Explanatory Memorandum
(Circulated by authority of the Minister for Industry, Tourism and Resources, the Hon Ian Macfarlane MP)General outline and financial impact statement
General Outline
The purpose of the ACIS Administration Amendment (Unearned Credit Liability) Bill 2007 ('the Bill') is to confirm the circumstances under which the Commonwealth can issue an Unearned Credit liability (UCL) to include circumstances where the registered ACIS participant has received credits to which it is not entitled.
The ACIS Administration Act 1999 (the ACIS Act) establishes the Automotive Competitiveness and Investment Scheme (ACIS). ACIS delivers assistance to eligible recipients in the automotive industry by way of duty credits on a quarterly basis. Claims are lodged by ACIS participants and these are paid through AusIndustry upon receipt of those claims, with a subsequent rigorous audit process employed to verify their validity. This arrangement was put in place at the request of the automotive industry to ensure the timely delivery of assistance to industry members.
From time to time the audit process identifies credits that have been issued in respect of items which were claimed but which were found to be ineligible. The only Commonwealth power to recover credits issued to participants is the issue of a UCL. The mechanism for recovering credits issued to a participant that the audit process reveals is not entitled to those credits has been called into question by a recent decision of the Administrative Appeals Tribunal (AAT).
The AAT held that the Commonwealth does not have the power to raise a UCL where a participant is not entitled to the credits under the ACIS Act unless the credits were issued due to an error in calculation, information was incomplete or if the credit was earned in a transaction that was deemed not at arms length.
The amendments proposed in this Bill are intended to confirm the circumstances in which a UCL may be issued to include recovery of credits issued to participants that were not entitled to receive them.
Financial Impact Statement
The Bill will have no financial impact.
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