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Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Bill 2020

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2019-2020

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

 

 

CUSTOMS TARIFF AMENDMENT (INCORPORATION OF PROPOSALS AND OTHER MEASURES) BILL 2020

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Assistant Minister for Customs, Community Safety and Multicultural Affairs, and Parliamentary Secretary to the Minister for Home Affairs, the Honourable Jason Wood MP)

 



CUSTOMS TARIFF AMENDMENT (INCORPORATION OF PROPOSALS AND OTHER MEASURES) BILL 2020

 

OUTLINE

 

The purpose of the Customs Tariff Amendment (Incorporation of Proposals and other Measures) Bill 2020 (the Bill) is to amend the Customs Tariff Act 1995 (the Customs Tariff Act) to:

·                insert new item 57 into Schedule 4 to provide for a ‘Free’ rate of customs duty for prescribed goods that are medical products or hygiene products and capable of use in combating the novel coronavirus that causes the disease known as COVID-19, between 1 February 2020 and 31 December 2020. The amendment is contained in Part 1 of Schedule 1 to the Bill;

·                repeal table items 348 to 360 of Schedule 6A, and table items 513 to 525 of Schedule 8B, removing the $12,000 special customs duty on used and second-hand motor vehicles that are Peruvian originating goods or that are Trans-Pacific Partnership originating goods. The associated concessional rate of duty provided for these goods under item 37 of Schedule 4 to the Customs Tariff Act are also repealed. These amendments are contained in Part 2 of Schedule 1 to the Bill;

·                insert new notes and subheadings in Schedule 3 to separately identify specifically formulated caffeinated beverages, formulated supplementary sports foods and formulated supplementary foods, as defined in the Australia New Zealand Food Standards Code made under the Food Standards Australia New Zealand Act 1991 . The amendments improve the monitoring of these goods as part of the Imported Food Inspection Scheme, and are contained in Parts 3 and 4 of Schedule 1 to the Bill;

·                insert new notes in Schedule 3 to: (a) specifically identify vitamins and food supplements; (b) provide that wheelie bins do not fall within the classification of vehicles; and (c) provide that plates, rods, angles, shapes, sections, tubes, pipes and the like requiring further modification prior to being used cannot be classified as parts. These amendments address decisions of the Federal Courts and the Administrative Appeals Tribunal (the AAT) which have caused a departure from international classification practice, as determined by the World Customs Organization. The amendments are contained in Parts 5, 6 and 7 of Schedule 1 to the Bill; and

·                repeal redundant provisions specifying phasing rates of customs duty under the free trade agreements with Chile, the United States of America, the Association of South East Asian Nations and New Zealand, Malaysia, Korea, Japan and China and other associated related provisions. The amendments are contained in Part 8 of Schedule 1 to the Bill.

 

FINANCIAL IMPACT STATEMENT

 

The temporary provision of a ‘Free’ rate of customs duty on certain medical and hygiene products between 1 February 2020 and 31 December of 2020 is estimated to reduce customs duty receipts by $15.8 million over this period.

 

The amendments to address Federal Court and AAT decisions will have negligible financial impact. The other amendments in this Bill will have no financial impact.

 

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.



CUSTOMS TARIFF AMENDMENT (INCORPORATION OF PROPOSALS AND OTHER MEASURES) BILL 2020

 

NOTES ON CLAUSES

 

Clause 1  Short title

 

1.             This clause provides that this Bill, when enacted, be cited as the ‘Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Act 2020’.

 

Clause 2  Commencement

 

2.             This clause sets out in a table the date on which provisions of the Bill, when enacted, will commence, and provides that any information in column 3 of the table is not part of this Act, and that information may be inserted in this column, or information in it may be edited, in any published version of this Act.

 

3.             Item 1 of the table provides that sections 1 to 3, and anything not covered elsewhere in the Bill, commences on the day the Act receives the Royal Assent.

 

4.             Item 2 of the table provides that Part 1 of Schedule 1 to the Bill is taken to have commenced on 1 February 2020.

 

5.             Item 3 of the table provides that Parts 2 to 8 of Schedule 1 to the Bill commence on the 28 th  day after the Bill receives the Royal Assent.

 

Clause 3  Schedules

 

6.             This 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 Customs 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

 

Part 1—Incorporation of proposals

 

Customs Tariff Act 1995

 

Item 1  At the end of Schedule 4

 

8.             Schedule 4 of the Customs Tariff Act provides concessional rates of customs duty for imported goods specified in an item in the table under that Schedule and to which related specified requirements for the specified goods are satisfied.

 

9.             On 1 May 2020 and 31 July 2020 notices were published in the Commonwealth Gazette . On 13 May 2020 and 27 August 2020 respectively, the Customs Tariff Proposal (No. 1) 2020 (the First Proposal) and the Customs Tariff Proposal (No. 2) 2020 (the Second Proposal), were tabled in Parliament in the same terms as the Gazette Notices. Together, the Notices and Proposals created concessional items in Schedule 4 of the Customs Tariff Act to provide a ‘Free’ rate of customs duty for prescribed goods that are medical products or hygiene products and capable of use in combating the novel coronavirus that causes the disease known as COVID-19, where the time for working out the rate of duty on the goods is between 1 February 2020 and 31 December 2020. The prescribed goods under customs by-laws 2019608 and 2041552 are face masks, gloves, gowns and clothes, goggles, glasses, eye visors, face shields, disinfectant preparations (excluding hand sanitiser), soaps, COVID-19 test kits and reagents and viral transport media.

