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FEEDBACK NEEDED - Customs & Excise Act 1996 Review
The Government is undertaking a wholesale review of the Customs &Excise Act 1996 - an important 20 year improvement to the system. This is to be an operational review to make compliance and collection run more smoothly. It will not cover excise rates.
A consultation document has been released for public consultation. The discussion paper is on the Customs website and also in the members' area of the Guild website. Submissions close on 1 May 2015.
There is an excise working group (alcohol) meeting on Thursday 16 April which a representative from the Guild Exec will attend and we want to be able to represent your views.
The object of the Custom & Excise Act review is to:
Improve facilitation of travel and trade through the border and supports more effective Customs' border management
Have the flexibility to enable new developments associated with changes in business practices, technology or government policy
Achieves better alignment with other government agencies
From a brewing industry perspective we have identified 3 key areas that need to be addressed in the review. These reflect current brewing practices and the way that businesses operate in the 21st century. The below ensure that the Act, regulations and operational procedures, operate in a cohesive manner and in line with the intent of the Act (ie. that excise is a tax on consumption and not on manufacture).
Liability for Excise: Liability for excise is intended to arise at the point of entry for home consumption. However, rules relating to remissions mean that in practice liability for excise arises upon partial or complete fermentation for beer.
We propose that the liability for excise only arises upon entry for home consumption (ie. when goods have left the licenced Customs Controlled Area"CCA"). This would lead to a significant reduction in complexity and administration for brewers, as would remove the need to seek remissions for excisable product that has not left the CCA.
Licensing: Currently Licenced Areas are restricted to manufacturing, export, and temporary offsite storage permits (wine only). Movements between licenced CCA's are restricted to a narrow set of circumstances and subject to formal approval. We propose that there should be the ability to licence storage and distribution warehouses to reflect brewing and commercial operations (parity with wine). Movements between licenced CCA's should not be subject to duty.
There should be the ability to licence import warehouses as a CCA. Reduced complexity and administration as systems and processes are aligned. This would lead to a reduction in excise duty "leakage" (eg. where duty is currently paid on stock transferred to an unlicenced warehouse and no remission is available/granted on stock that is not sold to consumers and is disposed of within the licenced CCA). It would also reduce complexity and administration as systems and processes are aligned.
Remissions and Refunds: Currently the process is not automatic. A brewery must submit a formal request for remission. There is an onerous application of the rules as New Zealand Customs will exhaust all possible options before granting a remission and approvals for refunds and remissions are restricted to a narrow set of circumstances, and in some cases not aligned.
We propose the rules and regulations operate in a manner that is consistent with the liability for excise arising at the point of entry into home consumption, ie. when product leaves the licenced CCAnot at the point of manufacture. The remission/refund circumstances should be broadened to include circumstances where goods have "no commercial value" and are disposed of (eg. excess production, aged stock, trial product etc).
There should be clarity, consistency and alignment between the refund and remission rules and regulations. This would mean that there is significant reduction in the complexity and administration as refund/remission rules are clear and aligned. It would also lead to a reduction in excise duty "leakage" (eg. where duty is currently paid on stock transferred to an unlicenced warehouse and no remission is available/granted on stock that is not sold to consumers and is disposed of within the licenced CCA).