House of Representatives

Taxation Laws Amendment (Excise Arrangements) Bill 2000

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Transfer of administration

Outline of chapter

1.1 This chapter explains the largely technical amendments to transfer the general administration of the Excise Act and related legislation from the CEO of Customs to the Commissioner.

Summary of the amendments

1.2 The amendments will redefine, repeal or amend Customs-related terms and references in the excise legislation. Consequential amendments will also be made to customs legislation and the TAA 1953.

1.3 As the excise legislation will fall within the meaning of taxation law, a number of provisions of the TAA 1953 will apply to the administration of excise laws. The excise legislation will be amended to expressly adopt the provisions of the TAA 1953 relating to approved forms and the processes for the review of appeals against decisions on excise matters.

1.4 The TAA 1953 will be amended to expressly adopt, for excise purposes, the provisions relating to the collection and recovery of tax-related liabilities. It will also be amended to expressly exclude the application of its offences and prosecution provisions to excise matters, as excise and DFRS offences will continue to be prosecuted under the provisions of the Excise Act.

1.5 A secrecy provision consistent with that of other taxation secrecy provisions will be inserted in the Excise Act to protect the confidentiality of excise information and documents.

1.6 Provisions in the excise legislation inconsistent with taxation administrative practices will be repealed. Redundant provisions in the Distillation Act and Spirits Act will also be repealed.

1.7 Technical drafting changes will be made to adopt gender-neutral language and to replace the maximum dollar amount of penalties stated for offences with the penalty unit standard specified by the Crimes Act. Other minor drafting changes correct references and add notes where appropriate.

Detailed explanation of new law

Background

1.8 Excise legislation comprises the:

·
Excise Act 1901 ;
·
Excise Tariff Act 1921 ;
·
Distillation Act 1901 ;
·
Spirits Act 1906 ;
·
Coal Excise Act 1949 ;and
·
Fuel (Penalty Surcharges) Administration Act 1997 and associated penalty surcharge imposition Acts.

1.9 The CEO of Customs currently has the general administration of customs and excise legislation and a number of provisions in those Acts are interrelated. As a consequence of portfolio changes made by the Administrative Arrangements Order of 21 October 1998, the excise legislation and the DFRS have been administered by certain ATO officers under delegation from the CEO of Customs. These amendments will give statutory effect to the transfer of administrative responsibility.

Definitions

1.10 The definition of CEO in the Excise Acts will be redefined as the Commissioner of Taxation rather than the CEO of Customs. [Schedule 2, item 4, definition of CEO in subsection 4(1); Schedule 4, item 2, definition of CEO in subsection 6(1); Schedule 5, item 3, definition of CEO in subsection 3(1); Schedule 6, item 2, definition of CEO in section 4; Schedule 7, item 10, definition of CEO in subsection 3(1)]

1.11 The general administration of the Excise Acts will be stated to be by the CEO, rather than the CEO of Customs. [Schedule 2, item 18, section 7; Schedule 4, item 1, section 3; Schedule 5, item 1, section 2A; Schedule 6, item 1, section 2A; Schedule 7, item 9, section 1A]

1.12 The Excise Acts provide for functions to be carried out by officers variously identified as the CEO, Collector, authorised officer or officer. The term Collector is currently a specific designation under the Customs Act. For excise purposes, Collector will be defined as meaning CEO or, where an authority is held by an authorised officer in relation to a section of the excise legislation which refers to Collector, that authorised officer. [Schedule 2, item 6, definition of Collector in subsection 4(1); Schedule 4, item 3, definition of Collector in subsection 6(1); Schedule 5, item 4, definition of Collector in subsection 3(1); Schedule 6, item 3, definition of Collector in section 4]

1.13 For excise purposes, the definition of officer as an officer of Customs will be redefined as a person employed under the Public Service Act 1999, who is exercising powers or performing functions in relation to a taxation law, as defined in the TAA 1953. [Schedule 2, item 12, definition of officer in subsection 4(1); Schedule 4, item 4, definition of officer in subsection 6(1); Schedule 5, item 7, definition of officer in subsection 3(1); Schedule 6, item 4, definition of officer in section 4]