 

10.         This item of the Bill incorporates the two Proposals into the Customs Tariff Act, inserting new table item 57 in Schedule 4 of the Customs Tariff Act that will cover the same goods covered by the Proposals and for the same period covered by the Proposals.

 

Part 2—Used or second-hand vehicles

 

Customs Tariff Act 1995

 

11.         On 1 January 2018, Part 4 of Schedule 2 of the Customs Tariff Amendment (Incorporation of Proposal and Other Measures) Act 2017 commenced, resulting in the repeal and substitution of the rate of customs duty that applied to goods classified to subheadings under Heading 8703 to Schedule 3, and the repeal of the special rate of customs duty for certain table items in Schedules 5 and 11 to the Customs Tariff Act. This was the special customs duty of $12,000, on used and second-hand motor vehicles imported into Australia from most countries.

 

12.         The $12,000 customs special duty was retained as part of the negotiated outcomes of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Peru-Australia Free Trade Agreement (PAFTA). As neither agreements allowed for unilateral tariff reductions prior to the agreement entering into force, the $12,000 special customs duty was legislated in Schedule 6A which provides for preferential customs duty rates for Peruvian originating goods and Schedule 8B which provides for Trans-Pacific Partnership originating goods.

 

13.         However, to ensure those importing used and second-hand motor vehicles under these agreements were not disadvantaged, item 37 of Schedule 4, as previously amended, provided a ‘Free’ rate of customs duty for Peruvian originating goods and Trans-Pacific Partnership originating goods.

 

14.         The CPTPP and the PAFTA entered into force on 30 December 2018 and 11 February 2020, respectively, and as such Australia is now able to unilaterally reduce the applicable tariff on used and second-hand motor vehicles. Part 2 of Schedule 1 to the Bill will repeal the special customs duty of $12,000 on Trans-Pacific Partnership originating goods and Peruvian originating goods.

 

Item 2 and 3  Schedule 4 (table item 37)

 

15.         Schedule 4 of 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 Schedules 3, 4A, 5, 6, 6A, 7, 8, 8B, 9, 9A, 10, 11, 12 or 13.

 

16.         Items 2 and 3 amend table item 37 in Schedule 4 to the Customs Tariff Act to omit ‘PE: Free’ and ‘TPP: Free’, removing the concessional rate of customs duty applicable to Peruvian originating goods and Trans-Pacific Partnership originating goods that are used or second-hand passenger motor vehicles. The concessional items were previously inserted to ensure importers of such goods were not disadvantaged.

 

17.         With the amendments made by items 4 and 5 of this Bill, which repeal table items under Schedules 6A and 8B of the Customs Tariff Act that set out the customs duty of $12,000 for Peruvian originating goods and Trans-Pacific Partnership originating goods that are used or second-hand motor vehicles, the concessional rate in Schedule 4 for such goods is no longer necessary.

 

Item 4  Schedule 6A (table items 348 to 360)

 

18.         Schedule 6A of the Customs Tariff Act sets out preferential rates of customs duty for Peruvian originating goods and table items 348 to 360 set out the special customs duty of $12,000 for Peruvian originating goods that are used or second-hand motor vehicles.

 

19.         This item repeals table items 348 to 360 of Schedule 6A to the Customs Tariff Act.

 

20.         The effect of the amendments under this item of the Bill is that importers will no longer be required to use the concessional item under Schedule 4 to claim a ‘Free’ rate of customs duty for these goods.

 

Item 5  Schedule 8B (table items 513 to 525)

 

21.         Schedule 8B of the Customs Tariff Act sets out preferential rates of customs duty for Trans-Pacific Partnership originating goods, per the CPTPP, and in table items 513 to 525 set out the customs duty of $12,000 for Trans-Pacific Partnership originating goods that are used or second-hand motor vehicles.

 

22.         This item repeals table items 513 to 525 of Schedule 8B to the Customs Tariff Act.

 

23.         Similar to the amendments made by the item above, the effect of the amendments under this item of the Bill is that importers will no longer be required to use the concessional item under Schedule 4 to claim a ‘Free’ rate of customs duty for these goods.

 

Item 6  Application provision

 

24.         This item provides that the amendments in this Part apply to goods imported into Australia:

(a)           on or after the commencement of this item; and

(b)          before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 3—Formulated caffeinated beverages

 

Customs Tariff Act 1995

 

25.         The Imported Food Inspection Scheme (the Scheme) verifies the safety and compliance of imported food. The Scheme is administered by Department of Agriculture, Water and the Environment, which takes a risk based approach to inspecting imported food based on advice from Food Standards Australia New Zealand. A greater level of verification is undertaken for foods determined to pose a potential medium to high risk to public health and safety.

 

26.         In 2020, supplementary sports foods and highly concentrated caffeine products were determined to present a medium to high level of risk. The purpose of this Part is to amend Schedule 3 of the Customs Tariff Act to identify more specifically formulated caffeinated beverages as they are defined under the Australian and New Zealand Food Standards Code (ANZFSC) made under the Food Standards Australia New Zealand Act 1991 .

 

Item 7  Schedule 3 (Chapter 22, at the end of the Additional Notes)

 

27.         Subheading 2202.10.00 under Chapter 22 of Schedule 3 to the Customs Tariff Act provides the tariff classifications for waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured. The Additional Notes supplement the Notes to the Chapter and assist with the classification of certain goods.

