House of Representatives

Taxation Laws Amendment (Excise Arrangements) Bill 2000

Explanatory Memorandum

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

Chapter 2 - Administration of the Diesel Fuel Rebate Scheme

Outline of chapter

2.1 This chapter explains the amendments necessary to give effect to the transfer of the administration of the DFRS from the CEO of Customs to the Commissioner.

Summary of the amendments

2.2 The Customs Act and the Excise Act provide a joint legislative basis for the DFRS. By amendments proposed by this Bill, the Commissioner will have the general administration of the Excise Act and of the DFRS provisions contained therein. Amendments to the Customs Act will also be made to ensure that the Commissioner has administration of the DFRS provisions in that Act.

2.3 The main changes are:

·
the insertion in the Customs Act of terms and definitions relating to the Commissioners administration of the DFRS;
·
the application of Excise Act provisions to the prosecution of all DFRS offences; and
·
the application of TAA 1953 provisions to the review of DFRS decisions.

2.4 The amendments will not affect the entitlements and obligations of persons eligible for a DFRS rebate.

Detailed explanation of the amendments

Background

2.5 The DFRS provides a rebate for the excise duty or customs duty which has been paid on locally produced or imported diesel and like fuel purchased for use in certain eligible activities. These include specific off-road uses in mining, primary production, marine use and rail transport, at a hospital, nursing home, aged persons home, and for certain residential power generation.

2.6 Both the Customs Act and the Excise Act provide the legislative basis for the operation of the DFRS. They cover the usages of the fuel that attract entitlement to a rebate, matters relating to applications for a rebate and the assessment of rebate entitlements. Both Acts provide the necessary authority to pay and audit claims, to prosecute offences and to confer powers needed to administer the DFRS.

2.7 At present, ATO officers administer the DFRS under delegation from the CEO of Customs. These amendments will give the Commissioner the legislative authority to administer the DFRS.

Amendment of the Excise Act

Changes to defined terms

2.8 A defined term diesel fuel rebate Customs provisions will be inserted to refer to the sections of the Customs Act that are relevant to the DFRS. [Schedule 2, item 9, definition of diesel fuel rebate Customs provisions in subsection 4(1)]

2.9 The term diesel fuel rebate is presently defined for Excise Act purposes as a rebate payable under section 78A. That definition will not apply to proposed paragraph 120(1)(vd) which refers to the rebate payable under section 164 of the Customs Act. [Schedule 2, item 8]

2.10 The defined term authorised officer will replace the term Customs in relation to the conduct of audits under the Excise provisions. [Schedule 2, item 65]

References to DFRS offences under the Customs Act

2.11 As the prosecution of all DFRS offences will be dealt with under the provisions of the Excise Act, the definition of Excise prosecutions will be replaced with a new definition to include proceedings for the recovery of pecuniary penalties under the Customs Act for contraventions relating to diesel fuel rebate Customs provisions. [Schedule 2, item 99, section 133]

2.12 A paragraph will be inserted in the Excise offence provisions to include the knowingly or recklessly obtaining or retaining of a diesel fuel rebate to which a person is not entitled under section 164 of the Customs Act. This enables the offence to be prosecuted as an Excise prosecution and corresponds to the offence under the Excise Act when a person knowingly or recklessly obtains or retains diesel fuel rebate to which the person is not entitled under section 78A of the Excise Act. [Schedule 2, item 89, paragraph 120(1)(vd)]

2.13 A reference to this DFRS offence will be inserted in section 78AD of the Excise Act. This section deals with the audit of diesel fuel rebate applications and excludes certain records from being used in evidence against the person in proceedings for an offence, except in certain circumstances. The circumstances where records are admissible in proceedings will include the offence when a person knowingly or recklessly obtains a rebate to which he is not entitled under section 164 of the Customs Act. This is consistent with the admissibility of records in proceedings for the corresponding offence under section 78A of the Excise Act. [Schedule 2, item 64]

2.14 The corresponding section in the Customs Act, section 164AC, will be amended to reflect the relocation of this DFRS offence provision. [Schedule 3, item 61]

Review of DFRS decisions

2.15 This Bill will amend the Excise Act to enable a person to object against a diesel fuel rebate assessment in the manner that applies to taxation laws generally as set out in Part IVC of the TAA 1953. Under this Part, the objection is reviewed by the Commissioner before the matter is referred to the AAT or a court.

2.16 References to review by the AAT will be replaced with references to review under Part IVC . [Schedule 2, items 66 to 68, 70 and 77]

2.17 A reference to the AAT will be replaced with one to the ART on commencement of provisions proposed by the Administrative Review Tribunal Bill 2000. [Subclause 2(2); Schedule 2, item 69]

Amendment of the Customs Act

General administration of the DFRS provisions

2.18 The general administration provision will be redrafted to ensure that the Commissioner has the general administration of the diesel fuel rebate provisions. [Schedule 3, item 10, section 7]

Changes to defined terms

2.19 The term Commissioner , as used in the DFRS provisions, will be defined to mean the Commissioner of Taxation. [Schedule 3, item 4, definition of Commissioner in subsection 4(1)]

2.20 A defined term diesel fuel rebate provision will be inserted to mean any of the particular sections in the Customs Act that relate to the DFRS. [Schedule 2, item 5, definition of diesel fuel rebate provisions in subsection 4(1)]

2.21 As officers performing functions in relation to the DFRS provisions in the Customs Act will be taxation officers rather than officers of Customs, existing references to officers in the DFRS provisions will be amended to reflect the change. These amendments and other changes to terms used in the Customs Act are set out in Table 2.1.

