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2008 - 2009 - 2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS TARIFF AMENDMENT Bill (No. 1) 2010
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Home Affairs
the Honourable Brendan O'Connor MP)
CUSTOMS TARIFF AMENDMENT Bill (No. 1) 2010
OUTLINE
The purpose of the Customs Tariff Amendment Bill (No. 1) 2010 (the Bill) is
to amend the Customs Tariff Act 1995 (the Customs Tariff) to incorporate
end-dates for three concessional items in Schedule 4.
These amendments provide:
. an end-date of 31 December 2009 for item 53C. This item provided a
mechanism to reduce the general rate of customs duty from 10% to 5%
for certain goods that were not of a kind used as components in
passenger motor vehicles. Item 53C became redundant from 1 January
2010.
. an end-date of 30 June 2010 for item 61. Item 61 provides the means
for duty concessions under the Expanded Overseas Assembly Provisions
Scheme (EOAP). The continuation of the EOAP beyond June 2010 is not a
component of the Government's Textile, Clothing and Footwear (TCF)
Innovation Package, as announced in the 2009/10 Budget, necessitating
the end-dating of item 61.
. an amendment of the end-date of item 73, from 30 June 2017 to 30 June
2011. The Product Diversification Scheme (PDS) for certain clothing
and finished textiles allows importers to earn duty credits through
additional production of eligible nominated TCF goods and then to
apply those credits, through item 73, to offset duty payable on
qualifying imported finished clothing or textile articles. While
importers will no longer be able to earn duty credits under the PDS
after 30 June 2010, the end-date of 30 June 2011 for item 73 will
provide importers with an additional twelve months to use those
credits.
FINANCIAL IMPACT STATEMENT
The amendment of item 53C has no revenue implications.
It is estimated that the continued operation of the EOAP, through item 61,
would result in revenue foregone in 2009/2010 of approximately $3 million,
through reduced customs duties. However, this figure would be affected by
the reduction of duty rates for TCF goods that occurred on 1 January 2010.
The cessation of item 61 will generate additional revenue from Customs duty
but it is difficult to quantify because of the phasing down of duty rates
for TCF goods on 1 January 2010. In 2008/2009, approximately $3 million
dollars revenue from Customs duty was foregone through the Scheme.
The cessation of item 73 in 2011 rather than 2017 will generate additional
revenue from Customs duty of $5 million per annum. However, this money
will be made available as grants through the proposed Clothing and
Household Textile Building Innovative Capability Scheme, so the earlier
cessation of item 73 is revenue neutral.
CUSTOMS TARIFF AMENDMENT Bill (No. 1) 2010
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides for the Bill, when enacted, to be cited as the Customs
Tariff Amendment Act (No. 1) 2010.
Clause 2 - Commencement
1. 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.
2. Item 1 of the table in this clause provides 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.
3. Item 2 of the table provides that item 1 of Schedule 1 of the Bill
commences on 14 December 2009.
4. Item 3 of the table provides that items 2 and 3 of Schedule 1 of the
Bill commence on the day on which this Act receives the Royal Assent.
Clause 3 - Schedule(s)
5. This clause is the formal enabling provision for the Schedule to the
Bill and provides that each Act specified in a Schedule is amended or
repealed in accordance with the applicable items in the Schedule. In the
Bill, the Customs Tariff Act 1995 is being amended.
6. Clause 3 also provides that any 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.
CUSTOMS TARIFF AMENDMENT Bill (No. 1) 2010
Introductory comments
7. Schedule 4 to the Customs Tariff Act 1995 (the Customs Tariff) provides
concessional rates of customs duty for a range of imported goods and
classes of goods, in specified circumstances. Schedule 4 allows the
reduction or duty free entry of such goods that otherwise would be
subject to customs duty.
8. The approximately 100 items in Schedule 4 give effect to a range of
Government policies and programs designed to provide assistance or
concessions to Australian industries and other groups.
9. The amendments in the Customs Tariff Amendment Bill (No. 1) 2010 insert
end-dates for three items in Schedule 4 that are no longer required for
the purpose for which these items were created.
Schedule 1 - Amendments
Customs Tariff Act 1995
Item 1
Schedule 4 (item 53C, the description of goods in column 2)
10. Item 1 of the Bill inserts an end-date of 31 December 2009 into the
text of item 53C in Schedule 4.
