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Customs Tariff Amendment Bill 2016

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2016

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

CUSTOMS TARIFF AMENDMENT BILL 2016

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Assistant Minister for Immigration and Border Protection

the Honourable Alex Hawke MP)



CUSTOMS TARIFF AMENDMENT BILL 2016

OUTLINE

The purpose of the Customs Tariff Amendment Bill 2016 (the Bill) is to make a number of minor amendments to the Customs Tariff Act 1995 (the Tariff Act).

Repealing Schedule 1 of the Tariff Act

Schedule 1 to the Tariff Act lists those countries and places to which special non-reciprocal rates of customs duty apply. The lists include Forum Island Countries, countries that are least developed and several categories of developing countries. Together these lists form Australia’s System of Tariff Preference.

Certain goods that originate from countries listed in Schedule 1 are entitled to a preferential rate of customs duty. For example, frozen sweet corn imported from Albania would be subject to a preferential rate of customs duty (4 per cent) rather than the general customs duty rate (5 per cent).

Amendments to these lists are made as required, for example, to update relevant lists when new countries are formed or to amend lists to reflect new preferential arrangements.

The Bill will repeal Schedule 1 to the Tariff Act and will enable its content to instead be included, with the same structure, in the Customs Tariff Regulations 2004 (the Customs Tariff Regulations). This will enable to list of countries and places to be more easily updated when required.

Repealing section 16A

The Thailand-Australia Free Trade Agreement contains safeguard provisions for certain tuna products (including canned tuna) and certain pineapple products. The safeguard provisions would have adjusted the customs duty rate of the relevant good back to the general customs duty rate once a specified amount of the goods were imported from Thailand. Activation of the safeguard provisions was at the discretion of the Minister for Agriculture.

The safeguard provisions, which are provided for in section 16A of the Customs Tariff Act, expired on 31 December 2008. Section 16A will therefore be repealed by the Bill.

Insertion of additional notes

The Bill will insert new Additional Notes into Chapters 7, 8 and 19 of Schedule 3 to the Tariff Act. Additional Notes assist with the classification of goods and only have the force of law for goods imported into Australia.

Recent decisions by the Administrative Appeals Tribunal have caused the Australian interpretation of the classification of provisional preserved fruits and vegetables and certain pastas to be misaligned with our international obligations and our major trading partners. The three new Additional Notes provided for in this Bill will correct the treatment of these goods.

Closure of the Enhance Project By-law Scheme

The Enhanced Project By-law Scheme (the Scheme) provides concessional tariff treatment for eligible goods supporting the mining, resource processing, agriculture, food processing, food packing, manufacturing, gas supply, water supply and power supply industries.

The closure of the Scheme to new applicants was announced in the 2016-17 Budget. Active determinations continue to be valid until their pre-determined expiry date. The last active determination will expire by 31 December 2017.

Item 44 of Schedule 4 to the Tariff Act provides for the Scheme. The text of this item will be amended consistent with the 2016-17 Budget Measure, to place an end date of 31 December 2017 on this item. This is to provide clarity to importers.

FINANCIAL IMPACT STATEMENT

The closure of the Enhance Project By-law Scheme is expected to increase customs duty collections by $220 million over the forward estimates.

 

2015-16

2016-17

2017-18

2018-19

2019-20

Revenue ($m)

-

60.0

60.0

50.0

50.0

The other amendments in this Bill have no financial impact.



Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

CUSTOMS TARIFF AMENDMENT BILL 2016

 

This Bill is compatible with the 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 Customs Tariff Amendment Bill 2016 (the Bill) amends the Customs Tariff Act 1995 (the Tariff Act) to:

·          repeal Schedule 1 to the Tariff Act - Classes of countries and places to which special rates apply, so that it can be included in the Customs Tariff Regulations 2004;

·          repeal Section 16A of the Tariff Act, which provides for the safeguard provisions of the Thailand-Australia Free Trade Agreement which expired on 31 December 2008;

·          insert additional notes into Chapters 7, 8 and 19 of Schedule 3 to the Tariff Act, to clarify the classification of certain fruits, vegetables and pastas; and

·          amend the text of Item 44 of Schedule 4 to the Tariff Act, to provide for an end date for the Item. 

 

Human rights implication

 

The Bill does not have any human rights implications.

 

Conclusion

 

The Bill is compatible with human rights.

 

ASSISTANT MINISTER FOR IMMIGRATION AND BORDER PROTECTION,

THE HONOURABLE ALEX HAWKE MP



CUSTOMS TARIFF AMENDMENT BILL 2015

NOTES ON CLAUSES

Clause 1 - Short title

1.          This clause provides for the Bill, when enacted, to be cited as the Customs Tariff Amendment Act 2016 .

Clause 2 - Commencement

2.          Subclause (1) provides that each provision of this Act specified in column 1 of the table in that subclause commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table.  This subclause also provides that any other statement in column 2 of the table has effect according to its terms.

3.          Item 1 of the table provides that sections 1 to 3 and anything in this Act not elsewhere covered by the table will commence on the day on which the Act receives the Royal Assent. 

4.          Item 2 of the table provides that Schedule 1 either commences on a single date to be fixed by Proclamation or if the provisions do not commence within the period of six months beginning on the day after this Act receives the Royal Assent, they commence on the day after the end of that period.

5.          Subclause (2) provides that column 3 of the table contains additional information that is not part of the Act.

Clause 3 - Schedules

6.          This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule.  In this Bill, the Customs Tariff Act 1995 (the Tariff Act) is being amended.

7.          The clause also provides that the other items of the Schedule have effect according to their terms.  This is a standard enabling clause for transitional, savings and application items in amending legislation. 



