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2002
CUSTOMS TARIFF AMENDMENT BILL (NO. 2)
2002
(Circulated
by authority of the
Minister for Justice and Customs,
Senator
the Honourable Christopher Martin Ellison)
CUSTOMS TARIFF AMENDMENT BILL (NO. 2) 2002
The purpose of this Bill is to amend the Customs Tariff Act 1995
(the Customs Tariff) to:
• implement the Government’s
decision to exempt certain goods from the Product Stewardship Oil
levy;
• amend customs rates of duty for certain beer to give effect
to the Government’s decision to introduce a national scheme for low
alcohol beer;
• amend section 19 of the Customs Tariff as a
consequence of the removal of indexation provisions for those goods subject to
the Product Stewardship Oil levy; and
• implement other minor
related amendments to the Customs Tariff.
The Excise Tariff Amendment
Bill (No. 1) 2002 makes equivalent changes to the Excise Tariff Act
1921.
FINANCIAL IMPACT SATEMENT
The cost to
the Government of exempting certain oils from paying the Product Stewardship Oil
levy collected under the Customs Tariff is considered to be
negligible.
The financial impact of the Government’s decision to
introduce a national excise scheme for low alcohol beer which introduced new
rates of customs and excise duty on certain low alcohol beer is that the
Commonwealth Government will fund the shortfall between the cost of the scheme
and the State and Territory financial contributions. This cost is estimated to
be $5.1 million in 2002-3 with the Government meeting the full cost of the
scheme from 2007-8, approximately $70 million per annum on current
estimates.
The net cost to revenue of the abolition of oil products
indexation on imported goods is considered to be negligible.
The
remaining amendments in this Bill are of an administrative nature and have no
financial impact.
CUSTOMS TARIFF AMENDMENT BILL (NO. 2)
2002
Clause 1 - Short Title - Customs Tariff Amendment Act (No. 2)
2002.
Clause 2 - Commencement
Item 1 of the table in this
clause specifies that sections 1 to 3 and anything in the Act not covered
elsewhere in the table will commence on the day on which the Act receives the
Royal Assent.
Items 2 to 4 of the table in this clause specify the date
and time of commencement of each of the three Parts contained in the Schedule to
the Bill.
Part 1 - is taken to have commenced on 15 April
2002.
Part 2 - is taken to have commenced on 1 July 2002.
Part
3 - commences immediately after the commencement of
Part 4 of Schedule 1 to
the Excise Tariff Amendment
Act (No. 1) 2002. That Part will
commence on the day on which that Act receives the Royal Assent.
Clause 3
- Schedule(s)
This clause is the formal enabling provision for the
Schedule to the Bill, providing that each Act specified in the Schedule is
amended in accordance with the applicable items of that Schedule. The clause
also provides that other items of the Schedules have effect according to their
own terms.
SUMMARY OF AMENDMENTS
Part 1 of Schedule 1 provides the mechanism to exempt certain oils from
the Product Stewardship Oil (PSO) levy imposed by the Customs Tariff Act 1995
(the Customs Tariff).
The Excise Tariff Amendment Bill (No. 1) 2002
contains equivalent amendments to exempt the same domestically produced goods
from the PSO levy imposed by the Excise Tariff Act 1921 (the Excise
Tariff).
The Product Stewardship (Oil) Act 2000, the Customs
Tariff Amendment (Product Stewardship for Waste Oil) Act 2000 and the
Excise Tariff Amendment (Product Stewardship for Waste Oil) Act 2000
implemented the product stewardship arrangements in respect of oil. The Customs
Tariff and the Excise Tariff impose a levy on certain petroleum based oils and
greases and their synthetic equivalents to fund the development of a recycling
program for waste oil.
The intention of these product stewardship
arrangements is to reduce the environmental impact of waste oil by imposing a
levy on virgin oils and lubricants. The levy is used to fund a benefit scheme
designed to encourage the recycling of waste oils.
The Government has
decided that, where feasible, oils that are used in the manufacture of another
product, are not contributing to the waste oil problem and are clearly
distinguishable from oils that do should be excluded from the levy.
In
particular, it has been decided to exempt certain food grade white mineral oils,
certain aromatic process oils and certain polyglycol brake fluids from the levy.
For the purposes of the Customs Tariff, detailed descriptions of these goods are
prescribed in departmental by-laws. They are identical to the descriptions
contained at item 5 of
Part 2 of the Excise Tariff Amendment Bill (No. 1)
2002.
The amendments relating to exemptions from the PSO levy were given
effect by the publication of Customs Tariff Notice No. 1 (2002) in the
Commonwealth of Australia Gazette S109 of 12 April 2002. The amendments were
tabled in the House of Representatives in Customs Tariff Proposal No. 1 (2002)
on 29 May 2002 and took effect from 15 April 2002.
This item removes the reference to item 50B of Schedule 4 of the Customs
Tariff and substitutes a reference to paragraph 50(1)(b) in the table in
subsection 19(1) of the Customs Tariff, as a consequence of the amendments being
made by items 4 and 5 below. Item 50B will be repealed and new paragraph
50(1)(b) which covers the same goods will be inserted in item 50 of Schedule
4.
Section 6A of the Excise Tariff automatically indexes excise rates of duty
twice yearly in line with movements in the Consumer Price Index (CPI). Section
19 of the Customs Tariff allows the same indexation to be made to customs rates
of duty for equivalent imported goods. For this purpose, section 19 contains a
table that lists paired customs tariff subheadings or items and the
corresponding excise tariff items.
The amendment to the section 19 table
reflects the amendments in items 4 and 5 below.
These items amend the table in item 44 in Schedule 4 to the Customs
Tariff by deleting the reference to item 50B in Schedule 4 to the Customs Tariff
and item 15(A) in the Schedule to the Excise Tariff.
