House of Representatives

Explanatory Memorandum

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

Chapter 2 - Consequential amendments

Outline of chapter

2.1 This chapter explains the consequential amendments to the PGBAA, the Excise Act 1901 and the Fuel Quality Standards Act 2000 made by Schedules 1 and 2 to the Energy Grants (Cleaner Fuels) Scheme (Consequential Amendments) Bill 2003.

2.2 The amendments make changes to the PGBAA to accommodate the requirement that claimants for a cleaner fuel grant register and claim under the existing provisions of that Act. Some additional amendments to the PGBAA and the amendments to the Excise Act 1901 and the Fuel Quality Standards Act 2000 make provision for information gathering and information sharing. These measures will ensure the protection of the revenue and appropriate compliance with the scheme.

The amendment of the Product Grants and Benefits Administration Act 2000

Detailed explanation of new law

Registration of grants and benefits

2.3 The specific requirement for registration for a cleaner fuel grant is that the claimant is a licensed manufacturer under the Excise Act 1901, holds a storage licence under the Excise Act 1901 for goods of a kind including a cleaner fuel, imports or proposes to import cleaner fuel into Australia or is an entity who has been granted a permission under section 61C of the Excise Act 1901 or section 69A of the Customs Act 1901 for goods of a kind including a cleaner fuel. [Schedule 1, item 3]

Payment of grants and benefits

2.4 The amount of any grant claimed for the importation or manufacture of a cleaner fuel must take into account any reduction in the effective excise paid on the fuel due to the receipt of a drawback, refund, rebate or remission of duty. Claimants are required to notify the Commissioner of any such payment. A refusal or failure to notify the Commissioner is an offence under section 8C of the Taxation Administration Act 1953. [Schedule 1, items 4 to 9]

Record keeping

2.5 An entity who claims a cleaner fuel grant must notify the Commissioner of any disqualifying circumstances. Failure to notify the Commissioner of any disqualifying circumstances for cleaner fuel is an offence under paragraph 8C(1)(d) of the Taxation Administration Act 1953. [Schedule 1, item 10]

Information gathering powers

2.6 An entity who has made a claim for entitlement to a grant may be required by the Commissioner to demonstrate the method and operation of any record keeping or accounting system operated by and on behalf of the claimant, and used to arrive at particulars or estimates included in the claim. An entity may also be required to demonstrate the method and operation of any manufacturing process. [Schedule 1, items 11 and 12]

Protection of confidentiality of information

2.7 It is not an offence for the Commissioner, a Deputy Commissioner or an entity authorised by them, to disclose information relating to cleaner fuel grants to the Secretary to the Department of the Environment and Heritage. [Schedule 1, items 13 and 14]

The amendments to the Excise Act 1901

Detailed explanation of new law

Administration

2.8 Applicants for an excise licence in respect of goods that were previously free from excise duty are allowed a minimum period of two months from the day on which the excise tariff or excise tariff alteration is proposed in the Parliament to comply with the provisions of the Excise Act 1901 relating to licences. If, in that two month period, an entity has applied for a licence in respect of the manufacture of the goods, and the Collector has not decided whether to grant or refuse to grant the licence, a further period may apply to allow the person to continue to manufacture the goods until the Collector grants, or refuses to grant a licence. This additional period may not exceed 12 months. The Collector may issue a general determination setting a transition period of between two and 12 months. [Schedule 2, items 1 to 3]

Conditions and duration of licences

2.9 The Collector may amend licences on the initiative of the Collector. The amendment of a licence may include varying or revoking a condition of the licence or imposing an additional condition for the licence. Where the Collector initiates the amendment of a licence a written notice must be given to the licence holder and the Collector must be satisfied that the amendment is necessary to protect the revenue or ensure compliance with the Excise Act 1901.

2.10 The types of conditions that may be imposed on a licence include maintenance of certain records, maintenance of certain security measures and practices, accountability and identification measures regarding goods, and quantity limitations on the level of access to product on which excise has not been paid in accordance with demonstrated legitimate business requirements.

2.11 Where the Collector has given notification that an amendment has been made to a licence the notice must advise that it may be an offence for a licence holder to contravene the licence condition.

2.12 A decision by the Collector to amend a licence is subject to review under Part IVC of the Taxation Administration Act 1953. [Schedule 2, item 5]

2.13 The existing subsection 39D(4) is amended to update the terminology in accordance with clause 39DA. [Schedule 2, item 4]

Protection of confidentiality of information

2.14 It is not an offence for the Commissioner or a Deputy Commissioner or an entity authorised by them to release information to an entity who is a licensed manufacturer, a holder of a storage licence under the Excise Act 1901 or a person specified in a permission given under section 61C of the Excise Act 1901 for goods of a kind including a cleaner fuel. The licence information must be in respect of determining the third party's entitlement to a grant under the Energy Grants (Cleaner Fuels) Scheme Bill 2003 and may include information concerning whether the third party holds a licence or permission under the Excise Act 1901 and the conditions of that licence or permission. [Schedule 2, items 6 to 9]

The amendment to the Fuel Quality Standards Act 2000

Detailed explanation of new law

2.15 The Secretary to the Department of the Environment and Heritage may disclose information collected under the Fuel Quality Standards Act 2000 to the Commissioner for use in relation to cleaner fuel scheme grants. An example of the kind of information that may be collected by the Department of the Environment and Heritage and disclosed to the Commissioner is any information collected under the Fuels Quality Standards Act 2000 that has indicated non-compliance with a determined fuel standard. [Schedule 2, item 10]