Excise legislation will become taxation law

1.14 As the excise legislation will fall within the meaning of taxation law as defined in section 2 of the TAA 1953, the meaning of an approved form for excise purposes will be made consistent with that applicable to taxation legislation. Approved form will have the same meaning as that given by section 388-50 in Schedule 1 to the TAA 1953. The existing provisions relating to an approved form in section 4AA of the Excise Act will be repealed. [Schedule 2, item 1, definition of approved form in subsection 4(1) and item 16]

1.15 The provisions in the excise legislation relating to the review of certain decisions will be amended to adopt the procedure under taxation legislation for internal review by the Commissioner before the matter is referred to the AAT. Consequently, subsection 162C(1) of the Excise Act will be amended to provide that a person dissatisfied with a reviewable decision may object in the manner provided for in Part IVC of the TAA 1953. Minor amendments will be made to reflect terms used in the provisions of Part IVC. [Schedule 2, items 106, 108, 110, 111 and 112; Schedule 4, item 51, subsection 82B(1); Schedule 5, item 24, subsection 20(2); Schedule 6, item 20, section 27A]

1.16 This Bill also allows for changes proposed by the Administrative Review Tribunal Bill 2000 and makes amendments contingent on the commencement of the relevant parts of that Bill. [Schedule 2, item 109; Schedule 4, item 53; Schedule 5, item 26; Schedule 6, items 22 and 23]

1.17 The provisions relating to the recovery of debts arising under excise laws will be repealed and the collection and recovery provisions in the TAA 1953 will be adopted. [Schedule 2, item 107, section 161; Schedule 4, item 26, section 50A; Schedule 7, items 35 and 36]

1.18 Provisions in the excise legislation that empower the CEO of Customs to give directions concerning the exercise of powers of officers under the excise legislation will be repealed. [Schedule 2, item 71, section 83; Schedule 4, item 36, section 59B; Schedule 5, item 28, subsections 22(4) and (5); Schedule 6, item 18, subsections 25(2) and (3); Schedule 7, item 24, section 46]

1.19 Section 12A of the Excise Act is also inconsistent with taxation administration practice and will be repealed. This section provides that, where there is a proclamation under the Customs Act which has the effect of attaching a part of a State or Territory to an adjoining State or Territory for the purposes of the administration of the Customs Act, the provision will apply for the purposes of the Excise Act. [Schedule 2, item 20, section 12A]

Protecting the confidentiality of information

1.20 The confidentiality of information obtained by officers in the course of their employment for excise purposes is currently protected by a provision that applies to both customs and excise laws. As this provision will cease to operate for excise purposes, a provision will be inserted in the Excise Act to restrict the dissemination of information obtained for excise purposes.

1.21 A person who holds protected information or documents obtained in the course of official employment will be prohibited from making a record of the information or disclosing it to anyone else, except in specified circumstances. The penalty for a breach of this prohibition is imprisonment for 2 years or 500 penalty units. [Schedule 2, item 105, subsections 159(1) and (2)]

1.22 A person will be able to record or disclose protected information if:

·
the recording or disclosure is for the purposes of an excise law;
·
it happens in the course of official employment;
·
the person is the Commissioner or the Deputy Commissioner and the disclosure is to the CEO of Customs, to the Australian Statistician for census or statistics purposes, to another person carrying out functions under a taxation law or to the AAT in proceedings under a taxation law; or
·
the person making the disclosure has been authorised by the Commissioner or Deputy Commissioner to disclose the information and the disclosure is to the CEO of Customs, to Australian Statistician for census or statistics purposes or to another person carrying out functions under a taxation law.

[Schedule 2, item 105, subsection 159(3)]

1.23 There is no authorisation for disclosure to a Minister. [Schedule 2, item 105, subsection 159(4)]

1.24 Disclosure of information or production of a document can be made to a court if it is necessary for the purposes of an excise law. A person acting in the course of official employment will not otherwise be required to produce protected information or documents to a court. [Schedule 2 , item 105, subsection 159(5)]

1.25 Protected information will be defined as information obtained under an excise law in the course of official employment and relating to the affairs of another person. Protected documents will be documents made or given under, or for the purposes of, an excise law. Official employment will mean, as well as employment by the Commonwealth, performance of services for the Commonwealth or the exercise of powers or functions under a delegation by the Commissioner. [Schedule 2, item 105, subsection 159(6)]

Securities required under the Excise Act

1.26 There are linkages between the Excise Act and the Customs Act in dealing with excisable goods, where it is intended that the goods be exported. Under section 61 of the Excise Act, excisable goods are controlled for excise purposes until they are delivered for exportation, while under section 114C of the Customs Act, an authority to deal with the goods must be provided for goods that have been entered for export.