 

28.         This item adds a new Additional Note 12 under Chapter 22 of Schedule 3 to the Customs Tariff Act. New Additional Note 12 incorporates, by reference, the meaning of formulated caffeinated beverage as defined in the ANZFSC, as in force from time to time, into Chapter 22 of Schedule 3 to the Customs Tariff Act.

 

29.         Under section 1.1.2—6 of Standard 1.1.2 of the ANZFSC, formulated caffeinated beverages are defined as a flavoured, non-alcoholic beverage, or a flavoured, non-alcoholic beverage to which other substances (for example, carbohydrates, amino acids, vitamins) have been added, that:

(a)           contains caffeine; and

(b)          has the purpose of enhancing mental performance.

 

30.         For the definition of formulated caffeinated beverages , section 1.1.2—3 of Standard 1.1.2 of the ANZFSC defines non-alcoholic beverages as:

(i)            packaged water; or

(ii)          a water-based beverage, or a water-based beverage that contains other foods (other than alcoholic beverages); or

(iii)        an electrolyte drink;

but does not include a brewed soft drink.

 

Item 8  Schedule 3 (subheading 2202.10.00)

 

31.         This item repeals Subheading 2201.10.00 of Schedule 3 to the Customs Tariff Act and substitutes with the following:

 

2202.10

-Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured:

 

2202.10.50

---Formulated caffeinated beverages, as defined in Additional Note 12 to this Chapter, containing at least 145 mg/L of caffeine

5%

DCS:4%

DCT:5%

2202.10.90

---Other

5%

DCS:4%

DCT:5%

 

32.         The purpose of this amendment is to separately identify, under Subheading 2202.10.50, goods that are formulated caffeinated beverages containing at least 145mg/L of caffeine from other water-based beverages, while partially capturing goods previously classified to repealed Subheading 2202.10.00. All other goods, previously classified to repealed Subheading 2202.10.00, will be classified to Subheading 2202.10.90. This amendment does not change or alter the rate of customs duty payable for imported goods under Subheading 2202.10.

 

Item 9  Application provision

 

33.         This item provides that amendments made by Part 3 of Schedule 1 of the Bill apply in relation to:

(a)           goods imported into Australia on or after the commencement of this item; and

(b)          goods imported into Australia before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 4—Formulated supplementary food and formulated supplementary sports food

 

Customs Tariff Act 1995

 

34.         Similar to amendments made by Part 3, the purpose of Part 4 is to amend Schedule 3 of the Customs Tariff Act to separately identify formulated supplementary food and formulated supplementary sports food as they are defined under the ANZFSC, as in force from time to time.

 

Item 10  Schedule 3 (Chapter 21, the title “Additional Note.”)

 

35.         This item makes a technical change to the title ‘Additional Note.’ in Chapter 21 of Schedule 3 to the Customs Tariff Act, repealing and substituting the title with ‘Additional Notes.’. The amendment is consequential on the amendments made by item 11 of the Bill, which will insert new Additional Notes into Chapter 21.

 

Item 11  Schedule 3 (Chapter 21, at the end of the Additional Note)

 

36.         Subheading 2106.90.10 under Chapter 21 of Schedule 3 to the Customs Tariff Act provides the tariff classifications for goods that are compound alcoholic preparations of a kind used for the manufacture of beverages, food preparations of flour or meal; and hydrolysed protein.

 

37.         The Additional Notes supplement the Notes to the Chapter and assist with the classification of certain goods. This item adds two Additional Notes to Chapter 21. The two new Additional Notes incorporate, by reference, the meaning of formulated supplementary food and formulated supplementary sports food as defined in the ANZFSC, as in force from time to time, into Chapter 21 of Schedule 3 to the Customs Tariff Act.

 

38.         Section 1.1.2—3 of Standard 1.1.2 of the ANZFSC defines formulated supplementary foods as a food specifically formulated as, and sold on the basis that it is, a supplement to a normal diet to address situations where intakes of energy and nutrients may not be adequate to meet an individual’s requirements. The same section of the Standard 1.1.2 also defines formulated supplementary sports foods as a product that is specifically formulated to assist sports people in achieving specific nutritional or performance goals.

 

Item 12  Schedule 3 (subheading 2106.90.10)

 

39.         This item repeals Subheading 2106.90.10 of Schedule 3 to the Customs Tariff Act and substitutes with the following:

 

2106.90.1

--- Goods, as follows:

    (a)  compound alcoholic preparations of a kind used for the manufacture of beverages;

    (b)  food preparations of flour or meal;

   (c) hydrolysed protein:

 

2106.90.15

---- Formulated supplementary food, as defined in Additional Note 2 to this Chapter

5%

DCS4%

DCT:5%

2106.90.16

----F ormulated supplementary sports food , as defined in Additional Note 3 to this Chapter

5%

DCS:4%

DCT:5%

2106.90.19

----Other

5%

DCS:4%

DCT:5%

 

40.         The purpose of this amendment is to separately identify under Subheading 2106.90.1, goods that are formulated supplementary food (Subheading 2106.90.15) and goods that are formulated supplementary sports food (Subheading 2106.90.16), while partially capturing goods previously classified to repealed Subheading 2106.90.10. All other goods, previously classified to repealed Subheading 2106.90.10, will be classified to Subheading 2106.90.19. This amendment does not change or alter the rate of customs duty payable for imported goods under Subheading 2106.90.10.

