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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS TARIFF AMENDMENT (INDIA-AUSTRALIA ECONOMIC COOPERATION
AND TRADE AGREEMENT IMPLEMENTATION) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Home, the Honourable Clare O'Neil MP)
CUSTOMS TARIFF AMENDMENT (INDIA-AUSTRALIA ECONOMIC
COOPERATION AND TRADE AGREEMENT IMPLEMENTATION) BILL 2022
OUTLINE
The purpose of the Customs Tariff Amendment (India-Australia Economic Cooperation and
Trade Agreement Implementation) Bill 2022 (the Bill) is to amend the Customs Tariff
Act 1995 (the Customs Tariff Act) to implement the India-Australia Economic Cooperation
and Trade Agreement (the Agreement). The Bill will:
• provide a 'Free' rate of customs duty for Indian originating goods not listed in
new Schedule 10A, with effect from entry into force of the Agreement;
• insert new Schedule 10A to:
i. specify the phasing rates of customs duty for certain Indian originating
goods that will incrementally reduce to 'Free' by the 5th calendar year after
the Agreement enters into force for Australia; and
ii. maintain rates of customs duty on certain alcohol, tobacco and petroleum
products equivalent to the rates of excise duty payable on these goods
when locally manufactured; and
• amend Schedule 4 to maintain customs duty rates for certain Indian originating
goods in accordance with the applicable concessional items.
The Customs Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Bill 2022 (the Customs Amendment Bill) will make complementary
amendments to the Customs Act 1901 (the Customs Act) to introduce rules of origin for
goods imported into Australia from India. These rules will determine whether goods are
Indian originating goods and therefore eligible for preferential tariff treatment in accordance
with the Agreement. These rules will be set out in new Division 1JA of Part VIII of the
Customs Act.
FINANCIAL IMPACT STATEMENT
It is estimated that the implementation of this agreement will reduce customs duty collections
by $335 million over the forward estimates.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human rights in respect of the amendments contained in
the Bill is at Attachment A. The Statement assesses the amendments to be compatible with
Australia's human rights obligations.
REGULATION IMPACT STATEMENT
A Regulation Impact Statement for the Agreement, covering the tariff amendments, is
contained in the Explanatory Memorandum for the Customs Amendment Bill.
Page 2 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Bill 2022
CUSTOMS TARIFF AMENDMENT (INDIA-AUSTRALIA ECONOMIC
COOPERATION AND TRADE AGREEMENT IMPLEMENTATION) BILL 2022
NOTES ON CLAUSES
Clause 1 Short title
1. This clause provides for the 'Customs Tariff Amendment (India-Australia Economic
Cooperation and Trade Agreement Implementation) Bill 2022' (the Bill), when enacted, to be
cited as the Customs Tariff Amendment (India-Australia Economic Cooperation and Trade
Agreement Implementation) Act 2022.
Clause 2 Commencement
2. This clause sets out, in a table, the date on which provisions of the Bill, when enacted, will
commence.
3. Table item 1 provides for clauses 1 to 3 and anything in the Bill not elsewhere covered by the
table to commence on the day the Bill receives the Royal Assent.
4. Table item 2 provides for Schedule 1 of the Bill to commence at the same time as Schedule 1
to the Customs Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Act 2022. The provisions do not commence at all if the Agreement does not
enter into force for Australia.
5. The Customs Amendment Bill also relevantly provides that the Minister must announce the
day on which the Agreement enters into force for Australia by notifiable instrument, in
accordance with the Legislation Act 2003.
Clause 3 Schedules
6. This clause enables the Schedules of the Bill, when enacted, to amend or repeal provisions of
legislation specified in that Schedule in accordance with the applicable items. The Customs
Tariff Act 1995 (the Customs Tariff Act) is being amended by the Bill.
Schedule 1-Amendments
Customs Tariff Act 1995
Introductory Comments
7. On 2 April 2022, the Hon Dan Tehan MP, former Minister for Trade, Tourism and
Investment, and his counterpart from the Republic of India (India) signed the India-Australia
Economic Cooperation and Trade Agreement (the Agreement).