2.22 The definition of approved form will be amended so that its meaning in relation to the DFRS provisions will be the same as that in the Excise Act, that is, an approved form in relation to a DFRS application will have the meaning given by section 388-50 in Schedule 1 of the TAA 1953. [Schedule 3, item 8, subsection 4A(1AA)]

2.23 Any form that was approved under section 4A of the Customs Act and was used in connection with the diesel fuel rebate, is taken to be a form approved in the terms of section 388-50 in Schedule 1 of the TAA 1953. [Schedule 3, item 9]

Prosecution of DFRS offences

2.24 Offences against the diesel fuel rebate provisions will be prosecuted under the Excise Act provisions. The offence provisions in the Customs Act will be amended to exclude the offence of obtaining a diesel fuel rebate to which a person is not entitled under section 164 under the Customs Act. [Schedule 3, item 93]

2.25 The defined term Customs prosecutions will also be redrafted to exclude proceedings for the recovery of pecuniary penalties for contravention of the diesel fuel rebate provisions. [Schedule 3, item 95, section 244]

2.26 The revised definition of Customs prosecution will not apply to any Customs prosecution instituted before the commencement of this Act. [Schedule 3, item 96]

2.27 A definition of offence in section 183UA will be amended to exclude offences relating to the diesel fuel rebate. [Schedule 3, item 89]

Review of DFRS decisions

2.28 A person dissatisfied with a decision made under a diesel fuel rebate provision will be able to object against it in the manner that applies to taxation laws generally as set out in Part IVC of the TAA 1953. The appeal provisions of the Customs Act will be amended to enable objections to be made against a DFRS decision in the manner specified in Part IVC of the TAA 1953. [Schedule 3, items 99 and 101, section 273JB]

2.29 References to the appeal provisions in the DFRS provisions in the Customs Act will be amended as a consequence. [Schedule 3, items 81, 82 and 84]

2.30 The amendments to the appeal provisions do not affect the consideration of any application for review of a decision made under section 273GA of the Customs Act before the commencement of this Act. [Schedule 3, items 100 and 102]

2.31 References to the AAT will be replaced with references to the ART on commencement of provisions proposed by the Administrative Review Tribunal Bill 2000. [Subclause 2(2); Schedule 3, items 83 and 103]

Table 2.1: Changes to terms used in the Customs Act
Amend the definition of authorised officer to exclude functions relating to DFRS provisions. Schedule 3, item 1
Insert definition of authorised taxation officer. Schedule 3, item 2
Amend the definition of by authority to include a reference to a taxation officer doing duty in relation to DFRS matters. Schedule 3, item 3
Exclude the DFRS provisions from the definition of an officer of Customs. Schedule 3, item 6
Insert definition of taxation officer. Schedule 3, item 7
Modify the delegation power so that the Minister may delegate to an excise officer certain functions or powers under the diesel fuel rebate provisions. Schedule 3, item 11, subsection 9(1A)
Replace an officer with a taxation officer in provisions relating to DFRS. Schedule 3, items 18, 33, 37, 41, 64 and 67
Replace CEO with Commissioner. Schedule 3, items 19, 21 to 24, 27, 28, 31, 32, 34 to 36, 38 to 40, 42 to 44, 58, 62, 63, 65, 66, 68 to 70, 72 to 76, 78 to 80 and 94
Replace authorised officer with authorised taxation officer. Schedule 3, items 20, 45 to 54, 56, 57, 59 and 60
Replace Collector with the Commissioner. Schedule 3, items 25, 26, 29, 97 and 98
Replace CEO, to the Regional Director for a State or Territory or to an officer with Commissioner or to a taxation officer. Schedule 3, item 30
Replace authorised person with authorised taxation officer. Schedule 3, item 55
Replace Customs with authorised taxation officer. Schedule 3, item 71

Amendment of the TAA 1953

2.32 As the diesel fuel rebate provisions in the Customs Act will be administered by the Commissioner, they will come within the meaning of taxation law in the TAA 1953. The amendments will insert a reference to the Customs diesel fuel rebate provisions in the definition of taxation law. [Schedule 7, item 29, paragraph (bb), definition of taxation law in section 2]

2.33 The term Customs diesel fuel rebate provision will be defined as meaning any of the sections of the Customs Act relating to diesel fuel rebate or any regulation made under the Customs Act relating to these provisions. [Schedule 7, item 28, definition of Customs diesel fuel rebate provision in section 2]

2.34 Offences under the diesel fuel rebate provisions will be prosecuted under the provisions of the Excise Act. The TAA 1953 will be amended to exclude the operation of Part III (which relates to Prosecutions and Offences) from applying to the diesel fuel rebate provisions. [Schedule 7, items 31 and 32, subsection 2(2)]


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