or production of specified goods within the meaning of subregulation 13 1 (1) and the manufacture or production started before this regulation commenced.

Without this provision, imported goods that had been used in the manufacture or production of specified goods within the meaning of subregulation 13 1 (1) prior to the commencement of regulation 139 could not have been eligible for drawback as requirements to inform a Collector of the necessary matters under regulation 134 could not have been complied with.