Bills Digest no. 57 2008–09
Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation)
Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
Passage history
Date introduced:
16 October 2008
House:
Representatives
Portfolio:
Home Affairs
Commencement:
Sections 1 to 3 on Royal Assent, Schedule 1 on 1
January 2009 or when the Australia-Chile Free Trade Agreement comes into
force, whichever is the later date. The Minister must announce by notice
in the Gazette the day on which the Agreement comes into force for Australia.
If the Agreement does not come into force in Australia the Bill does not
commence at all.
Links:
The relevant
links to the Bill, Explanatory Memorandum and second reading speech
can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/. When Bills
have been passed they can be found at ComLaw, which is at http://www.comlaw.gov.au/.
To amend the Customs Tariff Act
1995 to implement the Australia-Chile Free Trade Agreement to provide
for Free rates and preferential rates of customs duty on Chilean originating
goods.
This Bill together with Customs Amendment (Australia-Chile
Free Trade Agreement Implementation) Bill 2008 will amend the Customs
Act 1901 and the Customs Tariff Act 1995 to implement
the provisions of the Australia-Chile Free Trade Agreement. The former
Bill will amend the Customs Act 1901 to insert a new Division 1F
of Part VIII to define the new rules of origin for Chilean originating
goods. This Bill proposes amendments to the Customs Tariff Act 1995
to provide for Free rates and preferential rates of customs duty.
Detailed background information to this Customs Bill
can be found in the Bills
Digest to the Customs Amendment (Australia-Chile Free Trade Agreement
Implementation) Bill 2008.[1]
The Explanatory Memorandum indicates that the customs
duty forgone as a result of implementing the Agreement will be approximately:
- 2008-09 $1.9 million
- 2009-2012 between $4 million and $4.5 million per year.
Schedule
1 – Amendments to the Customs Tariff Act 1995
Item 6 inserts proposed section 13D to provide
that Chilean originating goods for the purposes of the Customs Tariff
Act 1995 are goods under Division 1F of Part VIII of the Customs
Act 1901 where the nature of Chilean originating goods is defined.
Section 16 of the Customs Tariff Act 1995 is concerned
with the calculation of duty. Item 9, proposed paragraph 16(1)(m)
provides that if goods are Chilean originating goods and they can be classified
to a heading or subheading in Schedule 3 to be found in column 2 in Schedule
7–Chilean originating goods then the rate of duty payable is determined
from column 3 in the Schedule 7 table in relation to that classification.
Subparagraph 16(1)(m)(ii) provides that all other Chilean
originating goods are free.
Chile is listed as a developing country under Division
1 of Part 4 of Schedule 1 of the Customs Tariff Act 1995.
Item 10, proposed subsection 16(4) provides that the duty to be
applied to Chilean originating goods will be under paragraph 16(1)(m)
and not paragraph 16(1)(g) as applied previously. In other words the rate
of duty applicable to Chilean originating goods applies and not the developing
country rate.
Item 14 amends existing subsection 18(2) and inserts
proposed paragraph 18(2)(m) which provides that if goods are
Chilean originating goods and the goods are subject to a concessional
rate of duty, then the rate of duty specified in Schedule 4 for that concessional
item will apply. If there is no rate specified, then it is Free. Item
15 repeals subsections 18(3) and (4) and replaces them with proposed
subsection 18(3). Section 18 of the Customs Tariff Act 1995
deals with the calculation of concessional duty rates. Proposed
subsection 18(3) provides that where concessional rates of duty apply
to a developing country under paragraph 18(2)(g) and another paragraph
of section 18(2) also applies in relation to working out the duty for
those goods then the other paragraph applies and not section 18(2)(g).
An example is provided to illustrate how the subsection operates. The
Explanatory Memorandum states that proposed “subsection 18(3) clarifies
and extends the application of previous subsections 18(3) and (4) to all
Developing Countries, including Chile and Thailand, with which Australia
has a free trade agreement.”[2]
Schedule 3 of the Customs Tariff Act 1995 sets
out the classification of goods and the general and special rates of duty
applicable to goods imported into Australia. Schedule 3 states that the
text in the schedule is based on the wording in the Harmonized Commodity
Description and Coding System that is referred to in the International
Convention on the Harmonized Commodity Description and Coding System done
at Brussels on 14 June 1983.[3]
Below is an extract from Schedule 3 giving an example
of the classification numbers of the Harmonized System. The classification
numbers contained in the Proposed Schedule 7 refer to the classification
numbers set out in Schedule 3.
Customs Tariff Act 1995
Schedule 3 Classification of goods and general and special
rates of duty
Section XI Textiles and textile articles
Chapter 60 Knitted or crocheted fabrics
6003 KNITTED OR CROCHETED FABRICS OF A WIDTH
NOT EXCEEDING 30 cm, OTHER THAN THOSE OF
6001 OR 6002:
| 6003.10.00 -Of wool or fine animal hair
|
|
10%
DC:5% |
| |
From 1 January 2005 |
7.5%
DC:2.5%
|
| |
From 1 January 2010 |
5%
10%
DC:5% |
| 6003.20.00 -Of cotton |
|
|
| |
From 1 January 2005 |
7.5%
DC:2.5% |
| |
From 1 January 2010 |
5% |
Item 33 is the most substantive part of the Bill.
It inserts new Schedule 7 – Chilean originating goods and
incorporates the table of tariffs applicable to Chilean originating goods.
The Schedule consists of Column 1 containing item numbers, Column 2 indicates
the classification number in relation to the harmonized system, that is
the heading and subheading of Schedule 3 in the Customs Tariff Act
1995. Column 3 sets out the rate of duty that will apply currently
and the rates that will apply up to 2015. The Explanatory Memorandum provides
explanations of the phasing rates of customs duty in Schedule 7 in relation
to Chilean originating goods. In relation to the items referring to alcohol,
tobacco and petroleum the Explanatory Memorandum states the following:
52. Items 3 to 119 of Schedule 7 impose customs duty
on the alcohol, tobacco and petroleum products that are Chilean originating
goods, at a rate that is equivalent to the excise duty imposed under
the Excise Tariff Act 1921, on the same goods when domestically
produced.
53. Customs Tariff Proposal (No. 1) 2008, tabled in
the House of Representatives on 13 May 2008, contained alterations
to the Customs Tariff to increase rates of customs duty for those tariff
subheadings applicable to certain spirit based beverages with an alcohol
content of less than 10%. These goods are commonly referred to as “alcopops”.
The tariff subheadings affected are: 2203.00.31, 2204.10.23, 2204.10.83,
2204.21.30, 2204.29.30, 2205.10.30, 2205.90.30, 2206.00.52, 2206.00.62,
2206.00.92 and 2208.90.20.[4]
Moria Coombs
11 November 2008
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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