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Bills Digest 62 1996-97
Customs Amendment Bill (No. 2) 1996
WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments.
This Digest was available from 4 December 1996.
CONTENTS
Customs Amendment Bill (No. 2) 1996
Date Introduced: 7 November 1996
House: House of Representatives
Portfolio: Industry, Science and Tourism
Commencement: Schedule 1 will commence on a day to be fixed by
Proclamation, or on the first day after the end of six months after it
receives Royal Assent.
The major amendments:
- impose a liability to pay cargo report processing charge;
- impose a liability to pay screening charge;
- reduce from $1 000 to $250 the threshold above which an import entry
is required to be lodged for goods imported into Australia through the
Post Office;
- impose a liability to pay entry processing charge;
- introduce a new licensing regime in relation to depots handling imported
goods;
- impose a liability to pay warehoused goods entry fee;
- impose a liability to pay depot licence application charge and depot
licensing charge.
Origin and Rationale for Proposed Measures
The Government announced in the 1996-97 Budget that it would legislate
for the cost recover of elements of the Australian Customs Service commercial
activities directly or indirectly required to process import transactions.(1)
The Government gave an undertaking that the costs to be recovered would
not include export transaction costs, investigation costs or the costs
of public benefit functions.(2)
In a Press Release of 20 August 1996, the Minister for Small
Business and Consumer Affairs provided a rationale for the proposed cost
recovery measures, namely, 'These cost recovery measures are a necessary
part of a Government - wide push to reduce the Budget deficit created
by Labor.' The rationale given by the Minister in the Second Reading Speech
to the Bill for the proposed cost recovery measures is that 'This measure
is consistent with the general thrust of government policy which increasingly
sees the closer alignment of service delivery costs with sectors of the
community which generate the workload.'
Industry and Consumer Reaction
Media reporting of industry reaction for the proposed cost recovery
measures has been limited and largely restricted to the pre-budget period.
For example, Air express companies were reported in The Canberra Times
of 13 August 1996 to have sought to head off a Budget move to have the
industry collect a $10 tax on all import and export transactions on behalf
of the Australian Customs Service by foreshadowing a constitutional challenge
to such arrangements.(3) The Council of Asia Pacific Express Couriers
is reported in The Australian Financial Review of 14 August 1996
as saying 'Customs had proposed the new charge for inclusion in the federal
Budget on the basis of user-pays for customs import and export entry transactions.
... The proposed $10 charge would increase the cost of both importing
goods into Australia and exporting goods from Australia. It would have
a greater impact on low-value items such as books and compact discs.'
While, the Second Reading Speech to the Bill clearly indicates
that the Government has consulted extensively with industry about the
proposed cost recovery measures, the views and impact of the measures
on industry and consumers remain unclear. To gauge industry reaction the
reader may contact the following bodies: the Council of Asia Pacific Express
Couriers; the Australian Air Transport Association; the Australian Chamber
of Shipping; the Australian Federation of International Forwarders; the
Customs Brokers Council of Australia; the International Air Couriers Association;
and the Consumers Federation of Australia.
Estimated Increases in Revenue
As noted in the Second Reading Speech to the Bill, this Bill
is the first of three in a package providing for the proposed cost recovery
measures. The other two Bills in the package are the Customs Depot Licensing
Charges Bill 1996 and Import Processing Charges Bill 1996.
It is estimated in the Explanatory Memorandum to the Bill that
the proposed cost recovery measures will increase revenue in 1996-97 by
a net amount of $186 000. This amount is estimated to rise to $372 000
by 1998-99. The Customs Depot Licensing Charges Bill 1996 and Import Processing
Charges Bill 1996 are estimated to increase revenue in 1996-97 by $23.155
million. This amount is estimated to rise to $45.561 million in 1998-99.
Cost of Customs Services Performed Outside Prescribed Times
New subsections 28(2) and (3) are inserted in the Customs
Act 1901 (the Principal Act) by item 7 of Schedule 1. Under
the proposed subsections, where a Collector (eg. the Chief Executive Officer,
the Regional Director for a State/Territory, or any Customs officer doing
duty in the matter in relation to which the term is used) arranges, at
the request of a person, for a Customs officer to be available outside
prescribed hours, the person must pay an overtime fee. The overtime fee
is $40 per hour or part hour or a prescribed rate, and any prescribed
travel expenses. A location fee will be payable where a Customs officer
has to perform a function in a place that is not one where such a function
is normally carried out and during the hours prescribed for that function.