 

Item 13  Schedule 3 (subheading 2106.90.90)

 

41.         This item repeals Subheading 2106.90.90 in Schedule 3 to the Customs Tariff Act and substitutes with the following:

 

2106.90.9

--- Other:

 

2106.90.95

---- Formulated supplementary food, as defined in Additional Note 2 to this Chapter

4%

DCS:Free

2106.90.96

----F ormulated supplementary sports food , as defined in Additional Note 3 to this Chapter

4%

DCS:Free

2106.90.99

----Other

4%

DCS:Free

 

42.         The purpose of this amendment is to separately identify under Subheading 2106.90.9, goods that are formulated supplementary food (Subheading 2106.90.95 ) and goods that are formulated supplementary sports food (Subheading 2106.90.96), while partially capturing goods previously classified to repealed Subheading 2106.90.90. All other goods, previously classified to repealed Subheading 2106.90.90, will be classified to Subheading 2106.90.99. This amendment does not change or alter the rate of customs duty payable for imported goods under Subheading 2106.90.10.

 

43.         The amendments in items 12 and 13 will also assist in the domestic monitoring of imported goods that are formulated supplementary food and of formulated supplementary sports food under the Scheme.

 

Item 14  Application provision

 

44.         This item provides that the amendments made in Part 4 of Schedule 1 of this Bill will apply in relation to:

(a)           goods imported into Australia on or after the commencement of this item; and

(b)          goods imported into Australia before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 5—Vitamins and food supplements

 

Customs Tariff Act 1995

 

45.         In 2017, the Administrative Appeals Tribunal (AAT) determined that a range of vitamin and mineral products in the form of sugar pastilles weight loss gummies containing garcinia cambogia are classified to Heading 3004 of Schedule 3 to the Customs Tariff Act as medicaments for therapeutic or prophylactic uses. After an intermediate appeal to the Full Federal Court, the High Court ultimately held no legal error was committed in the AAT classification. The World Customs Organization (WCO) requires that medicaments of Chapter 30 of Schedule 3 must be medicines that treat or prevent particular diseases. The WCO has consistently classified goods that contain low doses of vitamins and/or minerals and/or plant extracts, intended to supplement a person’s diet, and contribute to general well-being, as ‘food supplements’ which are expressly excluded from Chapter 30 by a Harmonized System Chapter Note. Such products are classified by the WCO as various foods rather than as medicaments of Chapter 30. The ruling of the AAT and the High Court has resulted in Australia’s classification of these goods being inconsistent with international classification used by other countries and by the WCO.

 

46.         This Part inserts an Additional Note into Section IV, and two Additional Notes into Chapter 30 of Schedule 3 to the Customs Tariff Act to address the effect of these decisions, and bring Australia’s classification of vitamin products and other supplements back into alignment with international classification practice.

 

Item 15  Schedule 3 (Section IV, at the end of the Note)

 

47.         Item 15 inserts an Additional Note to Section IV of the Customs Tariff Act and provides that the goods excluded from Headings 3003 and 3004 due to the new Additional Notes to Chapter 30 must be classified to Heading 2106 (which refers to ‘food preparations not elsewhere specified or included’) unless classifiable under another heading. The effect of this Additional Note is that the vitamin products and other supplements which will now be excluded from Headings 3003 or 3004, must be classified under Heading 2106 unless another, more specific heading applies.

 

Item 16  Schedule 3 (Chapter 30, the title “Additional Note.”)

 

48.         This item makes a technical change to the title of ‘Additional Note’ in Chapter 30 of Schedule 3 to the Customs Tariff Act, repealing and substituting the title with ‘Additional Notes. This amendment in consequential on the amendments made by item 17 of this Bill, which will insert two new Additional Notes into Chapter 30.

 

Item 17  Schedule 3 (Chapter 30, at the end of the Additional Note)

 

49.         This item inserts two new Additional Notes into Chapter 30 of Schedule 3 to the Customs Tariff Act.

 

50.         New Additional Note 2 provides that goods that contain vitamins or other products of heading 2936 are excluded from Headings 3003 and 3004 unless the goods are goods to which Schedule 2, 3, 4 or 8 to the current Poisons Standard (within the meaning of the Therapeutic Goods Act 1989 and as in force from time to time) applies. This note also provides that medicaments prepared for intravenous, sub-cutaneous or intramuscular use are excluded from this Note.

 

51.         New Additional Note 3 provides that goods that are dietary or other supplements containing:

(a)           chemicals or compounds of Chapter 28 or 29; or

(b)          plants, or parts of plants, of Heading 1211;

are excluded from Headings 3003 and 3004 unless the goods are goods to which Schedule 2, 3, 4 or 8 to the current Poisons Standard (within the meaning of the Therapeutic Goods Act 1989 and as in force from time to time) applies. This note also provides that medicaments prepared for intravenous, subcutaneous or intramuscular use are excluded from this Note.

 

52.         Schedules 2, 3, 4 and 8 of the Poisons Standard refer to Pharmacy Medicine, Pharmacist Only Medicine, Prescription Only Medicine and Controlled Drug respectively. Referencing the medicines specified in these Schedules of the Poisons Standard provide an objective and certain means of distinguishing between vitamin and other supplements that may be classified as medicaments and those that cannot. It will ensure that Australia’s classification of these goods is consistent with their classification by the WCO and by most other countries.