8. The Agreement includes rules of origin to determine whether goods imported into Australia
are originating goods (referred to as 'Indian originating goods'). Such goods are subject to
preferential rates of customs duty under the amendments to the Customs Tariff Act proposed
by the Bill. These rules of origin are inserted by the Customs Amendment (India-Australia
Page 3 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Bill 2022
Economic Cooperation and Trade Agreement Implementation) Bill 2022 and are contained in
new Division 1JA of Part VIII of the Customs Act 1901 (the Customs Act).
9. India is currently listed as a Developing Country under Division 1 of Part 4 of Schedule 1 to
the Customs Tariff Regulations 2004. Goods imported from India are therefore subject to
Developing Countries (DCS) rates of duty. When implemented, the Bill will not affect the
existing preferential status for India. Rather, importers can still claim the DCS rates of duty
for Indian originating goods.
10. The Bill sets out customs duty rates for Indian originating goods in accordance with the
Agreement. For goods classified to the tariff subheadings listed in new Schedule 10A inserted
by the Bill, the customs duty rate would accord with Article 2.3 of Chapter 2 of the
Agreement. For goods classified to tariff subheadings not listed in new Schedule 10A,
a preferential customs duty rate of 'Free' will apply in accordance with Section 2A of
Annex 2A to Chapter 2 of the Agreement.
Item 1 Subsection 3(1) (after paragraph (h) of the definition of rate column)
11. This item amends the definition of 'rate column' in subsection 3(1) of the Customs Tariff Act
by inserting new paragraph (3)(1)(ha), which references the third column of the table in new
Schedule 10A.
12. New Schedule 10A will set out the rates of customs duty for Indian originating goods
classified to tariff subheadings listed in that Schedule.
Item 2 Subsection 9(1)
13. This item amends subsection 9(1) of the Customs Tariff Act to insert a reference to new
Schedule 10A.
14. This amendment allows ad valorem rates of custom duty that apply to Indian originating
goods to be specified in the "rate column" in new Schedule 10A of the Customs Tariff Act.
Items 3 After paragraph 11(1)(bf)
15. Section 11 of the Customs Tariff Act sets out the rules for determining when a phasing rate of
customs duty has effect. The amendments made by these items provide for phasing rates of
customs duty for Indian originating goods.
16. Item 3 inserts new paragraph 11(1)(bfa) into the Customs Tariff Act to include a reference to
a rate of customs duty set out in the third column of an item in the table in new Schedule 10A
of the Customs Tariff Act that applies to the goods.
Item 4 After paragraph 11(1)(j)
17. Item 4 inserts new paragraph 11(1)(ja) into the Customs Tariff Act to include a reference to
the third column of an item in the table in new Schedule 10A that applies to Indian
originating goods.
Page 4 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
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Item 5 After paragraph 11(2)(bf)
18. Item 5 inserts new paragraph 11(2)(bfa) into the Customs Tariff Act to include a reference to
a rate of customs duty set out in the third column of an item in the table in new Schedule 10A
of the Customs Tariff Act that applies to Indian originating goods.
Item 6 After section 13G
13GA When goods are Indian originating goods
19. This item inserts new section 13GA into the Customs Tariff Act, which sets out when goods
are Indian originating goods for the purposes of the Customs Tariff Act.
20. Goods are Indian originating goods if, and only if, they are Indian originating goods under
Division 1JA of Part VIII of the Customs Act. New Division 1JA, inserted by the Customs
Amendment (India-Australia Economic Cooperation and Trade Agreement Implementation)
Bill 2022, sets out the new rules of origin for determining whether goods are Indian
originating goods.
Item 7 After subparagraph 16(1)(a)(viii)
21. This item inserts new subparagraph 16(1)(a)(viiia) into the Customs Tariff Act.
22. Section 16 of the Customs Tariff Act sets out how duty is to be worked out, including for
goods that are originating goods of particular countries. Paragraph 16(1)(a) specifies that,
where goods are not the produce or manufacture of a Preference Country, or are not
originating goods under a Free Trade Agreement (FTA), the duty must be worked out by
reference to the general rate set out in the third column of the tariff classification in
Schedule 3 to the Customs Tariff Act, under which the goods are classified.
23. The purpose of new subparagraph 16(1)(a)(viiia) is to ensure that the general rate of customs
duty set out in Schedule 3 does not apply to Indian originating goods.
