Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS REGULATIONS (AMENDMENT) 1995 NO. 424

STATUTORY RULES 1995 No. 424

Issued by the Authority of the Minister for Small Business, Customs and Construction

Customs Act 1901

Customs Regulations (Amendment)

Section 270 of the Customs Act 1901 (the Act) provides in part that..

"(1)       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 Customs, ..."

The purpose of the Regulations is to amend the Customs Regulations (the Regulations) to insert new circumstances for the remission of customs duty payable on fuel oil for use in the calcination process for the refining of bauxite into alumina.

Section 163 of the Act provides that remissions, rebates and refunds of customs duty may be allowed in respect of goods in such circumstances, and subject to such conditions and restrictions, as are prescribed. Regulation 126 prescribes the circumstances in which remissions, rebates or refunds of customs duty may be allowed for the purposes of section 163.

The Regulations have been amended to provide a customs duty concession for fuel oil used in the refining of bauxite into alumina in circumstances where refineries are located in areas not presently supplied by natural gas. This amendment is intended to remove a commercial disincentive faced by some alumina producers who do not have access to the cheaper energy source of natural gas.

The Regulations have been amended to insert a new remission circumstance that applies where fuel oil is for use in the calcination process for the refining of bauxite into alumina and the fuel oil is for use at a place that is either not supplied by natural gas or at which natural gas is not readily available.

Regulation 2.1 amends the Regulations by inserting new paragraph 126(1)(v).

New paragraph 126(1)(v) inserts the new remission circumstance in respect of fuel oil that is for use in the calcination process for the refining of bauxite into alumina.

New paragraph 126(1)(v) provides for the remission of excise duty in the circumstance where fuel oil:

(i) is delivered for home consumption in accordance with the permission given under section 69 of the Act; and

(ii) is for use at a place that is either not supplied by natural gas or at which natural gas is not readily available; and

(iii) is for use as a chemical reactant in the calcination part of the Bayer process for the refining bauxite into alumina.

The combination of these factors will limit the application of the remission circumstance to those areas of Australia in which alumina refineries are placed at a commercial disadvantage vis a vis their competitors because they do not have access to natural gas as their energy source.

This remission circumstance is limited to a petroleum product that is delivered in accordance with a permission under section 69 of the Act. Section 69 allows a Collector to give permission for goods to be taken into home consumption without the normal requirements of an entry having to be made in respect of the goods. These permissions facilitate the more manageable reconciliation of one's customs duty liability by effectively permitting one's customs debt to be settled periodically rather than every time excisable goods are moved into home consumption. However, to ensure the concession does not result in an unacceptable risk to the public purse, such permissions are subject to requirements specified in the permission that are necessary for the protection of the revenue or for the purpose of ensuring compliance with the Act. Such requirements include record keeping obligations and audit powers to enable the verification of the movement of goods.

Under this circumstance, the amount of the remission will be 100 percent of the customs duty that is payable on the fuel oil.

This proposed new remission circumstance commenced on the date on which the amending regulations were gazetted.