1.27 Under section 61AB, where an authority to deal with excisable goods in accordance with an export entry is granted under section 114C of the Customs Act, that authority is treated for the purposes of the Excise Act as a permission to deliver those goods for exportation. Section 16 of the Excise Act provides for the taking of securities for the protection of revenue and pending the giving of the required security, delivery of goods or passing of any entry may be refused. These amendments will add a note to section 16 to provide that authorities given under section 114C of the Customs Act can be subject to conditions relating to securities under section 16. [Schedule 2, item 23, section 16]

1.28 A note will also be added to section 61AB of the Excise Act to the effect that, if an authority under section 114C of the Customs Act to deal with goods is subject to a condition that any security is required under section 16 of the Excise Act, the authority is not taken to have been given until the security is given. [Schedule 2, item 41, note to section 61AB]

1.29 A corresponding amendment is to be made to section 114C of the Customs Act to provide that an authority to deal with goods may be subject to a condition that any security required under section 16 of the Excise Act be given. Where any such security is required, the authority is not taken to be given until that security has been given . [Schedule 3, item 13, subsection 114C(3A) and item 14, subsection 114C(5)]

Consequential amendments to excise legislation

1.30 Tables 1.1 to 1.6 set out the other amendments to the excise legislation that are required to redefine, amend or repeal provisions relating to Customs administration.

Table 1.1: Excise Act amendments
Replace this Act with any of the Excise Acts in the definition of authorised officer. Schedule 2, item 2
Delete of Customs. Schedule 2, items 3, 19 and 114
Insert definition of Industry Minister. Schedule 2, item 11
Relocate definition of officer of Customs to the provision relating to duty free shops. Schedule 2, items 14 and 49
Delete an officer of police or as it is an obsolete term. The term police officer remains. Schedule 2, item 15
Repeal section 13 - officers of Customs shall be officers of Excise and officers of Excise shall be officers of Customs. Schedule 2, item 20
Replace Customs with CEO. Schedule 2, items 21, 32, 34, 45 and 104
Replace Customs securities with securities taken for compliance with Excise Acts. Schedule 2, item 24
Delete Customs. Schedule 2, items 25 and 26
Replace control of (the) Customs or Customs control with the CEOs control. Schedule 2, items 27, 33, 35 to 38, 42 to 44, 46, 53, 74, 77, 81 and 82, 86 and 103
Replace Customs Acts with Excise Acts. Schedule 2, item 50
Replace the Customs with an officer. Schedule 2, item 56
Replace Minister for Primary Industry and Energy with Industry Minister. Schedule 2, items 59 and 60, 120 and 121
Delete to the Regional Director for a State or Territory. Schedule 2, item 61
Replace Customs with an authorised officer. Schedule 2, item 65
Delete officer of Customs or police and substitute officer or police officer. Schedule 2, items 79 and 80
Repeal the definition of by-law and rely on the ordinary meaning for references in the Act. Schedule 2, items 116 and 117
Replace Security to the Customs with Security under the Excise Act 1901 . Schedule 2, item 122
Replace the Customs of the Commonwealth of Australia with the CEO (as defined in that Act). Schedule 2, item 123
Table 1.2: Distillation Act amendments
Replace the control of the Customs with the CEOs control. Schedule 4, items 31 and 33
Replace subsection 73A(2) to improve clarity and for gender neutrality. Schedule 4, item 42
Replace collector with Collector. Schedule 4, item 50
Table 1.3: Spirits Act amendments
Replace Departmental By-laws with by-laws. Schedule 5, item 5
Replace control of the Customs with the CEOs control. Schedule 5, items 6, 13 and 16
Replace references to the Parts of the Customs Act which are to be incorporated where applicable with Parts of the Excise Act. Schedule 5, item 9
Delete of Customs. Schedule 5, items 12 and 23
Table 1.4: Coal Excise Act amendments
Amend references to sections of the Excise Act in the provisions to be incorporated into the Coal Excise Act. They have been repealed or have no relevance. Schedule 6, items 6 to 8
Replace the control of the Customs with the CEOs control. Schedule 6, item 19
Table 1.5: Excise Tariff Act amendments
Replace reference to control of the Customs or to Excise supervision with CEOs control. Schedule 7, items 11 and 12
Replace Departmental By-laws with by-laws. Schedule 7, items 13 to 16
Replace section 34 with Part IV. Schedule 7, items 17 to 19
Table 1.6: Fuel (Penalty Surcharges) Administration Act 1997
Delete of Customs. Schedule 7, items 20 and 25 to 27
Insert definition of CEO as Commissioner of Taxation. Schedule 7, item 21
Replace section 34 with Part IV. Schedule 7, item 22
Insert definition of officer. Schedule 7, item 23