Item 8 After paragraph 16(1)(p)
24. This item inserts new paragraph 16(1)(pa) into the Customs Tariff Act. New
subparagraph 16(1)(pa)(i) provides that where Indian originating goods are classified to a
tariff heading or subheading in Schedule 3 that is specified in column 2 of an item in the table
in new Schedule 10A, the rate of customs duty on the goods is to be calculated by reference
to the rate of duty set out in column 3 of the relevant item in Schedule 10A.
25. However, where Indian originating goods are not classified to a tariff subheading listed in
new Schedule 10A, new subparagraph 16(1)(pa)(ii) provides for such goods to be subject to a
customs duty rate of 'Free', in accordance with Article 2.3 of Chapter 2 of the Agreement and
Section 2A of Annex 2A to Chapter 2 of the Agreement.
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Item 9 After subsection 16(4AB)
26. This item inserts new subsections 16(4AC) and 16(4AD) into the Customs Tariff Act.
27. New subsection 16(4AC) provides that a reference to year 2, 3, 4, and 5 in new Schedule 10A
for Indian originating goods, is a reference to the first, second, third, and fourth calendar year,
respectively, after this subsection commences.
28. This subsection commences when the Agreement enters into force for Australia. This accords
with the Notes for Schedule of Australia under Annex 2A and the Tariff Schedule of
Australia under that Annex, and is relevant to when phasing rates for certain Indian
originating goods come into effect. For example:
Indian originating goods
Column 1 Column 2 Column 3
Item Heading or subheading Rate
in Schedule 3
257 7608.20.00 4%
From 1 January of year 2: 3%
From 1 January of year 3: 2%
From 1 January of year 4: 1%
From 1 January of year 5: Free
29. If the Agreement enters into force after 1 January 2023, the rate of duty will be 4 per cent
from entry into force and will decrease to 3 per cent on 1 January 2024 (as 2024 would be the
first calendar year after entry into force), it will reduce further to 2 per cent on
1 January 2025, then to 1 per cent on 1 January 2026, and will become 'Free' on
1 January 2027 (as 2027 will be the fourth calendar year after entry into force). If the
Agreement enters into force before 1 January 2023, the rate of customs duty on entry into
force will be 4 per cent. This will reduce to 3 per cent on 1 January 2023, 2 per cent on
1 January 2024, 1 per cent on 1 January 2025 and will reduce to 'Free' on 1 January 2026.
30. See the notes for item 24 of the Bill below with respect to the consideration of the most
favoured nation applied rates of customs duty that apply to goods listed under new Schedule
10A.
31. New subsection 16(4AD) provides that where column 2 of an item in the table in Schedule
10A includes the phrase "(prescribed goods only)", then subparagraph 16(1)(pa)(i) will not
apply to the goods unless the goods are prescribed for the purposes of that item. Where goods
are not prescribed for any of such table items, the relevant goods are subject to a 'Free' rate
of customs duty.
32. New Schedule 10A contains three table items for tariff subheadings that include the reference
to "(prescribed goods only)" where the same tariff subheading is subject to different
preferential rates of customs duty. Table items 258, 259 and 260 set out different rates of
customs duty for different goods classified to the tariff subheadings in column 2 of the table
items.
Page 6 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
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Indian originating goods
Column 1 Column 2 Column 3
Item Heading or subheading Rate
in Schedule 3
258 9021.10.49 4%
(prescribed goods only) From 1 January of year 2: 3%
From 1 January of year 3: 2%
From 1 January of year 4: 1%
From 1 January of year 5: Free
259 9021.10.91 4%
(prescribed goods only) From 1 January of year 2: 3%
From 1 January of year 3: 2%
From 1 January of year 4: 1%
From 1 January of year 5: Free
260 9021.29.10 4%
(prescribed goods only) From 1 January of year 2: 3%
From 1 January of year 3: 2%
From 1 January of year 4: 1%
From 1 January of year 5: Free
33. In these circumstances, the rate in column 3 of the table item only applies to goods that are
prescribed for that item. The rate does not apply to other goods that are classified to the tariff
subheading in column 2 of the table item, but are not prescribed.
Item 10 After paragraph 18(1)(g)
34. Schedule 4 to the Customs Tariff Act lists items where a concessional rate of customs duty is
provided for particular goods and section 18 sets out how concessional rates of customs duty
are calculated. In particular, subsection 18(1) provides for a concessional rate of customs
duty to apply only where the rate is less than that, which would otherwise apply under
Schedule 3 and the Schedules that provide for preferential rates for originating goods under
an agreement to which Australia is a party.