The location fee is $37 per hour or part hour or a prescribed rate, and
any prescribed travel expenses.
Remark
Under current subsection 28(1) of the Principal Act the regulations
may prescribe the days on which, and the hours between which, Customs
officers are available to perform specified functions. Under subsections
28(2) and (3), where a person requests a Customs Officer to perform a
outside prescribed times, or in a place that is not one where the function
is normally carried out, a fee is payable. The amount of the fee is determined
by the Chief Executive Officer having regard to the cost of making the
Customs Officer available.
Liability to Pay Cargo Report Processing Charge and Screening Charge
New sections 64ABB and 64ABC, dealing with liability to pay cargo
report processing charge and screening charge, are inserted in the Principal
Act by item 10 of Schedule 1. A person will be liable to pay the
cargo report processing charge (which is formally imposed by the Import
Processing Charges Bill 1996) where they communicate to the Australian
Customs Service (ACS) a documentary report that is, or is part of, a cargo
report which provides particulars of a consignment and identifies a person
having a beneficial interest in the goods in the consignment.
Similarly, a person will be liable to pay the screening charge (which
is formally imposed by the Import Processing Charges Bill 1996), in addition
to any cargo report processing charge, where they communicate the ACS
a report that:
- is, or is part of, a cargo report of goods intended to be, or that
have been, unloaded from an aircraft at a particular airport;
- relates, in whole or part, to a consignment of goods that does not
require entry;
- provides particulars of the consignment; and
- identifies a person who has a beneficial interest in the goods
in the consignment.
Requirement to Lodge an Import Entry
Item 12 of Schedule 1 omits $1 000 from paragraph (e) of subsection
68(1) of the Principal Act and substitutes $250. The effect of the amendment
is to require an import entry for goods imported into Australia through
the Post Office costing more than $250. Such goods will also be liable
to pay the proposed entry processing charge. An import entry is a communication
to the ACS of certain information concerning the goods.
Remarks
Paragraph 68(1)(e) of the Principal Act currently requires an
import entry for goods imported into Australia through the Post Office
costing more than
$1 000.
No rationale is provided in the Explanatory Memorandum to the
Bill for the amendment proposed by item 12. The rationale could be either
revenue raising or statistics gathering, or both.
Whatever the rationale for the amendment it will add to the cost of
goods imported into Australia through the Post Office. For example, a
person places an order on the Internet for an educational text, compact
disks or some computer software with a company in London. The good costs
more than $250. The order is duly imported through the Post Office. That
person will be required to lodge an import entry with the ACS and pay
the proposed entry processing charge.
ACS not to Authorise Delivery Unless Screening Charge Paid
A new subsection 71(3) is inserted in the Principal Act by item
14 of Schedule 1 which provides that the ACS must not allow the delivery
of goods of a kind referred to in paragraph 68(1)(f) (ie. requirement
for an import entry for goods imported into Australia through the Post
Office costing more than $1 000 [$250 proposed]) unless:
- the person liable to pay screening charge (which is formally imposed
by the Import Processing Charges Bill 1996) pays that charge; or
- the person liable to pay the charge is entitled to pay that charge
in accordance with subsection 64ABD(1) - (3) (these subsection provides
for the making of arrangements for payment of cargo report processing
charge or screening charge).
Liability for Entry Processing Charge
A new section 71AA, dealing with liability to pay entry processing
charge, is inserted in the Principal Act by item 18 of Schedule 1.
A person will be liable to pay the entry processing charge, which is formally
imposed by the Import Processing Charges Bill 1996), where an import entry
is, or is taken to have been, communicated to the ACS under section 71A
of the Principal Act.
Where one person who is the owner of goods has paid entry processing
charge in respect of an import entry, any other person who is also an
owner will cease to be liable to pay entry processing charge. There will
also be no liability for entry processing charge whee an import entry
is withdrawn.