 

53.         The purpose of this Part is to provide for the classification of these goods as medicaments or other substances. It will not affect the status of goods regulated as therapeutic goods under the Therapeutic Goods Act 1989 , or any other Act.

 

Item 18  Application Provision

 

54.         This item provides that the amendments made in Part 5 of Schedule 1 of this Bill will apply in relation to:

(a)           goods imported into Australia on or after the commencement of this item; and

(b)          goods imported into Australia before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 6—Wheelie bins

 

Customs Tariff Act 1995

 

55.         An AAT decision has classified wheeled garbage bins, commonly known as ‘wheelie bins’ as un-motorised vehicles of Heading 8716 of Schedule 3 to the Customs Tariff Act. This interpretation does not accord with the classification of these goods by other countries and the WCO, resulting in Australia’s classification of these goods being out of alignment with international tariff classification practice.

 

56.         This Part of the Bill will insert an Additional Note in Chapter 87 of Schedule 3 to realign Australia’s classification of wheelie bins with international practice.

 

Item 19  Schedule 3 (Chapter 87, at the end of the Additional Notes)

 

57.         This item adds new Additional Note 8 under Chapter 87 of Schedule 3 to the Customs Tariff Act. New Additional Note 8 provides that Heading 8716 does not cover mobile garbage bins (including those commonly known as wheelie bins) and the like (Chapter 39 or Section XV of Schedule 3).

 

58.         The effect of the amendment is to exclude mobile garbage bins (‘wheelie bins’) and similar goods from classification to this heading as un-motorised ‘vehicles’. The note ensures that these goods are classified to headings in Section XV or Chapter 39.

 

Item 20  Application provision

 

59.         This item provides that the amendments made by Part 6 of Schedule 1 of this Bill apply in relation to:

(a)           goods imported into Australia on or after the commencement of this item; and

(b)          goods imported into Australia before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 7—Metal profiles and pipes

 

Customs Tariff Act 1995

 

60.         The AAT has determined that various goods that are metal profiles, and which require further modification before being used as parts in furniture or other goods, should be classified as parts of that final good. Furthermore, the AAT has also determined that pipes, produced to convey fluids inside buildings, should be classified as parts of a steel structure. These decisions have resulted in Australia’s classification of these goods differing from established international practice.

 

61.         This Part of the Bill will insert Additional Notes in Chapters 73, 76, 83 and 94 of Schedule 3 to the Customs Tariff Act to realign Australia’s classification of metal profiles, tubes and other shapes with international practice.

 

Item 21  Schedule 3 (Chapter 73, the title “Additional Note.”)

 

62.         This item makes technical change to the title of ‘Additional Note’ in Chapter 73 of Schedule 3 to the Customs Tariff Act, repealing and substituting with ‘Additional Notes.’. This amendment is consequential on the amendments made by item 22 of this Bill, which inserts a new Additional Note into Chapter 73.

 

Items 22, 23, 24 and 25

 

63.         Heading 7308 of Chapter 73 of Schedule 3 to the Customs Tariff Act applies to ‘structures and parts of structures of iron or steel, and plates, rods, angles, shapes, sections, tubes, pipes and similar articles for use in structures of iron or steel.’.

 

64.         Item 22 of this Bill adds a new Additional Note 2 into Chapter 73. New Additional Note 2 provides that Heading 7308 does not include:

(a)           plates, rods, angles, shapes, sections, tubes, pipes and the like, requiring further modification before use in structures, including, but not limited to, cutting, drilling and bending; or

(b)          tubes, pipes and the like prepared for the conveyance of fluids (including water, oil and gas).

 

65.         Heading 7610 of Chapter 76 of Schedule 3 to the Customs Tariff Act applies to ‘aluminium structures and parts of structures, and aluminium plates, rods, profiles, tubes and like goods prepared for use in structures’.

 

66.         Item 23 of this Bill adds new Additional Note 1 (including the heading for the new Additional Note) into Chapter 76. New Additional Note 1 provides that Heading 7610 does not include plates, rods, angles, shapes, sections, tubes, pipes and the like, that require further modification before use in structures, including, but not limited to, cutting, drilling and bending.

 

67.         Heading 8302 of Chapter 83 of Schedule 3 to the Customs Tariff Act applies to ‘base metal mountings, fittings and similar articles for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets and similar articles, base metal hat-racks, hat-pegs, brackets and similar fixtures, castors and automatic door closers’.

 

68.         Item 24 of this Bill adds new Additional Note 1 into Chapter 83. New Additional Note 1 provides that Heading 8302 does not include plates, rods, angles, shapes, sections, tubes, pipes and the like, that require further modification before use, including, but not limited to, cutting, drilling and bending.

 

69.         Heading 9403 of Chapter 94 of Schedule 3 to the Customs Tariff Act applies to ‘certain furniture and parts thereof’.

 

70.         Item 25 of this Bill adds Additional Note 1 into Chapter 94. New Additional Note 1 provides that Heading 9403 does not include plates, rods, angles, shapes, sections, tubes, pipes and the like, that require further modification before use, including, but not limited to, cutting, drilling and bending (Section XV of Schedule 3 to the Customs Tariff Act).