11. Item 53C in Part III of Schedule 4 provided a mechanism to reduce the
general rate of customs duty from 10% to 5% for certain goods entered for
home consumption on or after 1 January 2005. These goods are non-
passenger motor vehicle (PMV) goods that are classified to the same
tariff classifications as PMV parts and components (for example, a spring
used in a watch may be classified to the same subheading as a similar
spring used in a PMV). Prior to 1 January 2010, such non-PMV goods would
have attracted a 10% rate of duty but for the operation of item 53C.
12. On 1 January 2010, the general rate of customs duty of 10% on passenger
motor vehicles and their parts and components fell to 5%, in accordance
with previous legislation. Consequently, item 53C became redundant from
that date. This Bill therefore inserts an end-date of 31 December 2009
into the text of the item.
13. The insertion of the 31 December 2009 end-date into item 53C was
previously given effect through the publication of Customs Notice (No. 3)
2009 in Special Commonwealth Gazette S213 of 14 December 2009, under the
provisions of section 273EA of the Customs
Act 1901.
14. Customs Notice (No. 3) 2009 took effect from the date of publication of
that Gazette, that is 14 December 2009.
15. Section 273EA of the Customs Act 1901 requires the tabling of a Customs
Tariff Proposal in the Parliament within seven sitting days of the
publication of the Notice. That requirement was met by the tabling of
Customs Tariff Proposal (No. 1) 2010 in the Parliament on 4 February
2010.
16. Following the introduction of a Customs Tariff Proposal in the House of
Representatives, the alterations contained in the Proposal are
incorporated in a Customs Tariff Amendment Bill that is introduced into
and debated by the Parliament.
17. When a Customs Tariff Proposal is incorporated in a Customs Tariff
Amendment Bill, the commencement provisions of the Bill reflect those of
the Proposal. In turn, the commencement provisions of the Proposal
reflect those of the original Notice, in this case 14 December 2009. As
there is a time lag between the tabling of a Proposal in the House of
Representatives and the passage of a Bill incorporating the Proposal
through the Parliament, the commencement provisions relating to item 53C
are necessarily retrospective.
Item 2
Schedule 4 (item 61, at the end of the description of goods in column 2)
18. Item 2 of the Bill inserts an end-date of 30 June 2010 into the text of
item 61 of Schedule 4. Item 61 will only apply in respect of eligible
goods that are entered for home consumption on or before 30 June 2010.
19. Item 61 provides the means for duty concessions for goods imported
under the Expanded Overseas Assembly Provisions Scheme (EOAP).
20. The EOAP was introduced in 1999. The EOAP provides duty concessions
for certain TCF goods that are manufactured overseas from Australian
fabric and are subsequently imported back to Australia.
21. An expanded EOAP was announced in November 2003 as part of the former
Government's TCF Post-2005 Assistance Package. The continuation of the
EOAP beyond 30 June 2010 is not a component of the Government's TCF
Innovation Package, as announced in the 2009/10 Budget thus necessitating
this amendment.
22. The amendment contained in item 2 in this Bill provides that goods that
are potentially eligible for the item 61 concession must be entered for
home consumption, on or before
30 June 2010.
Item 3
Schedule 4 (item 73, the description of goods in column 2)
23. Item 3 of the Bill amends the end-date of item 73 of Schedule 4 to the
Customs Tariff, from 30 June 2017 to 30 June 2011.
24. The Product Diversification Scheme (PDS) for certain clothing and
finished textiles allows producers to earn duty credits through
additional production of eligible nominated TCF goods and then to apply
those credits, through item 73, to offset duty payable on qualifying
imported finished clothing or textile articles.
25. The PDS provides duty concessions, up to a total of $5 million per
annum, for qualifying TCF goods. The PDS is currently legislated to
cease on 30 June 2017.
26. The PDS is part of the Government's TCF Post-2005 Assistance Package
that was announced in November 2003.
27. The earlier cessation of the PDS will implement a component of the
Government's TCF Innovation Package, as announced in the 2009/10 Budget.
This Package will provide assistance to the TCF industry through grants,
rather than through a combination of grants and duty concessions.
28. The amendment to item 73 will vary the existing end-date from 30 June
2017 to
30 June 2011. While importers will no longer be able to earn duty
credits under the PDS after 30 June 2010, the end-date of 30 June 2011
for item 73 will provide importers with an additional twelve months to
use those credits.