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Customs Tariff Amendment Bill (No. 2) 2002

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2002

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

CUSTOMS TARIFF AMENDMENT BILL (NO. 2) 2002

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

(C irculated by authority of the

Minister for Justice and Customs, Senator

the Honourable Christopher Martin Ellison )



CUSTOMS TARIFF AMENDMENT BILL (nO. 2) 2002

 

 

GENERAL OUTLINE

 

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

 

 

NOTES ON CLAUSES

 

 

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

 

 

Schedule 1 - Amendments to the Customs Tariff Act 1995

 

Part 1 - Amendments having effect on and from 15 April 2002

 

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.

 

Item 1

 

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.

 

Items 2 and 3

 

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.

 

Item 4

 

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)).

 

Item 5

 

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).

 

Item 6

 

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.