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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
Tradex Scheme Bill 1999
Date Introduced: 24 June 1999
House: House of Representatives
Portfolio: Industry, Science and Resources
Commencement: On a day to be fixed by
proclamation or if no such day is fixed within 6 months of the Bill
receiving Royal Assent, at the end of that period.
To establish the
Tradex Scheme. The object of the Tradex Scheme is to allow for the
importation of goods, without payment of duty, provided the goods
are subsequently exported or incorporated in goods that are
exported. The Tradex Scheme replaces the Duty Drawback and Tariff
Export Concession schemes.
Origin
In its 'Investing for Growth' industry statement
the Government announced two schemes aimed at improving:
Australia's attraction as a site for regional
manufacturing and warehousing.(1)
The two schemes were the Manufacture in Bond
(MiB) scheme and the Tradex Scheme. The MiB Scheme, which came into
effect on 20 March 1998, exempts certain manufacturers from duty on
imported goods which are intended for re-export or used as inputs
to exports. The MiB Scheme was the subject of recent legislative
amendments.(2)
In relation to the Tradex Scheme, the Government
announced in its 'Investing for Growth' industry statement:
the consolidation of the Duty Drawback and
Tariff Export Concession schemes into one integrated and simplified
scheme to known as TRADEX at a cost to revenue of $105 million over
four years.(3)
The proposed introduction of the Tradex Scheme
follows an internal departmental review of the current regulatory
arrangements. According to the Explanatory Memorandum, the review
was undertaken in 1997 and found that up to 50% of eligible
businesses were not using the exiting TEXCO and Duty Drawback
Schemes, allegedly because of the high costs of accessing and
complying with the arrangements.
This Bill and the Tradex Duty Imposition Bill
1999 together with the Customs Tariff Amendment (Tradex) Bill 1999
provide the legislative basis for the Tradex Scheme.
Duty drawback scheme
The Duty Drawback Scheme allows exporters
refunds of payments of customs duty, sales tax or excise duty where
the goods will be treated, processed or incorporated in other goods
for export or when the goods are exported unused since importation.
Duty Drawback can only be claimed after goods have been exported.
Claims have to be lodged within 12 months of export and the minimum
claim per application is $50.(4)
Duty Drawback cannot be claimed where:
-
- exported goods will be returned to Australia
-
- goods have been used in Australia other than for the purposes
of exhibition, processing, treatment or further manufacture
-
- goods are valued at exportation at less than 25% of their
imported value; or for excisable goods that value of which is less
than the amount of the drawback claimed.(5)
Duty Drawbacks are processed by the Australian
Customs Service (ACS) on the basis of self assessment. Duty to be
drawn back may be calculated by the claimant a number of way,
including on: a shipment by shipment basis; a representative
shipment basis; or by imputation.
Tariff export concession scheme
(TEXCO)
The TEXCO Scheme allows exporters to obtain
imported goods without up front payments of customs duty, sales tax
or excise duty where the goods are to be treated, processed or
incorporated into other goods for export.(6)
The TEXCO Scheme is available to companies with
prospects of future exports and a proven record of exporting.
Participating companies are required to maintain certain accounts
for goods using the scheme and a reconciliation of goods using the
scheme and goods exported is required.
Clause 5 sets out the criteria which have to be
met by a person applying, varying or holding a tradex order. The
criteria include:
-
- that the person applying for, or an application for a variation
of, a tradex order intends to import nominated goods that are to be
subsequently exported
-
- that the holder of a tradex order has imported, and intends to
continue to import nominated goods that have been, or are to be,
subsequently exported, and
-
- that the export of nominated goods by a tradex order holder
occurred within one year after their entry for home
consumption.
Clause 6 sets out circumstances
where the holder of a tradex order may be disqualified from
participating in the Tradex scheme. The circumstances include:
-
- where any of the criteria under clause 5 have not been complied
with (except where a person became liable to pay tradex duty and
has paid that duty under clause 21)
-
- the person was ineligible to apply for a tradex order, and
-
- the person has failed to pay tradex duty.
Clause 9 provides for the
establishment of a Register of tradex orders. The Secretary of the
Department of Industry, Science and Resources is required to
establish the Register. The Register is to contain such particulars
as the Secretary considers appropriate. Holders of tradex orders
are to be notified of particulars entered in the Register in
respect of orders.