Schedule 1 - Amendments

Customs Tariff Act 1995

Items 1 to 5 and 8 to 10

8.          Items 1 to 5 and 8 to 10 are to clarify existing references within the Tariff Act.

9.          Items 1 and 3 to 5 and 8 to 10 replace references to ‘Schedule 1’ with ‘to the regulations’ in sections 3, 12, 14, 16 and 18 of the Tariff Act. These amendments complement the repeal of Schedule 1 to the Tariff Act and will allow its content to instead be included in the Customs Tariff Regulations. Item 11 refers.

10.        Item 2 clarifies the reference to ‘column 1’ in Section 12(a) to insert ‘of the table’. This amendment is consistent with the current wording in Sections 12(b) to (e).

Item 6 - Paragraph 16(1)(l)

11.        Paragraph 16(1)(l) provides for the calculation of duty for Thai originating goods, subject to the safeguard provisions of Section 16A of the Tariff Act.

12.        Item 6 removes the qualification on the definition of Thai originating goods contained in Paragraph 16(1)(l). This amendment reflects the repeal of Section 16A. Item 7 refers.

Item 7 - Section 16A

13.        Section 16A provides for the safeguard provisions of the Thailand-Australia Free Trade Agreement (TAFTA). Consistent with TAFTA, these provisions expired on 31 December 2008.

14.        Item 7 repeals this section.

Item 11 - Schedule 1

15.        Schedule 1 to the Tariff Act provides for classes of countries and places for which special rates apply. The countries and places listed in the Parts 1 to 5 of Schedule 1 are entitled to preferential rates of customs duty for certain goods.

16.        Item 11 repeals Schedule 1.  The amendments in Items 1 to 5 and 8 to 10 will enable its content to be included in the Customs Tariff Regulations, and will enable these countries and places to be more easily updated when required.

Item 12 - Schedule 3 (Chapter 7, at the end of the Notes)

17.        Chapter 7 of Schedule 3 to the Tariff Act provides for the classification of edible vegetables and certain roots and tubers. The Notes to this Chapter assist with the classification of certain goods.

18.        Chapter 7 provides different classifications for vegetables that are preserved solely for transportation and those vegetables which undergo a preservation technique in order to make a new type of food. Examples of such changes include fermenting cabbage into sauerkraut or pickling cucumbers into gherkins.

19.        As a result of an Administrative Appeals Tribunal decision, Australia’s treatment of some of these goods is no longer in alignment with international classification practice.

20.        Item 12 inserts a new Additional Note to clarify the classification of provisional preserved vegetables to tariff heading 0711. This new Additional Note will ensure that goods imported into Australia are classified in a consistent manner with Australia’s trading partners and its international obligations.

Item 13 - Schedule 3 (Chapter 8, at the end of the Notes)

21.        Chapter 8 of Schedule 3 to the Tariff Act provides for the classification of edible fruit, nuts and peel of citrus fruit and melons. The Notes to this Chapter assist with the classification of certain goods.

22.        Chapter 8 provides different classifications for fruits that are preserved solely for transportation and those fruits which undergo a preservation technique in order to make a new type of food. Examples of such changes include fruits steeped in alcohol.

23.        As a result of an Administrative Appeals Tribunal decision, Australia’s treatment of some of these goods is no longer in alignment with international classification practice.

24.        Item 13 inserts a new Additional Note to clarify the classification of provisional preserved fruits and nuts to tariff heading 0812. This new Additional Note will ensure that goods imported into Australia are classified in a consistent manner with Australia’s trading partners and its international obligations.

25.        This Additional Note provides the same functionality for fruit, nuts and peel as Item 12 does for vegetables. 

Item 14 - Schedule 3 (Chapter 19, at the end of the Notes)

26.        Chapter 19 of Schedule 3 to the Tariff Act provides for the classification of preparations of cereals, flours, starch, or milk and pastrycooks’ products. The Notes to this Chapter assist with the classification of certain goods.

27.        Under tariff heading 1902 in addition to the familiar Italian wheat noodles, the term ‘pasta’ is intended to cover other goods such as potato gnocchi, noodles of any country and products made of noodle dough.

28.        As a result of an Administrative Appeals Tribunal decision, Australia’s treatment of some of these goods is no longer in alignment with this international classification practice. 

29.        Item 14 inserts a new Additional Note to clarify the breath of the term ‘pasta’ for the purposes of tariff heading 1902. This new Additional Note will ensure that goods imported into Australia are classified in a consistent manner with Australia’s trading partners and its international obligations.

Item 15 - Schedule 4 (table item 44)

30.        Item 44 of Schedule 4 to the Tariff Act provides for the Enhanced Project By-law Scheme. Under this item, goods that meet the necessary conditions are afforded a concessional rate of customs duty.

31.        The closure of the Enhanced Project By-law Scheme to new applicants was announced in the 2016-17 Budget and was effective from 7.30pm on 3 May 2016. Pre-existing determinations continue to be valid until their pre-determined expiry date. All determinations will have expired by 31 December 2017.

32.        Item 15 amends the text to provide that Item 44 only applies in relation to goods entered for home consumption on or before 31 December 2017.

Items 16 and 17

33.        Items 16 and 17 amend references in the User’s guide. These amendments reflect the repeal of Schedule 1 to the Tariff Act. Item 11 refers.

34.        Item 16 substitutes the reference to ‘12 Schedules’ with a reference to ‘several Schedules’. Item 17 removes a reference to repealed Schedule 1.

Item 18 - Application provision

35.        This item provides that the amendments made by Items 1 to 14 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 yet occurred before the commencement of this Schedule. The item therefore provides that amendments to the Tariff Act contained in the Bill shall apply to goods that were imported before commencement but not entered into home consumption until on or after commencement.