Liability To Pay Warehoused Goods Entry Fee
A new section 71AB is inserted in the Principal Act by item
19 of Schedule 1 which makes the owner of warehoused goods who enters
the goods for home consumption liable to pay the warehoused goods entry
fee. Warehoused goods are defined in subsection 4(1) of the Principal
Act to be goods received into a warehouse in pursuance of an import entry,
or goods blended or packaged in a warehouse. The proposed section contains
a formula for working out the amount of warehoused goods entry fee. This
is the FR (the flat rate) plus the LR (line rate) multiplied by the number
of relevant lines. The flat rate for:
- a computer import entry will be $5.00, or a prescribed amount; or
- a documentary import entry will be $26.75, or a prescribed amount.
The line rate for:
- a computer import entry will be $0.20, or a prescribed amount, for
each line after the tenth line of the entry; or
- a documentary import entry will be $0.80, or a prescribed amount,
for each line after the first line of the entry.
The term 'line' is defined to mean the description of goods covered
by the import entry that come within a single tariff classification to
which a duty attaches.
Depots
A new Part IV (proposed sections 77F-77ZA), dealing with
depot licences, is inserted in the Principal Act by item 25 of Schedule
1. Power to grant a depot licence is vested in the Chief Executive
Officer (CEO). The CEO may grant a depot licence to use a place for certain
purposes, including: the holding of imported goods; the holding of goods
for export; the examination of goods by ACS officers; or for a specified
purpose/s (proposed section 77G).
Under proposed section 77H, applications for a depot licence
must be made by the person or partnership who would occupy and control
the depot. Applications must be accompanied by the proposed depot licence
application charge. Australia Post will not be liable to pay the proposed
depot licence application charge where it applies for the whole or a part
of an International Mail Centre to be covered by a depot licence.
The CEO must not grant a depot licence in certain circumstances, including:
- if the applicant, is a natural person, and is not a fit and proper
person to hold a depot licence (In making a determination whether a
person is a fit and proper person, the CEO is to have regard to certain
matters including whether he/she has any prior convictions committed
within the previous 10 years and whether he/she is an insolvent under
administration.);
- the applicant, if it is a company, is not a fit and proper company
to hold a depot licence (In making a determination whether a company
is a fit and proper company, the CEO is to have regard to certain matter
including whether the company has any prior convictions committed within
the previous 10 years and at a time when any person who is currently
a director, officer or shareholder was a director, officer or shareholder
of the company.); and
- the physical security of the proposed depot is not adequate having
regard to the nature of the place, the procedures and methods for ensuring
the security of goods and the records that would be kept would not be
suitable to all the ACS to adequately audit those goods (proposed
section 77K).
Proposed section 77K also provides that the CEO:
- may refuse to grant a depot licence if he/she believes that the proposed
depot would be too remote from the nearest place where ACS officers
regularly perform their functions for them to conveniently check compliance
with Customs Acts;
- must not grant a depot licence where the depot is to be used for imported
goods arriving by sea and the applicant is not a registered user of
the Sea Cargo Automation System;
- must not grant a depot licence where the depot is to be used for imported
goods arriving by air and the applicant is not a registered user of
the Air Cargo Automation System; and
- must not grant a depot licence where the depot is to be used for imported
goods arriving by sea and air and the applicant is not a registered
user of the Sea Cargo Automation System and Air Cargo Automation System.
Proposed section 77L deals with the granting of a depot licence.
The CEO must make a determination as to the grant of a depot licence within
60 days of the receipt of an application or, where the CEO requires the
applicant to provide additional information in relation to the application,
within 60 days of the receipt of that additional information. Where the
CEO does not make a decision within 60 days this will be taken to be a
refusal.
Proposed sections 77N-77Q deal with depot licence conditions.
All depot licences will be subject to certain general conditions. Provision
is also made for specified conditions to attach to a depot licence. General
conditions include:
- payment to the ACS any prescribed travelling expenses payable in relation
to travelling to and from the depot by a Collector;
- stacking and arranging goods in the depot so that ACS officers have
reasonable access to, and can examine, the goods;
- when requested to do so by the ACS, allow ACS officers to enter and
remain in the depot to examine goods which are subject to control of
the ACS, or which an ACS officer has reasonable grounds for believing
are subject to ACS control; and
- retaining for five years from the day goods are received into the
depot, of related commercial records and records created as required
by Customs Acts.