Redundant provisions

1.31 The Distillation Act and the Spirits Act contain provisions that are no longer applicable or relevant to current practice. The amendments will repeal the following:

Distillation Act:

·
references to Part XIII and section 162A of the Excise Act which have been previously repealed [Schedule 4, items 6 and 7, subsection 8(1)] ;
·
the provision for the supervision of activities in the distillery by an officer and the requirements to be met by the distiller, including the provision of sufficient light, maintenance of burning lamps, etc. [Schedule 4, item 15, section 31] ;
·
the obligation on the distiller to receive into the distillery, distillation feed stock (wash, wine, etc.) or to mix different distillation feedstock within the distillery [Schedule 4, item 19, section 35] ;
·
the provisions requiring approval to remove spirits and for the checking of quantities after removal. Current practice relies on the provisions contained in section 61 of the Excise Act concerning movement of excisable goods [Schedule 4, item 22, sections 40 and 44] ;
·
the obligation on the distiller to close down operations for 12 hours on the last day of each month for accounting purposes [Schedule 4, item 28, section 52] ;
·
the requirement for operations to be carried out under the supervision of an officer and that the vigneron shall provide board and lodging for the officer [Schedule 4, item 30, sections 55 and 56] ;
·
the provision for remuneration to a person who provides board and lodging for an officer at the request of the Collector [Schedule 4, item 48, section 81] ;
·
the prohibition on the sale of Australian wine containing more than 23% by volume of alcohol, the addition of any wine to spirits for the purpose of reducing the strength of the spirits and the sale of any spirits reduced by the addition of wine [Schedule 4, item 46, section 76] ; and
·
the prohibition on the sale of spirits from a place within 90 metres of the distillery [Schedule 4, item 46, section 77] .

Spirits Act:

·
the provision that an officer may, at the request of an owner, mark the description on casks or vessels or label bottles [Schedule 5, item 10, subsection 7(2)] ;
·
the determination by the Commissioner whether spirits are inferior quality. This is no longer relevant as quality control is an industry responsibility [Schedule 5, item 14, section 13] ;
·
the Schedule for the standards for industrial spirits and mineralised spirits. These standards are no longer a requirement for end use provisions [Schedule 5, item 15 and 32, subsection 14(3) and Schedule 1] ;
·
the reference to spirits methylated before the commencement of the Act [Schedule 5, item 22, section 19] ; and
·
the limitation on the quantity of methylated spirits able to be sold or held in storage at any one time [Schedule 5, item 27, section 21] .

Penalty units

1.32 Penalties applying to offences under the excise legislation will be amended to refer to the appropriate penalty units in place of fixed amounts to reflect current practice in taxation legislation. A note will be added to the sections containing penalty units referring to section 4AA of the Crimes Act, which gives the current value of a penalty unit. The sections amended are set out in Table 1.7.