35. Column 3 of Schedule 10A identifies phasing rates for subheadings that are also subject to
the DCS rates of "free" and "4%" in Schedule 3 to the Customs Tariff Act. Subsections 16(5)
and 18(3) of the Customs Tariff Act allow the lower DCS duty rates under paragraphs
16(1)(g) and 18(2)(g) to continue to apply to goods that are the produce or manufacture of
India, whether or not the goods are also Indian originating goods.
36. Item 10 inserts new paragraph 18(1)(ga) into the Customs Tariff Act. This paragraph will
specify that a concessional item in Schedule 4 only applies to goods if the duty is lower than
the duty payable under new Schedule 10A. This provision is consistent with the similar
provision for other Schedules to the Customs Tariff Act for other FTAs.
Item 11 After subparagraph 18(2)(a)(viii)
37. Paragraph 18(2)(a) provides that, if the goods are not the produce or manufacture of a
Preference Country, or a country to which an FTA applies, the duty must be worked out by
Page 7 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Bill 2022
reference to the general rate set out in the third column of an item in Schedule 4 that applies
to the goods.
38. Item 11 inserts new subparagraph 18(2)(a)(viiia) into the Customs Tariff Act which provides
that the general rate of customs duty set out in Schedule 4 will not apply to Indian originating
goods.
Item 12 After paragraph 18(2)(p)
39. Item 12 inserts new paragraph 18(2)(pa) into the Customs Tariff Act to set out how customs
duty is calculated for goods that are Indian originating goods and that are subject to a
concessional item in Schedule 4 of that Act. This new paragraph provides that, if the goods
are Indian originating goods and a rate that applies in relation to India is specified in the third
column of an item in Schedule 4, the amount of duty is calculated by reference to that
customs duty rate. If there is no such rate specified, the rate of customs duty is 'Free'.
40. Indian originating goods will also be subject to the DCS rate of duty under paragraph
18(2)(g). Subsection 18(3) provides that where more than one paragraph in subsection 18(2)
applies in relation to goods, then the paragraph which would apply the lesser rate of duty to
the goods is the one that applies to those goods.
Item 13 Paragraph 19AAC(1)(b)
41. Section 19 of the Customs Tariff Act provides for the automatic indexation of certain excise
equivalent customs duty rates in line with movements in the Consumer Price Index (CPI) in
February and August of each year. The goods to which automatic indexation applies are
certain alcohol and fuel products.
42. For this purpose, section 19AAC of the Customs Tariff Act includes a table that specifies the
fuel products subject to biannual indexation under section 19 of the Customs Tariff Act.
43. This item amends paragraph 19AAC(1)(b) of the Customs Tariff Act to insert a reference to
new Schedule 10A so that indexation under section 19 applies to the rates of excise
equivalent customs duty for those fuel products that are Indian originating goods.
Item 14 Paragraph 19AA(b)
44. Section 19AA of the Customs Tariff Act includes a table, which sets out the alcohol products
subject to biannual indexation for the purposes of section 19 of the Customs Tariff Act.
45. This item amends paragraph 19AA(b) of the Customs Tariff Act to insert a reference to new
Schedule 10A so that the indexation provisions in section 19 of the Customs Tariff Act apply
to the rates of excise equivalent customs duty for those alcohol products that are Indian
originating goods.
Item 15 Paragraph 19AC(b)
46. Section 19AB of the Customs Tariff Act provides for the automatic indexation of certain
excise equivalent rates of customs duty in line with movements in the full-time adult average
Page 8 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
Implementation) Bill 2022
weekly ordinary time earnings (AWOTE), in March and September of each year. The goods
to which this automatic indexation applies are tobacco products.
47. For this purpose, section 19AC of the Customs Tariff Act contains a table that sets out the
tobacco products subject to biannual indexation under section 19AB of the Customs Tariff
Act.
48. This item amends paragraph 19AC(b) of the Customs Tariff Act to insert a reference to new
Schedule 10A so that the indexation provisions in section 19AB apply to the rates of excise
equivalent customs duty for those tobacco products that are Indian originating goods.