 

71.         The combined effect of these new Additional Notes is that plates, rods, angles, shapes, sections, tubes, pipes and similar goods that require further modification are excluded from being classified to Headings 7308, 7610, 8302 or 9403. Further tubes and pipes for the conveyance of fluids are excluded from Heading 7308. The exclusion of such goods is consistent with accepted international classification practices. This will ensure that these goods are classified in other headings which refer to metal plates, rods, angles, shapes, sections, tubes, pipes, and profiles, in accordance with international classification practice.

 

Item 26  Application Provision

 

72.         This item provides that amendments made by Part 7 of Schedule 1 of this Bill, apply in relation to:

(a)           goods imported into Australia on or after the commencement of this item; and

(b)          goods imported into Australia before the commencement of this item, where the time for working out the rate of import duty on the goods had not occurred before that commencement.

 

Part 8—Technical amendments

 

Customs Tariff Act 1995

 

Item 27  Paragraph 16(1)(k) (note)

 

73.         Paragraph 16(1)(k) provides for the calculation of customs duty for US originating goods. The rate of customs duty is specified for certain goods in the table in Schedule 5 of the Customs Tariff Act. Where goods are classified to a subheading that is not specified in Schedule 5, the rate of customs duty is ‘Free’.

 

74.         Item 27 repeals the note under paragraph 16(1)(k), which sets out the qualification on the calculation of customs duty for US originating goods. This amendment is consequential on the amendments made item 31 of this Bill, which repeals subsection 16(2) of the Customs Tariff Act.

 

Item 28  Paragraph 16(1)(m) (note)

 

75.         Paragraph 16(1)(m) provides for the calculation of customs duty for Chilean originating goods. The rate of customs duty is specified for certain goods in the table in Schedule 7 of the Customs Tariff Act. Where goods are classified to a subheading not specified in Schedule 7, the rate of customs duty is ‘Free’.

 

76.         Item 28 repeals the note under paragraph 16(1)(m) which contains the qualification on the calculation of customs duty for Chilean originating goods. This amendment is consequential on the amendments made item 31 of this Bill, which repeals subsection 16(2A) of the Customs Tariff Act.

 

Item 29  Paragraph 16(1)(n) (note)

 

77.         Paragraph 16(1)(n) provides for the calculation of customs duty for ASEAN- Australia- New Zealand (AANZ) originating goods. The rate of customs duty is specified for certain goods in the table in Schedule 8 of the Customs Tariff Act. Where goods are not classified to a subheading specified in Schedule 8, the rate of customs duty is ‘Free’.

 

78.         Item 29 repeals the note under paragraph 16(1)(n) which contains the qualification on the calculation of customs duty for AANZ originating goods. This amendment is consequential on the amendments made by item 31 of this Bill, which repeals subsections 16(3) and 16(4) of the Customs Tariff Act.

 

Item 30  Paragraph 16(1)(r) (note)

 

79.         Paragraph 16(1)(r) provides for the calculation of customs duty for Chinese originating goods. The rate of customs is specified for certain goods in the table in Schedule 12 of the Customs Tariff Act. Where goods are classified to a subheading not listed in Schedule 12, the rate of customs duty is ‘Free’.

 

80.         Item 30 repeals the note under paragraph 16(1)(r) which contains the qualification on the calculation of customs duty for Chinese originating goods. This amendment is consequential on the amendments made by item 31 of this Bill, which repeals subsection 16(4A) of the Customs Tariff Act.

 

Item 31  Subsections 16(2), (2A), (3), (4) and (4A)

 

81.         Under free trade agreements commitments can be made which result in different rates of customs duty applying to goods classified to the same tariff subheading. To accommodate the different customs duty rates, subsets of goods within a single tariff subheading can be prescribed. These are referred to as ‘prescribed goods’.

 

82.         Item 31 of this Bill repeals subsection 16(2) of the Customs Tariff Act, which provides for the calculation of customs duty for prescribed goods that are US originating. The amendment is consequential on the amendments made by item 33 of this Bill, which repeal table items 134 to 955 of Schedule 5 to the Customs Tariff Act.

 

83.         This item also repeals subsection 16(2A) of the Customs Tariff Act, which provides for the calculation of customs duty for prescribed goods that are Chilean originating. The amendment is consequential on the amendments made by item 39 of this Bill, which repeal table items 120 to 674 of Schedule 7 to the Customs Tariff Act.

 

84.         This item also repeals subsections 16(3) and 16(4) of the Customs Tariff Act. Subsection 16(3) provides for the calculation of customs duty for prescribed goods that are AANZ originating goods. Subsection 16(4) provides for the calculation of customs duty for AANZ originating goods that have been imported from the country specified in individual items. The amendments are consequential on the amendments made by items 41 and 42 of this Bill, which repeal table items 112 to 114 and 132 to 370 of Schedule 8 to the Customs Tariff Act.

 

85.         This item also repeals subsection 16(4A) of the Customs Tariff Act, which provides clarification for references to years 2, 3, 4 and 5 in the table in Schedule 12 to the Customs Tariff Act which applies to Chinese originating goods. In accordance with the subsection, the years correspond to 2016, 2017, 2018 and 2019 respectively. The amendment is consequential on the amendments made by items 75 to 77 of this Bill, which repeal table items 1 to 6, 126 and 144 to 657 of Schedule 12 to the Customs Tariff Act.

 

Items 32 and 33

 

86.         Schedule 5 of the Customs Tariff Act provides for the preferential rates of customs duty for US originating goods. The Schedule lists the tariff subheading for which there was a customs duty rate other than ‘Free’ upon entry into force of the Australia-US Free Trade Agreement. All of these rates have now phased down to ‘Free’ in accordance with this Agreement. Under paragraph 16(1)(k) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to US originating goods classified to tariff subheadings not listed in the table in Schedule 5 to the Customs Tariff Act.