Table 1.7: Penalty units
Excise Act 3 penalty units Schedule 2, items 118 and 119
  10 penalty units Schedule 2, items 28 to 31, 54 and 55, 57, 63, 83, 90 and 96
  20 penalty units Schedule 2, items 97 and 98
  50 penalty units Schedule 2, items 47 and 48, 51 and 52, 58, 78, 87 and 88 and 92 to 95
  200 penalty units Schedule 2, items 101 and 102
  400 penalty units Schedule 2, item 100
  500 penalty units Schedule 2, item 91
Distillation Act 10 penalty units Schedule 4, items 14, 20, 29, 34 and 35, 37 and 39
  50 penalty units Schedule 4, items 8, 13, 16, 18, 38, 41 and 42, 45 and 47
  200 penalty units Schedule 4, item 32
Spirits Act 1 penalty unit Schedule 5, items 30 and 31
  10 penalty units Schedule 5, items 11 and 29
  50 penalty units Schedule 5, items 17 and 19
Coal Excise Act 2 penalty units Schedule 6, items 24 and 25
  10 penalty units Schedule 6, item 14
  20 penalty units Schedule 6, item 15
  50 penalty units Schedule 6, items 10, 13, 17

Gender neutrality

1.33 To achieve gender neutrality in the excise legislation, provisions in the Excise Acts that refer to he, him, his, himself are to have or she, or her or or herself added. Where appropriate he, him or his will be replaced with the person, distiller, Collector, officer or producer. [Schedule 2, items 84 and 85; Schedule 3, item 17; Schedule 4, items 9 to 12, 17, 21, 23 to 25, 27, 40, 43, 44 and 49; Schedule 5, items 2, 18, 20 and 21; Schedule 6, items 9, 11, 12 and 16]

Minor drafting changes

1.34 A number of minor changes of a technical drafting nature will also be made to correct drafting errors or to improve the language used in the legislation. [Schedule 2, items 7, 10, 39, 40, 62, 72, 73, 75, 76 and 115]

Application and transitional provisions

1.35 The amendments to be made by this Bill are to commence from the earlier of 1 July 2001 or 28 days from Royal Assent. [Subclause 2(1)]

1.36 Amendments that allow for changes proposed by the Administrative Review Tribunal Bill 2000 will apply from the commencement of the relevant provisions of that Bill. [Subclause 2(2)]

1.37 Provisions having transitional effect will apply to ensure that:

·
anything done under the Excise Acts by the CEO of Customs in force before the commencement of this Act is taken, after the commencement of this Act, to have been done by the Commissioner in that capacity [Schedule 2, item 5] ;
·
officers of Customs for the purposes of the Excise Acts before the amendments continue to be officers after their commencement [Schedule 2, item 13; Schedule 4, item 5; Schedule 5 item 8; Schedule 6, item 5] ;
·
a form approved under the Excise Act before the commencement of this Act is taken to be an approved form under the terms of the new definition [Schedule 2, item 17] ;
·
any securities taken under section 16 of the Excise Act held by Customs on the Commonwealths behalf immediately before the commencement of this Act, are taken, after its commencement, to be held by the CEO on behalf of the Commonwealth [Schedule 2, item 22] ;
·
an application for a review of a decision under the Excise Acts made before the commencement of the amendments will not be affected by the proposed requirement for objections to be dealt with in accordance with Part IVC of the TAA 1953 [Schedule 2, item 113; Schedule 4, item 52; Schedule 5, item 25; Schedule 6, item 21] ; and
·
under the Customs Act, where matters are already the subject of action under Part XII , the amendments transferring search and seizure powers to the Excise Act will not apply [Schedule 3, item 90] .

Consequential amendments

Table 1.8: Customs Act amendments
Delete reference to or Excise. Schedule 3, item 91
Replace CEO with Commissioner. Schedule 3, item 94
Replace Customs control with the Commissioners control. Schedule 3, items 12 and 16
Correct the reference to paragraph 30(1)(d). Schedule 3, item 15
Table 1.9: Customs Administration Act amendments
Repeal and replace definition of law of customs or excise. Schedule 7, item 1
Delete or excise. Schedule 7, items 2, 3 and 5 to 8
Redefine Officer of Customs to delete reference to Excise Act. Schedule 7, item 4

Taxation Administration Act amendments

1.38 The TAA 1953 will be amended to exclude the provisions of Part III and Subdivision 284-B in Schedule 1 which relate, respectively, to the prosecution of offences and to administrative penalties, from applying to the excise legislation and the diesel fuel rebate provisions in the Customs Act. [Schedule 7, items 30, 31, 34 and 37]

1.39 An outdated reference to Comptroller-General will be changed to Chief Executive Officer. [Schedule 7, item 33]


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