Parts 3-5 of the Bill
(clauses 10-20) deals with the making, variation,
revocation, suspension and cessation of tradex orders. Major
provisions include:
-
- the Secretary of the Department of Industry, Science and
Resources may refuse an application, wholly or partly, for a tradex
order except where: clause 5 criteria are complied with for
some or all of the nominated goods; the applicant is ineligible to
apply for a tradex order; and the applicant has not given the
Secretary false or misleading material and the applicant has not
failed to pay tradex duty
-
- where the Secretary refuses an application for a tradex order
the notice of the decision, must: set out the Secretary's findings
on material questions of fact; refer to the evidence or other
material on which the findings were based; and give reasons for the
decision
-
- where the holder of a tradex order becomes aware that they were
ineligible to apply for the order, or have become ineligible to
hold the order, they must within 7 days of becoming aware of the
ineligibility inform the Secretary of such
-
- the holder of a tradex order may apply for a variation of their
tradex order
-
- where it appears to the Secretary that any circumstances may be
disqualifying circumstances (see clause 6), other than
circumstances where the holder of a tradex order notifies the
Secretary of ineligibility, the Secretary must give the holder a
notice: setting out particulars of the circumstances; inviting the
holder within 4 weeks to give evidence that the circumstances do
not exist, or if the circumstances exist, that they are not
disqualifying circumstances.
-
- the Secretary must revoke a tradex order where the holder has
given notice of ineligibility, or the holder has not satisfied the
Secretary that disqualifying circumstances specified in a notice to
give reasons why tradex order should not be revoked exist.
Part 6 of the Bill
(clause 21) specifies the circumstances in which a
tradex order holder will be liable to pay tradex duty. The
circumstances include:
-
- where the nominated goods are consumed or used by the tradex
order holder in Australia
-
- where the nominated goods are disposed of or dealt with in any
way by the tradex order holder for the purpose of being consumed or
used by someone else in Australia, and
-
- the goods are not exported within one year of their entry for
home consumption.
Part 7 of the Bill
(clauses 22 and 23) imposes
certain requirements on tradex order holders in relation to the
keeping of records. For example, a tradex order holder will have to
keep records containing particulars relating to the storage of the
goods, the consumption or use of goods in Australia, and any
payment of tradex duty. The records are to be kept for a period of
5 years from the last occasion on which any act was done in
relation to the goods, or at the request or direction of, the
tradex order holder.
Part 8 of the Bill
(clauses 24 and 25) specifies the
powers of authorised officers in relation to tradex order
information. The powers accorded to authorised officers include the
power to:
-
- require the holder of a tradex order to make available for
examination specified documents which are in the
-
- holder's possession, or to which the holder has access, and
which are relevant to the disqualification criteria (see clause
6)
-
- require the holder of a tradex order to demonstrate the
operation of any record keeping or accounting system
-
- examine and to make and keep copies or take extracts from any
documents made available or found on premises entered.
The entry of premises will require a
warrant.
Part 9 of the Bill
(clauses 26-32) establishes a number of offences,
including:
-
- a failure by a tradex order holder to notify of any changes
entered in the Register (maximum penalty of $3,300)
-
- a failure by a tradex order holder to notify of ineligibility
to hold a tradex order (maximum penalty of $3,300)
-
- a failure by a tradex order holder to pay tradex duty (the
penalty is an amount equal to the amount of tradex duty that was
not paid) and
-
- a failure by a tradex order holder to keep the required records
in respect of any goods.
The Bill contains a mechanism for the issuing of
an infringement notice in lieu of immediate prosecution for not
paying tradex duty. Basically, under Part 10 of
the Bill (clauses 33-38), the Secretary is
provided with the option of issuing an infringement notice to a
tradex order holder if she/he believes that the holder has failed
to pay tradex duty. Where the person pays the unpaid tradex duty
and penalty specified in the notice (ie. one-fifth of the duty that
was not paid) any liability of the person for the offence specified
in the notice will be taken to be discharged.
Part 11 of the Bill
(clauses 39-49) contains miscellaneous provisions
relating to the Tradex Scheme. The major provisions:
-
- provide for the internal review of certain decisions (e.g.
refusal in whole or part to grant an application for a tradex
order)
-
- provide for review of by the Administrative Appeals Tribunal of
certain decisions (e.g. refusal in whole or part to grant an
application for a tradex order), and
-
- subject to disallowance by the Parliament, the Secretary may
approve a form for the purposes of this Bill.
-
- Press Release (Prime Minister), Investing for growth:
National Press Club, Canberra, 8 December 1997.
- Customs Amendment (Warehouses) Bill 1999 and Import Processing
Charges Amendment (Warehouses) Bill 1999.
- 8 December 1997.
- Australian Customs Service, 'Export Concessions: Duty
Drawback', FACT SHEET, August 1998.
- Ibid.
- Australian Customs Service, 'Tariff Export Concession (TEXCO)
Scheme', FACT SHEET, August 1997.
Ian Ireland
16 August 1999
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1999
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