Item 16 Paragraph 19ACA(1)(b)
49. Section 19ACA of the Customs Tariff Act provides for a list of tobacco products that are not
covered by section 19AC of the Customs Tariff Act, specifically tobacco products where the
amount of customs duty is determined by the weight of the product or the weight of the
tobacco content in the product.
50. For goods classified to a subheading listed in section 19ACA, the rate of customs duty is
amended biannually on the same day as the tobacco products listed in section 19AC. The
applicable rate is determined with reference to the indexed rate associated with tariff
subheading 2402.20.20 adjusted by the relevant annual weight conversion factor provided for
in subsection 19ACA(2).
51. This item amends paragraph 19ACA(1)(b) of the Customs Tariff Act to insert a reference to
new Schedule 10A so that the indexation provisions in section 19AB of that Act apply to the
rates of excise equivalent customs duty for those tobacco products that are Indian originating
goods.
Item 17 Schedule 4 (table item 17A, column headed "Rate of duty")
52. Table item 17A of Schedule 4 to the Customs Tariff Act provides for a concessional rate of
customs duty for goods produced in Australia that have been exported and returned to
Australia in an unaltered condition containing one or more components defined as 'tradex
components', 'drawback components' or 'excise components', within the meaning of the
table item, on which taxes or charges to the Commonwealth are owing.
53. For goods that satisfy these criteria, the rate of concessional customs duty is determined to be
the amount that would apply to each tradex component, drawback component and excise
component if imported separately. For excise components, duty that is determined by
reference to a percentage of the value of the good is to be disregarded.
54. This item amends the rate column of table item 17A of Schedule 4 to the Customs Tariff Act
to insert a reference to "IN" so that the concessional rate of customs duty applies to Indian
originating goods that satisfy the eligibility criteria.
Page 9 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
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Item 18 Schedule 4 (table item 20, column headed "Description of goods",
paragraph (d))
55. Table item 20 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law, being goods exported for repair or renovation
that are not new or upgraded versions of the exported goods. In this circumstance, the duty on
the goods, applied under a specified Schedule of the Customs Tariff Act, is worked out by
reference to a percentage of the value of the goods.
56. For goods that satisfy these criteria, a concessional rate of customs duty of 'Free' applies to
the value of the good that was exported and the applicable percentage set out in a specified
Schedule of the Customs Tariff Act applies to the value of the repair or renovation.
57. This item amends paragraph (d) of the description column of table item 20 of Schedule 4 to
the Customs Tariff Act to insert a reference to Schedule 10A so that the concessional rate of
customs duty applies to Indian originating goods that satisfy the eligibility criteria.
Item 19 Schedule 4 (table item 20, column headed "Rate of duty")
58. This item amends the rate column of table item 20 of Schedule 4 to the Customs Tariff Act to
insert a reference to "IN" so that the concessional rate of customs duty applies to Indian
originating goods that satisfy the eligibility criteria.
Item 20 Schedule 4 (table item 22, column headed "Rate of duty")
59. Table item 22 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law being containers used to import goods, which
will be exported without being put to any other use.
60. For goods that satisfy these criteria, a concessional rate of customs duty of 'Free' applies.
Table item 22 further provides that the goods imported on or in such containers are subject to
the rate of customs duty that would apply to the goods if they had been imported separately.
61. This item amends the rate column of table item 22 of Schedule 4 to the Customs Tariff Act to
insert references to "IN" so that the concessional rate of customs duty applies to Indian
originating goods that satisfy the eligibility criteria.
Item 21 Schedule 4 (table item 45, column headed "Rate of duty")
62. Table item 45 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law, being original components of a completed
machine or equipment that would be classified to a single tariff classification in Chapters 84
to 87 inclusive, or Chapters 89 to 90 inclusive, ordered and shipped from a single overseas
supplier at the same time, that arrive in Australia on two or more vessels or aircraft.
63. Table item 45 does not apply to goods to which table item 44 of Schedule 4 to the Customs
Tariff Act applies.
64. For goods that satisfy these criteria, the rate of customs duty that would apply to the
completed machine or equipment applies.
Page 10 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
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65. This item amends the rate column of table item 45 of Schedule 4 to the Customs Tariff Act to
insert a reference to "IN" so that the concessional rate of customs duty applies to Indian
originating goods that satisfy the eligibility criteria.