 

87.         Items 32 and 33 repeal the items in the table in Schedule 5 where the rate of customs duty have all phased down to ‘Free’ as they are redundant due to the operation of paragraph 16(1)(k).

 

Items 34 to 37

 

88.         Schedule 6 of the Customs Tariff Act provides for the preferential rates of customs duty for Thai originating goods. The Schedule lists goods which had a customs duty rate other than ‘Free’ upon entry into force of the Thailand-Australia Free Trade Agreement. All of these rates have now phased down to ‘Free’ in accordance with this Agreement. Under paragraph 16(1)(l) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to Thai originating goods classified to tariff subheadings not listed in the table in Schedule 6 to the Customs Tariff Act.

 

89.         Items 34 to 37 repeal items in the table in Schedule 6 where the rate of customs duty have all phased down to ‘Free’ as they are redundant due to the operation of paragraph 16(1)(l).

 

Items 38 and 39

 

90.         Schedule 7 of the Customs Tariff Act provides for the preferential rates of customs duty for Chilean originating goods. The Schedule lists the originating goods for which there was a customs duty rate other than ‘Free’ at entry into force of the Australia-Chile Free Trade Agreement. All of these rates have now phased down to ‘Free’ in accordance with this Agreement. Under paragraph 16(1)(m) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to Chilean originating goods classified to tariff subheadings not listed in the table in Schedule 7 to the Customs Tariff Act.

 

91.         Items 38 and 39 repeal the items to the table in Schedule 7 where the rate of customs duty have all phased down to ‘Free’ as they are redundant due to the operation of paragraph 16(1)(m).

 

Items 40 to 42

 

92.         Schedule 8 of the Customs Tariff Act provides for the preferential rates of customs duty for AANZ originating goods. The Schedule lists the originating goods for which there was a customs duty rate other than ‘Free’ at the entry into force of the Agreement Establishing the ASEAN-Australia- New Zealand Free Trade Area. All of these rates have now phased down to ‘Free’ in accordance with this Agreement. Under paragraph 16(1)(n) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to AANZ originating goods classified to tariff subheadings not listed in the table in Schedule 8 to the Customs Tariff Act.

 

93.         Items 40 to 42 repeal the items in the table in Schedule 8 where the rate of customs duty have all phased down to ‘Free’ as they are redundant due to the operation of paragraph 16(1)(n).

 

Items 43 to 50

 

94.         Schedule 9 of the Customs Tariff Act provides for the preferential rates of customs duty for Malaysian originating goods. The Schedule lists goods for which a rate of customs duty other than ‘Free’ applied at the entry into force of the Malaysia-Australia Free Trade Agreement (MAFTA).

 

95.         Items 43, 45, 47 and 49 to 48 of this Bill omit the rates of customs duty for liquefied natural gas of Subheading 2711.11.00, liquefied petroleum gas (LPG) of Subheadings 2711.12.10 and 2711.13.10, and compressed natural gas (CNG) of Subheading 2711.21.10, specified in column 3 of the table under Schedule 9, which applied at entry into force of MAFTA or commenced on 1 July 2013 or 1 July 2014. Items 44, 46, 48 and 50 of this Bill omit the words ‘From 1 July 2015’ from column 3 for these items to the table to Schedule 9. The effect of these amendments is that only the rate of customs duty that commenced in 2015 is specified in column 3 for each of the table items under Schedule 9 to the Customs Tariff Act for the subheadings mentioned.

 

Items 51 to 61

 

96.         Schedule 10 of the Customs Tariff Act provides for the preferential rates of customs duty for Korean originating goods. The Schedule lists goods for which a rate of customs duty other than ‘Free’ applied at the entry into force of the Korea-Australia Free Trade Agreement (KAFTA).

 

97.         Items 51, 53, 55 and 57 of this Bill omit the rates of customs duty for liquefied natural gas of Subheading 2711.11.00, LPG of Subheadings 2711.12.10 and 2711.13.10, and CNG of Subheading 2711.21.10, specified in column 3 of the table under Schedule 10, which applied at entry into force of KAFTA. Items 52, 54, 56 and 58 of this Bill omit the words ‘From 1 July 2015’ from column 3 for these table items of Schedule 10. The effect of these amendments is that only the rate of customs duty that commenced in 2015 is specified in column 3 for each of the table items under Schedule 10 to the Customs Tariff Act for the subheadings mentioned.

 

98.         Items 59 to 61 of Bill repeal the items in the table, under Schedule 10 to the Customs Tariff Act, which have a ‘Free’ rate of customs duty specified in column 3 of the table. The rate of customs duty for these items have all phased down to ‘Free’ in accordance with this Agreement and are redundant due to the operation of paragraph 16(1)(p) of the Customs Tariff Act. Under paragraph 16(1)(p) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to Korean originating goods classified to tariff subheadings not listed in the table in Schedule 10 to the Customs Tariff Act.

 

Items 62 to 74

 

99.         Schedule 11 of the Customs Tariff Act provides for the preferential rates of customs duty for Japanese originating goods. The Schedule lists goods for which a rate of customs duty other than ‘Free’ applied at entry into force of the Japan-Australia Economic Partnership Agreement (JAEPA).

