Finance Bill 2002: EXPLANATORY NOTE
CLAUSE 21: DRAWBACK OF EXCISE DUTY
SUMMARY
1. Clause 21 removes a requirement relating to claims for the drawback of excise duty and extends the general provisions relating to reviewable decisions. The changes will take effect on Royal Assent to the Finance Bill 2002.
DETAILS OF THE CLAUSE
2. Subsection (1) amends section 133 of the Customs and Excise Management Act 1979 relating to claims for the drawback of excise duty.
3. Subsection (2) inserts a new subsection (bc) into section 14(1) of the Finance Act 1994 extending the provisions relating to reviewable decisions.
4. Subsection (3) specifies the decisions to which the provisions of sub-section (2) apply.
BACKGROUND
5. There are many circumstances in which the excise duty that has been paid on alcoholic liquors, tobacco products or mineral oil may be drawn back. Section 133 of the Customs and Excise Management Act 1979 makes provision about claims for drawback.
6. The purpose of this clause is to further modernise the excise drawback procedures:
- first, it enables excise drawback claims to be examined as part of Custom's assurance activities removing the need to divert staff to one-off, resource intensive pre-verification examination. This is primarily a technical change that will enable Customs to verify claims after repayment has been made;
- second, it extends the right to a formal review to decisions made under drawback regulations. Customs will utilise the existing risk-based audit techniques used in other areas of fiscal assurance.
7. The current legislation provides that Customs must be satisfied, at the time of repayment, that excise duty has been paid on the excise goods subject to each and every claim. This deprives Customs of the ability to make prompt repayments that could be verified as part of normal assurance activity, particularly for those traders with a good compliance history.
8. Except in limited circumstances decisions relating to excise drawback are currently excluded from the normal review and appeal provisions that apply to most areas of the Custom's work. Even then, a claimant may only contest a decision to refuse repayment of drawback by Judicial Review. This change will mean that drawback claims, made under the Excise Goods (Drawback) Regulations 1995, will be treated in the same way as other areas of taxation.
9. The measure is introduced in the interests of fairness. It will provide the same access to the review and appeal procedures for business whose claims are refused, as is currently available for claimants who are assessed when their claims, after payment, are found to be wholly or partly incorrect.