Item 22 Schedule 4 (table item 50, column headed "Rate of duty")
66. Table item 50 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods that are subject to a Tariff Concession Order (TCO). A TCO made by
the Comptroller-General of Customs under Part XVA of the Customs Act grants a
concessional rate of customs duty for the goods meeting the description set out in the TCO.
67. For goods subject to a TCO, the concessional rate of customs duty that applies is determined
by the tariff classification of the goods.
68. This item amends the rate column of table item 50 of Schedule 4 to the Customs Tariff Act to
insert references to "IN" so that the concessional rate of customs duty applies to Indian
originating goods that are described in a TCO.
Item 23 Schedule 4 (table item 53, at the end of the column headed "Rate of duty")
69. Table item 53 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods of tariff subheading 3819.00.00 that are exempt from the Product
Stewardship Oil Levy.
70. Table item 53 does not apply to goods to which table item 50 of Schedule 4 to the Customs
Tariff Act applies.
71. For goods that satisfy this criteria the concessional rate of customs duty of 5 per cent applies.
72. The item amends the rate column of table item 53 of Schedule 4 to the Customs Tariff Act to
insert a reference to "IN:5%" so that the concessional rate of customs duty applies to Indian
originating goods.
Item 24 After Schedule 10
73. This item inserts new Schedule 10A into the Customs Tariff Act to provide for
excise-equivalent rates of customs duty on certain alcohol, tobacco, fuel and petroleum
products and for preferential rates of customs duty and phasing rates of customs duty in
accordance with the Agreement that applies to certain goods.
74. Section 16 of the Customs Tariff Act, as amended by items 7, 8 and 9 of Schedule 1 to the
Bill, provides that the customs duty rate for Indian originating goods is 'Free' unless a
customs duty rate is specified for those goods in new Schedule 10A.
Page 11 Customs Tariff Amendment (India-Australia Economic Cooperation and Trade Agreement
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75. Article 2.3 of Chapter 2 of the Agreement provides in part that each Party shall eliminate or
reduce its customs duties on originating goods in accordance with its Schedule in Annex 2A.
The Schedule of Tariff Commitments of Australia under Annex 2A of the Agreement sets out
the tariff commitments for Australia under that Agreement in relation to the reduction of
tariffs in stages.
76. Table items 145 to 260 in new Schedule 10A reduce the customs duty on Indian originating
goods in accordance with the staging categories specified in the Schedule of Tariff
Commitments of Australia under Annex 2A of the Agreement. By 1 January of the fourth
calendar year after the Agreement enters into force, the ad valorem component of the
customs duties on all Indian originating goods in these table items will be eliminated.
77. Paragraph 5 of Article 2.3 provides that the lower rate shall be applied to the originating
goods of the other Party where the most-favoured-nation rate of customs duty applied for
those goods in a Party is lower than the rate of customs duty provided in that Party's
Schedule in Annex 2A.
78. For Australia, the most-favoured-nation rate of customs duty is the rate of customs duty that
is set out in Schedule 3 of the Customs Tariff Act. To give effect to Paragraph 5 of
Article 2.3 for goods referred to in new Schedule 10A, where the rate of customs duty set out
in the Schedule in Annex 2A for Australia is higher than the rate in Schedule 3 to the
Customs Tariff Act that applies to the goods, this lower rate is expressly set out in Schedule
10A. As there are currently no rates in Schedule 10A which are higher than those in Schedule
3, no adjustments are required. In the future, if any rates in Schedule 3 are reduced to a rate
lower than that in Schedule 10A, an adjustment would be made at that time.
79. Article 2.1 of Chapter 2 of the Agreement provides in part that customs duty does not include
duties that are equivalent to an internal tax imposed on the same goods when domestically
produced. Such goods are certain alcohol, tobacco, fuel and petroleum products that are
subject to customs duties at a rate that is equivalent to the excise duty imposed under the
Schedule to the Excise Tariff Act 1921 (the Excise Tariff Act), on those goods when
domestically produced.
80. Table items 1 to 144 in new Schedule 10A impose customs duty on certain alcohol, tobacco,
fuel and petroleum products that are Indian originating goods at a rate that is equivalent to the
excise duty imposed under the Excise Tariff Act on the same goods when domestically
produced.
