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EXCISE REGULATIONS (AMENDMENT) 1995 NO. 314EXPLANATORY STATEMENT
STATUTORY RULES 1995 No. 314
Issued by the Authority of the Minister for Small Business, Customs and Construction
Excise Act 1901
Excise Regulations (Amendment)
Section 164 of the Excise Act 1901 (the Act) provides in part that:
"The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed ... for giving effect to this Act or for the conduct of business relating to the Excise, ....."
The purpose of these Regulations is to amend regulation 186 of the Excise Regulations (the Regulations) to maintain exemption from excise duty liability for stores for consumption in certain aircraft engaged on international air services.
Regulation 186 of the Regulations provides for exemption from excise duty liability for stores of aircraft falling to specific classes. In particular, paragraph 186(2)(c) exempts the stores of aircraft other than Australian aircraft only if those aircraft are operating under an "intergovernmental agreement" between the Commonwealth and the government of another country. Generally, such international agreements are bilateral arrangements between the Commonwealth and the Government of another sovereign state in accordance with the principles of the multilateral Chicago Convention on International Civil Aviation.
Air services between Australia and Taiwan are operated under non-government bilateral arrangements, as the Commonwealth does not recognise Taiwan as a sovereign state. In 1991 the Regulations were amended to facilitate the commencement of international air services between Australia and Taiwan. Those amendments inserted paragraph 186(2)(ba) to provide duty exemption for stores for consumption or use in an aircraft that is engaged on a flight approved under subsection 15(1) of the Air Navigation Act 1920 (which covers flights by foreign aircraft not possessing the nationality of a Contracting State to the Chicago Convention on International Civil Aviation).
The Government is now in the process of regularising the approval process for Taiwanese air operations and those services are no longer to be approved under section 15(1). Although the air services remain under non-government bilateral arrangements, they will be approved as scheduled services under the standard licensing and timetable provisions of the Air Navigation Act 1920 and associated regulations.
These Regulations maintain the duty exemption for stores for consumption in Taiwanese aircraft. The proposed Regulations amend regulation 186 by:
(i) omitting "intergovernmental agreement" (wherever occurring) in paragraph 186(2)(c) and substituting "bilateral arrangement" (subregulation 2.1 refers); and
(ii) inserting a definition providing that "bilateral arrangement" has the same meaning as in the International Air Services Commission Act 1992 (the IASC Act) (subregulation 2.2 refers).
The IASC Act defines "bilateral arrangement" to mean:
"... an agreement or arrangement between:
(a) Australia, or an entity or organisation nominated or otherwise similarly authorised by Australia to enter into the agreement or arrangement; and
(b) another country;
under which the carriage by air of passengers or freight, or both passengers and freight, between Australia and the other country is permitted".
This definition covers all those arrangements previously covered by the term "intergovernmental agreement" as weft as arrangements with Taiwan due to the further definition in the IASC Act of "another country" as including:
"... any region:
(a) that is part of a foreign country; or
(b) that is under the protection of a foreign country; or
(c) for whose international relations a foreign country is responsible."
Paragraph 186(2)(ba) of the Regulations is not repealed as the Government intends to continue the benefit of the duty exemption for other international flights approved under subsection 15(1) of the Air Navigation Act 1920.
The Regulations commenced on gazettal.