The Government will implement two measures that will reduce compliance costs for businesses that are licensed excise manufacturers or importers of equivalent products.
Excisable products include fuel, alcohol (other than wine) and tobacco.
The Government will implement changes to:
- allow small businesses with deferred settlement permissions to settle their excise and excise-equivalent customs duties on a monthly cycle. The measure is targeted specifically to assist small business and, accordingly, eligibility will be linked to the Government’s Small Business Alignment Framework announced by the Treasurer and Minister for Small Business and Tourism on 13 November 2006; and
- reform the rules concerning eligibility for refunds, remissions and drawbacks of excise and excise-equivalent customs duty. The reform measure will allow all excise and excise-equivalent imported goods to be eligible for a refund of duty where they are returned to a place licensed for the good or destroyed with the prior approval of the relevant administering authority. To be eligible for the refund of duty, such goods must be sufficiently identifiable as the goods on which duty was paid.
These measures build on the Government’s track record of reducing red tape for small businesses’, Peter Dutton said.
Implementation of both measures will require changes to legislation and will have effect from the later of 1 January 2008 or the date of Royal Assent of the enabling legislation.
Further information on the measures is provided in the attachment.
CANBERRA
8 May 2007
ATTACHMENT
Monthly settlement of excise and excise-equivalent customs duties for small business
Excise duty (paid on locally manufactured goods) and excise-equivalent customs duty (paid on equivalent imported goods) may currently be settled on a periodic basis. In accordance with established government policy, this is normally on a weekly cycle with payment due by 4 pm on the Monday following the previous accounting week. This system operates under permissions for ‘delivery without entry’ granted by the Commissioner of Taxation under the Excise Act 1901 and the CEO of Customs under the Customs Act 1901.
The new arrangements will allow small businesses that meet the definitions and requirements of the Government’s Small Business Alignment Framework to settle their payments on a monthly basis rather than weekly. This will address the compliance burden for small business by reducing the number of payments from four per month to just one, allowing businesses to better manage their interactions with the ATO.
Settlement will be due on the 21st day of the month following the delivery without entry. The Government will examine the feasibility of moving these settlements onto the Business Activity Statement in order to further reduce the compliance burden faced by small business.
In addition to the small business arrangements, the Government will take the opportunity to codify the existing weekly settlement timeframe into the legislation. This will improve the transparency of these arrangements and provide greater certainty on one of the key conditions for all businesses that are eligible for periodic settlement permissions.
Enhancing and streamlining eligibility for refunds, remissions and drawbacks of excise and excise-equivalent customs duty
Following a public review of the issue in 2006, the Government has agreed to reform the rules affecting eligibility for refunds, remissions and drawbacks of excise and excise-equivalent customs duty.
The new rules will operate on the principle that, provided the product does not become available for consumption on the domestic market, it should be eligible for a return of duty.
The package of rule changes will act to align excise and customs legislation to establish a consistent approach across product classes, including fuel, alcohol (other than wine) and tobacco, so that taxpayers seeking a refund, remission or drawback of duty will be subject to the same eligibility conditions. The approach will remove inconsistencies and artificial restrictions currently applying to such goods when a return of duty is sought. It will also provide greater opportunities for manufacturers and importers to access a return of duty and reduce their taxation compliance costs.
The new measures will consist of the following:
- allowing licensed entities to be eligible for a refund of duty on any excisable or excise-equivalent imported goods where such goods are:
- returned to a place licensed for the good (under the applicable legislation); or,
- destroyed with the prior approval of the Chief Executive Officer (CEO) of the Australian Taxation Office or the CEO of the Australian Customs Service, as applicable;
on condition that such goods must be sufficiently identifiable as the goods on which duty was paid;
- the decision as to whether an officer is to be in attendance at the time of destruction will be at the discretion of the applicable agency;
- a remission of duty will continue to be available for excisable and excise-equivalent goods destroyed with the prior approval of the relevant CEO;
- excisable and excise-equivalent goods will continue to be eligible for a drawback of duty when they are exported;
- a refund or remission of duty will not be available in circumstances where an excisable or excise-equivalent good is lost, stolen, or otherwise unable to be returned to licensed premises for the good, or destroyed without approval of the relevant CEO;
- the eligible time period for a refund or drawback of duty on excisable goods will be extended to four years from the time that the excise was originally paid, consistent with GST rules and recent changes to Customs regulations;
- a minimum threshold of $100 will be applied for eligibility to all drawbacks of duty;
- the relevant CEO will be permitted to determine, at his or her discretion, the minimum amount of a claim for a refund or remission of duty before it can be processed; and
- the changes will apply with effect from the later of 1 January 2008 or the date of Royal Assent of the enabling legislation.