Item 44 grants
concessional entry to particular imported goods that are for use in the
manufacture of excisable goods in terms of section 24 of the Excise Act
1901. The reference to item 50B and its corresponding excise item 15(A) are
no longer required in this Table.
This amendment restructures item 50 of Schedule 4 to accommodate the
different concessional duty rates that apply to goods classified under heading
3819.00.00 (hydraulic transmission fluids) that are covered by a Tariff
Concession Order (TCO), and other goods covered by a TCO. A TCO enables a
person to import goods at a concessional rate of duty where those goods are not
produced in Australia. Provision has been made within the restructured item 50
to cater for any hydraulic transmission fluids that are exempted from the PSO
levy and also are subject to a TCO (new paragraph 50(1)(a)).
This amendment repeals item 50B from Schedule 4 to the Customs Tariff.
Item 50B catered for hydraulic transmission fluids classified in heading
3819.00.00 of the Customs Tariff and subject to a TCO. These goods have been
accommodated in the restructured item 50 at paragraph 50(1)(b).
This item inserts new items 72A and 72B into Schedule 4 to the Customs
Tariff to exempt certain goods from the PSO levy.
Item 72A provides the
mechanism to exempt certain goods including food grade white mineral oils and
aromatic process oils, classified under headings 2710, 3403 or 3811, from paying
the PSO levy.
Item 72B provides the mechanism to exempt certain
polyglycol brake fluids, classified under heading 3819.00.00, from paying the
PSO levy.
Items 72A and 72B provide the Customs rate of duty of free and 5%,
respectively, for those goods exempted from the levy.
Part 2
– Amendments having effect on and from 1 July 2002
The amendments in Part 2 of Schedule 1 impose new customs rates of duty for
certain low alcohol beer.
The amendments were tabled in the House of
Representatives in Customs Tariff Proposal No. 2 (2002) on 26 June 2002 and took
effect from 1 July 2002.
These amendments are equivalent to amendments
contained in the Excise Tariff Amendment Bill (No. 1) 2002 and ensure that the
same duty rates apply for imported beer as for locally produced beer.
The
new rates of duty give effect to the Government’s decision to implement a
national excise scheme for low alcohol beer, announced by the Treasurer on 22
March 2002, following the Ministerial Council for Commonwealth-State Financial
Relations and Outcome of Loan Council Meeting. The key feature of this scheme
is the cessation of State subsidies for low alcohol beer, with assistance to be
delivered through lower excise rates.
Item 7
Item 7 reduces
the rate of customs duty for low alcohol beer with less than 3 per cent alcohol
by volume packaged in individual containers not exceeding 48 litres from $45.46
to $28.49 per litre of alcohol.
Item 8
Item 8 reduces the
rate of customs duty for mid-strength beer with more than 3.0 per cent but less
than 3.5 per cent alcohol by volume packaged in individual containers not
exceeding 48 litres from $38.59 to $33.22 per litre of alcohol.
This
amendment is equivalent to an amendment contained in the Excise Tariff Amendment
Bill (No. 1) 2002 that addresses an anomaly in excise rates of duty for beer.
This anomaly has allowed domestic manufacturers of beer to reduce their excise
liability by marginally increasing the alcohol content of beer from 3.5 per cent
to 3.6 per cent.
Item 9
Item 9 reduces the rate of
customs duty for beer packaged in individual containers exceeding 48 litres from
$16.46 to $5.69 per litre of alcohol for low alcohol beer with less than 3 per
cent alcohol by volume.
For each of the above items in Part 2, the excise
and customs rates of duty are calculated on that alcohol content over 1.15
per cent. All other duty rates for beer are unchanged.
Part 3 –
Amendments having effect immediately after the commencement of
Part 4 of Schedule 1 to the Excise Tariff Amendment Act (No.
1) 2002
Part 3 of Customs Tariff Amendment Bill (No. 2) 2002
amends section 19 of the Customs Tariff to reflect amendments to the indexation
provisions in the Excise Tariff.
Section 6A of the Excise Tariff
provides for the automatic indexation, in February and August of each year,
of certain excise rates of duty in line with movements in the Consumer Price
Index. The goods to which automatic indexation applies are certain alcohol and
tobacco products and certain petroleum products and their synthetic equivalents
that are subject to the PSO levy.
The Excise Tariff Amendment Bill (No.
1) 2002 amends section 6A of the Excise Tariff to exclude those petroleum
products and their synthetic equivalents subject to the PSO levy from the
automatic indexation provisions. These goods are classified in
item 15 of
the Schedule to the Excise Tariff.
Section 19 of the Customs Tariff
provides for the same indexation to be made to customs rates of duty for
equivalent imported goods. For this purpose, section 19 contains a table that
lists paired customs tariff subheadings or items and the corresponding excise
tariff items. Part 3 of Customs Tariff Amendment Bill (No. 2) 2002
amends section 19 and its table so that it reflects those goods subject
to automatic indexation under the Excise Act.
Item
10
This item amends the text of subsection 19(1) by removing the
reference to “the item in Schedule 4”. This refers to paragraph
50(1)(b) that applies to hydraulic transmission fluids classified under heading
3819.00.00 of the Customs Tariff and covered by a TCO. As paragraph 50(1)(b) is
being removed from the table and there are no other Schedule 4 items in the
table, there is no need to make reference to it in the text of subsection
19(1).
Item 11
This item repeals the table to subsection
19(1) and replaces it with a revised table that omits the paired customs
subheadings (and paragraph 50(1)(b)) and the corresponding excise tariff items
(15(A) or 15(C)) that apply to those goods
that are subject to the PSO levy.