Items 25 to 26 User's Guide
81. The User's Guide is located in the preamble of the Customs Tariff Act and provides a general
overview of the operation and organisation of the Customs Tariff Act.
82. These items amend the text of the User's Guide as required, to insert references to new
Schedule 10A for Indian originating goods so that users can identify provisions relating to
these originating goods.
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Item 27 Application provision
83. This item provides that the amendments made by items 1 to 12 and 17 to 24 of Schedule 1 to
the Bill apply in relation to:
(a) goods imported into Australia on or after the commencement of this Schedule; and
(b) goods imported into Australia before the commencement of this Schedule, where
the time for working out the rate of import duty on the goods had not occurred
before the commencement of this Schedule.
84. The amendments contained in Schedule 1 to the Bill will commence at the same time as
Schedule 1 to the Customs Amendment (India-Australia Economic Cooperation and Trade
Agreement Implementation) Bill 2022.
Item 28 Transitional provisions--indexation
85. This item provides for transitional provisions for alcohol duty rates and fuel duty rates, and
tobacco duty rates subject to indexation under sections 19 and 19AB respectively.
86. Sections 19, 19AA and 19AAC of the Customs Tariff Act provide that customs rates of duty
for certain alcohol and fuel products are adjusted automatically, twice yearly, in line with
movements in the CPI. These adjustments occur in February and August of each year.
Sections 19AB and 19AC of the Customs Tariff Act provides that rates of customs duty for
certain tobacco products, are adjusted automatically twice yearly, in line with movements in
the AWOTE. The adjustments occur in March and September of each year.
87. The Bill has been drafted using rates of customs duty that include those indexed as part of the
CPI and AWOTE increases that occurred on 1 August 2022 and 1 September 2022,
respectively, following the release of the June 2022 CPI and May 2022 AWOTE figure.
88. The transitional provisions, if required, will amend the alcohol, fuel and tobacco duty rates
currently on the face of the Bill such that upon commencement of Schedule 1, the customs
duty rates for relevant tariff subheadings in Schedule 10A will be increased by the indexation
amount or the sum of the indexation amounts in the case of multiple indexation events,
without the need for further legislative amendments.
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Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Tariff Amendment (India-Australia Economic Cooperation and Trade
Agreement Implementation) Bill 2022
The Customs Tariff Amendment (India-Australia Economic Cooperation and Trade
Agreement Implementation) Bill 2022 (the Bill) is compatible with human rights and
freedoms recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of the Bill is to amend the Customs Tariff Act 1995 (the Customs Tariff Act) to
give effect to the India-Australia Economic Cooperation and Trade Agreement (the
Agreement), signed on 2 April 2022. In particular, the Bill will:
• provide a 'Free' rate of customs duty for 'Indian originating goods' (other than
goods listed in new Schedule 10A) with effect from entry into force of the
Agreement;
• insert new Schedule 10A to:
(i) specify the phasing rates of customs duty for certain 'Indian originating
goods' that will incrementally reduce to 'Free' by the 5th calendar year after
the Agreement enters into force for Australia; and
(ii) maintain rates of customs duty on certain alcohol, tobacco and petroleum
products equivalent to the rates of excise duty payable on the same good when
locally manufactured; and
• amend Schedule 4 to maintain customs duty rates for certain 'Indian originating
goods' in accordance with the applicable concessional item.
The amendments contained in the Bill will commence at the same time as the Customs
Amendment (India-Australia Economic Cooperation and Trade Agreement Implementation)
Bill 2022 (the Customs Amendment Bill). That is, the later of the day on which this Act
receives the Royal Assent and the day on which the Agreement, done on 2 April 2022, enters
into force for Australia.
The Customs Amendment Bill will make complementary amendments to the Customs
Act 1901 (the Customs Act) to introduce rules of origin for goods imported into Australia
from India. These rules will determine whether goods are 'Indian originating goods' and
therefore eligible for preferential tariff treatment in accordance with the Agreement. These
rules will be set out in new Division 1JA of Part VIII of the Customs Act.
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Implementation) Bill 2022
Human rights implications
The Bill does not engage any of the applicable rights or freedoms.
Conclusions
The Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in the definition of human rights in section 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011.
The Honourable Clare O'Neil MP, Minister for Home Affairs
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Implementation) Bill 2022