The CEO is accorded power under proposed section 77Q, for the
purpose of ensuring compliance with Customs Acts, or protecting revenue,
to specify conditions in a depot licence in addition to the general conditions
specified in proposed sections 77N and 77P and to vary specified
conditions.
Proposed section 77R makes it an offence, punishable by a maximum
fine of 50 penalty units ($5 000), for the holder of a depot licence to
breach a proposed section 77N-77Q licence condition.
Proposed section 77U requires a depot licensing charge to be
payed for the grant of a depot licence by the person or partnership seeking
it. As with the proposed depot licence application charge (see proposed
section 77H), Australia Post is not liable to pay the depot licence charge
for each grant or renewal of a depot licence that covers the an International
Mail Centre.
Remark
The Explanatory Memorandum to the Bill does not contain an interpretation
of proposed section 77U.
Proposed section 77V accords the CEO the power to revoke a depot
licence in certain circumstances. The circumstances, for the most part,
are identical to the conditions which apply to an application for a depot
licence under proposed 77K.
Refund Application Fee
Section 163 of the Principal Act deals with refunds, rebates and remissions
of duty. A fee of $200 is payable for an application for a refund of duty
paid. Subsection 163(1D) sets out the circumstances in which the $200
fee is not payable, these circumstances include:
- where a ACS officer assisted in making up the entry in respect of
which the application for a refund of duty is made;
- where the duty was paid under protest;
- where the duty was paid as a consequence of advice given, or a ruling
made, by a ACS officer; and
- where all duty amounts were paid in good faith.
The current $200 fee and exceptions are being repealed by item 26
of Schedule 1 and new subsections 163(1C) and (1D) substituted.
Under proposed subsection 163(1C), where a person makes an application
for a refund of duty paid they will be liable to pay the refund application
fee. Proposed subsection 163(1D) specifies what amount of the refund application
fee is payable. The refund application fee is:
- where the application is transmitted to the ACS via a prescribed computer
system, $45.00, or a prescribed amount; or
- where the application is made in an approved form, $65.00, or a prescribed
amount.
Remark
As noted, subsection 163(1D) sets out circumstances where the
fee for a refund of duty paid is not payable. This subsection, and as
a consequence the exemptions from the fee, is being repealed. This raises
the question of whether any exemptions will apply under the newly constituted
section 163. The Note to item 26 states that 'Regulations made
under paragraph 163(1)(b) may provide that under certain circumstances
a person is entitled to a refund of duty without the need to make an application.
In those cases an application fee is therefore not payable under subsection
163(1C).' It might be inferred from the Note that paragraph 163(1)(b)
will be used to provide exemptions to the proposed refund application
fee.
Review of Decisions by Administrative Appeals Tribunal
Section 273GA of the Principal Act lists those decisions for which an
application may be made to the Administrative Appeals Tribunal for a review.
Item 30 of Schedule 1 includes in the list:
- a decision by the CEO under proposed section 77G not to grant a depot
licence;
- a decision by the CEO under proposed section 77J not to extend the
period within which further information concerning a depot licence application
is to be supplied;
- a decision by the CEO under proposed section 77P not to grant an extension
of time for goods to be warehoused;
- a decision by the CEO under proposed section 77Q to vary the conditions
of a depot licence; and
- a decision by the CEO under proposed section 77V to revoke a depot
licence.
- Budget Statements 1996-97, Budget Paper No. 1, p. 4-24.
- ibid.
- The Canberra Times, 13 August 1996, p. 2.
Ian Ireland Ph. 06 277 2438
2 December 1996
Bills Digest Service
Parliamentary Research Service
This Digest does not have any official legal status. Other sources should
be consulted to determine whether the Bill has been enacted and, if so,
whether the subsequent Act reflects further amendments.
PRS staff are available to discuss the paper's contents with Senators
and Members and their staff but not with members of the public.
ISSN 1323-9031
© Commonwealth of Australia 1996
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Published by the Department of the Parliamentary Library, 1996.
This page was prepared by the Parliamentary Library, Commonwealth of
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Last updated: 2 December 1996
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