Proposed changes to reliefs and drawback - Goods contained in a traveller’s personal luggage and excise duty on motor vehicles
1. Background
Articles 41 and 73 of the Customs and Excise (Jersey) Law 1999 allow the Minister for Treasury and Resources to provide, by Order, for the relief from and drawback of excise duties on certain categories of goods or goods used in specified circumstances.
Goods contained in a traveller’s personal luggage
Quantitative allowances
Article 3(1) of the Excise Duty (Relief and Drawback)(Jersey) Order 2000 allows, subject to certain conditions, relief from excise duty in respect of the following goods when they accompany, as part of his or her personal baggage, a person entering Jersey if that person has made a valid journey –
(a) one litre of spirits;
(b) 2 litres of wine; and
(c) 200 cigarettes or 250 g of other tobacco products.
On 20th December 2007 the Council of the European Union adopted Council Directive 2007/74/EC that, together with other changes concerning VAT, amend the quantitative limits for alcohol and tobacco that benefit from a relief of excise duty imported into Member States by persons travelling from third countries.
These changes to quantitative limits increase the wine allowance from 2 litres to 4 litres, bring in a specific allowance for beer of 16 litres and allow for a lower quantitative limit, (25% of the full allowance), for tobacco goods. The changes shall apply from 1st December 2008.
Whilst the Directive applies to all EU countries and does not apply to the Channel Islands the Customs and Immigration Service consider it appropriate that the quantitative allowances for duty free excise goods imported into the Island by travellers is generally consistent with allowances for goods imported into other jurisdictions from Jersey. This will allow clarity for the public and also to the shipping companies supplying duty free goods.
The United Kingdom authorities have only recently indicated the exact changes that are being considered to traveller’s allowances for the relief of VAT and excise duty.
The Guernsey authorities have advised the Service that it is their intention to change their quantitative limits to correspond with the EU Directive.
Monetary allowance
In the case of passengers travelling by air and sea other than private pleasure-flying or private pleasure-sea-navigation Council Regulation (EC) No 274/2008, adopted by the Council of the European Union on 17th March 2008, amends Council Regulation EEC 918/83 and exempts from customs duty (CCT) non -commercial imports of goods, other than excise goods, the total value of which does not exceed EUR 430 per person, (the ‘other goods’ allowance).
For private pleasure-flying or private pleasure-sea-navigation the amendment exempts from CCT non -commercial imports of goods, other than excise goods, the total value of which does not exceed EUR 300 per person.
The euro equivalent in national currency shall be fixed once a year but may be maintained if the change is lower than the original exemption or would result in a change less than 5%.
The rates applicable shall be those obtained on the first working day of October as published in the Official Journal of the European Union and shall apply from the 1st January of the following year.
The value of EUR 300 and EUR 430 is currently set by the EU at £210 and £300 respectively and this relief shall also apply from 1st December 2008.
However from 1st January 2009 the value of EUR 300 and EUR 430 is set by the EU at £240 and £340 respectively.
As this regulation is directly applicable to the Channel Islands no new specific local legislation or changes to existing local legislation is required
GST allowance
The Goods and Services Tax (Jersey) Law 2007 makes it the responsibility of the Comptroller of Income Tax to administer Goods and Services Tax (GST).The Agent of the Impôts is responsible for the administration of GST on the importation of goods under the Customs and Excise (Jersey) Law 1999.
Article 56(2) of the GST Law allows the Comptroller, by Direction, to make provision for enabling or requiring the remission or refund of GST, or the giving of relief from GST.
Paragraph 12 of Direction 2008/18 allows a quantitative relief of GST on alcohol and tobacco goods imported by travellers that correspond to relief granted under the Excise Duty (Relief and Drawback)(Jersey) Order 2000 and a monetary ‘other goods’ relief that corresponds to the ECU175, (equivalent to £145), relief from customs duty (CCT) as previously set out in EU Council Regulation EEC 918/83.
The Customs and Immigration Service consider it appropriate that the quantitative and monetary allowance for GST free goods imported into the Island by travellers is consistent with the prevailing rate of relief from excise duty and CCT. This again will allow clarity for the public.
Excise duty on motor vehicles
Articles 7 and 8(3) of the Excise Duty (Relief and Drawback) (Jersey) Order 2000 allow relief and drawback of excise duty on motor vehicles.
The Minister will recall that Vehicle Registration Duty, the only excise duty applicable to motor vehicles, was abolished in May 2008, therefore all articles in the 2000 Order referring to VRD are no longer required.
The Customs and Immigration Service consider it appropriate to remove these Articles from the 2000 Order.
2. Recommendation
Goods contained in a traveller’s personal luggage
In order for the Island to remain in step with other jurisdictions and to avoid any misunderstanding by travellers the Service recommends to the Minister that –
· Article 3(1) of the Excise Duty (Relief and Drawback)(Jersey) Order 2000 is amended to show the following quantitative allowances –
(a) one litre of spirits;
(b) 4 litres of wine;
(c) 16 litres of beer or cider; and
(d) 200 cigarettes or 250 g of other tobacco products
Paragraph 12 of GST Direction 2008/18 is amended by The Comptroller of Income Tax to show the following quantitative allowances –
(a) one litre of spirits;
(b) 4 litres of wine;
(c) 16 litres of beer or cider; and
(d) 200 cigarettes or 250 g of other tobacco products
Paragraph 12 of GST Direction 2008/18 is amended by the Comptroller of Income Tax to increase the monetary ‘other goods’ allowance from £145 to £340 for goods imported by travellers on commercial transport and from £145 to £240 for goods imported by travellers on private aircraft and vessels.
Excise duty on motor vehicles
As there is currently no excise duty on motor vehicles the Service recommends to the Minister that –
· Article 1(1) of the Excise Duty (Relief and Drawback)(Jersey) Order 2000 the interpretation of ‘hire vehicle’ and ‘registered’ are removed
Article 7 of the Excise Duty (Relief and Drawback)(Jersey) Order 2000, ‘relief on motor vehicles’, is removed.
Article 8 of the Excise Duty (Relief and Drawback)(Jersey) Order 2000, ‘drawback’, is amended to remove all reference to motor vehicles.
Date of commencement
Although for a short period the monetary ‘other goods’ allowance for GST will be out of step with the monetary ‘other goods’ allowance for CCT, for simplicity it is recommended that all the above changes come into effect on 1st December 2008.
De-minimis waiver
The Minister will recall that, where considered appropriate, the Service is allowed to waive any duty or tax of £12 or less, the proposed changes in travellers allowances will not alter the application of this ‘de-minimis’ waiver.
3. Resource Implications
Other than minor costs associated with replacement signage at the ports and a potential very small loss in revenue due to increased personal allowances there are no further financial or manpower implication associated with these changes.
David A J Nurse
Director, Legal Status and Revenue
Customs and Immigration Service
22nd October 2008
gov.je