 

100.     Items 62, 64, 66 and 68 of this Bill omit the rates of customs duty for liquefied natural gas of Subheading 2711.11.00, LPG of Subheadings 2711.12.10 and 2711.13.10, and CNG of Subheading 2711.21.10, specified in column 3 of the table to Schedule 11, which applied at entry into force of JAEPA. Items 63, 65, 67 and 69 of this Bill omit the words ‘From 1 July 2015’ from column 3 for each of these table items of Schedule 11. The effect of these amendments is that only the rate of customs duty that commenced in 2015 is specified in column 3 for each of the table items under Schedule 11 to the Customs Tariff Act for the subheadings mentioned.

 

101.     Items 70 to 74 of the Bill repeal the items in the table, under Schedule 11 to the Customs Tariff Act, which have a ‘Free’ rate of customs duty specified in column 3 of the table. The rate of customs duty for these items have all phased down to ‘Free’ in accordance with this Agreement and are redundant due to the operation of paragraph 16(1)(q) of the Customs Tariff Act. Under paragraph 16(1)(q) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to Japanese originating goods classified to tariff subheadings not listed in the table in Schedule 11 to the Customs Tariff Act.

 

Items 75 to 77

 

102.     Schedule 12 of the Customs Tariff Act provides for preferential rates of customs duty for Chinese originating goods. The Schedule lists goods which had a customs duty rate other than ‘Free’ at the entry into force of the China-Australia Free Trade Agreement.

 

103.     Items 75 to 77 of this Bill repeal the items in the table, under Schedule 12 to the Customs Tariff Act, which have a ‘Free’ rate of customs duty specified in column 3 of the table. The rate of customs duty for these items have all phased down to ‘Free’ in accordance with this Agreement and are redundant due to the operation of paragraph 16(1)(r) of the Customs Tariff Act. Under paragraph 16(1)(r) of the Customs Tariff Act, a ‘Free’ rate of customs duty applies to Chinese originating goods classified to tariff subheadings not listed in the table in Schedule 12 to the Customs Tariff Act.

 



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 (Incorporation of Proposals and other Measures) Bill 2020

 

This 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

 

This Bill amends the Customs Tariff Act 1995 (the Customs Tariff Act) to:

·                insert new item 57 into Schedule 4 to provide for a ‘Free’ rate of customs duty for prescribed goods that are medical products or hygiene products and capable of use in combating the novel coronavirus that causes the disease known as COVID-19, and imported between 1 February 2020 and 31 December 2020;

·                repeal table items 348 to 360 of Schedule 6A, and table items 513 to 525 of Schedule 8B, removing the $12,000 special customs duty on used and second-hand motor vehicles that are Peruvian originating goods or that are Trans-Pacific Partnership originating goods, to align the rates for these goods with those in Schedule 3. The associated concessional rate of duty provided for these goods by item 37 of Schedule 4 to the Customs Tariff Act are also repealed;

·                insert new notes and subheadings in Schedule 3 to separately identify formulated caffeinated beverages, formulated supplementary sports foods and formulated supplementary foods, as these terms are defined in the Australia New Zealand Food Standards Code made under the Food Standards Australia New Zealand Act 1991 . These amendments improve the monitoring of these goods as part of the Imported Food Inspection Scheme;

·                insert new notes in Schedule 3 to: (a) to specifically identify vitamins and food supplements; (b) provide that wheelie bins do not fall within the classification of vehicles; and (c) provide that plates, rods, angles, shapes, sections, tubes, pipes and the like requiring further modification prior to being used cannot be classified as parts; in line with Australia’s tariff classification practice, and with international practice, as determined by the World Customs Organization; and

·                repeal redundant provisions specifying phasing rates of customs duty under the free trade agreements with Chile, the United States of America, the Association of South East Asian Nations and New Zealand, Malaysia, Korea, Japan and China and other associated related provisions.

 

Human rights implications

 

This Bill engages the following human rights:

·                the right to enjoyment of the highest attainable standard of physical and mental health in Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)

·                the right to life in Article 6 of the International Covenant on Civil and Political Rights (ICCPR)

 

The right to enjoyment of the highest attainable standard of physical and mental health

 

Providing a ‘Free’ rate of customs duty for imported medical products or hygiene products, capable of use in combating COVID-19 virus promotes the right to enjoyment of the highest attainable standard of physical and mental health under Article 12 of ICESCR. This Article requires that States Parties take steps to achieve the full realisation of this right, including those necessary for the prevention, treatment and control of epidemics.

 

The amendment will promote the right by facilitating essential products that prevent the spread of the COVID-19 virus to be imported into Australia at a lower cost. Together with such products manufactured in Australia, the amendment will facilitate greater access of such products to people in Australia.

 

The right to life

 

This amendment also promotes the right to life in Article 6(1) of the ICCPR; specifically, the responsibility that a States Party has to take appropriate steps to protect the right to life.

 

The right to life includes a duty on governments to take appropriate steps to protect the right to life of those within its jurisdiction.

 

This amendment facilitates access to medical products or hygiene products imported into Australia at a lower cost. This promotes the right to life as the resulting availability a lower cost of these essential goods for use in Australia will significantly lower the risk and potential harm to life posed by COVID-19 in the Australian community.

 

Conclusion

 

This Bill is compatible with human rights because it promotes human rights, in particular, the rights in Article 12 of the ICESCR and Article 6(1) of the ICCPR for people in Australia.