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2002-2003-2004
(Circulated
by authority of the
Minister for Justice and Customs,
Senator
the Honourable Christopher Martin Ellison)
CUSTOMS TARIFF AMENDMENT (OIL, GAS AND OTHER MEASURES) BILL
2004
The purpose of this Bill is to amend the Customs Tariff Act 1995
(the Tariff) to:
• amend item 22 of Schedule 4, relating to goods
for use in oil and gas exploration to reflect changes in technology and to
extend the coverage of the item;
• amend the country codes for
Poland and Wake Island to reflect the codes used by the International
Organization for Standardization; and
• amend Additional Note 3(a)
to Chapter 22 (relating to grape wine) to insert an upper limit for alcohol
content.
FINANCIAL IMPACT STATEMENT
It is estimated,
on the basis of current imports, that the proposed amendment to item 22 will
cost the Government approximately $220,000 per annum in duty forgone. However,
actual duty forgone will depend on the level of activity in the oil and gas
exploration industries.
The financial impact of the proposed amendment to
Additional Note 3(a) to Chapter 22 is difficult to quantify, but it is expected
that it might result in a small increase in Government revenue.
The
other proposed amendments have no financial
implications.
Clause 1 – Short Title
This clause provides for the
Act, when enacted, to be cited as the “Customs Tariff Amendment (Oil,
Gas and Other Measures) Act 2004”.
Clause 2 –
Commencement
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.
Item 2 of
the table provides that Schedule 1 will commence on 18 October 2003. The
amendment in Schedule 1 was contained in Customs Tariff Proposal No. 6 (2003)
which took effect from 18 October 2003.
The Customs Tariff Proposal
mechanism is used for effecting alterations to the Customs Tariff, particularly
when such alterations are required to have effect in a short time frame that
cannot be achieved through a Customs Tariff Amendment Bill. Customs Tariff
Proposals are used most commonly for introducing new items, for changing rates
of duty and for restructuring items in the Schedules to the Customs Tariff.
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. Such Bills necessarily have the same date of effect as the original
Proposal.
Item 3 of the table provides that Schedule 2 will commence
14 days after the Act receives the Royal Assent.
Item 4 of the table
provides that Schedule 3 commences immediately after the commencement of item 13
of Schedule 2 to the Customs Tariff Amendment Act (No. 1) 2003
that is 1 July 2003. This Schedule contains technical amendments to the
abbreviations for two countries in Part 4 of Schedule 1 to the Tariff.
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.
Schedule 1 – Amendment
of the Customs Tariff Act 1995 having effect on and from 18 October
2003
Item 1 substitutes item 22 in Part II of Schedule 4 to the Tariff. Item
22 allows for the duty-free entry of goods, prescribed by by-law, for use in the
exploration for oil or natural gas, or in the development of oil or natural gas
wells. Currently, item 22 allows for the duty-free entry of goods, as
prescribed by by-law:
• that are for use in connection with the
exploration for petroleum or natural gas; or
• that are for use in
connection with the development of petroleum or natural gas wells to the stage
where a well-head assembly is attached, other than goods for, or for use in
connection with, controlling, treating, conveying or storing petroleum or
natural gas after leaving the well-head assembly,
other than goods in
respect of which substitutable goods are produced in Australia or are capable of
being produced in Australia by any person in the ordinary course of
business.
New item 22 will accommodate changes in technology and will
extend the coverage of the item to include the process of re-entering an
existing well, extending the well into a new oil or gas zone, and workovers for
the maintenance of the well. This will be specified in the by-law made under
the new item 22.
This amendment incorporates, in the Tariff, alterations
previously contained in Customs Tariff Proposal No. 6 (2003). This Proposal was
introduced in Parliament on 16 October 2003 and took effect from 18 October
2003.
Item 1 – Paragraph (a) of Additional Note 3 to Chapter 22 of
Schedule 3
Item 1 amends Additional Note 3(a) to Chapter 22 in Schedule 3 of the Tariff
by inserting a 22% upper limit on alcohol content of grape wine defined by the
Note.
This Note was inserted into the Tariff on 1 July 2000. Under
the Excise Tariff Act 1921, wine, as defined in Subdivision 31-A of
the A New Tax System (Wine Equalisation Tax) Act 1999 (the WET Act), is
not excisable. Any locally manufactured wine that does not fall into that
definition is excisable. In July 2000, regulation 31-2.01 was inserted into the
WET Regulations so that wine for the purposes of Subdivision 31-A of the WET Act
must contain less than 22% by volume of ethyl alcohol. Hence, wine with more
than 22% by volume of ethyl alcohol that is manufactured in Australia is
excisable.
However, due to the Note in the Tariff,
imported wine with more than 22% by volume of ethyl alcohol is not subject to a
rate of customs duty that is the same as the excise rate for locally
manufactured wine. This amendment will ensure that imported wine of fresh
grapes, that does not comply with the revised Additional Note, will attract the
same rate.
Schedule 3 – Amendment of the Customs Tariff Act
1995 having effect immediately after the commencement of Schedule 2 to the
Customs Tariff Amendment Act (No.1) 2003
Item 1 –
Division 1 of Part 4 of Schedule 1 (table item dealing with Poland,
column 2)
This item amends the country code abbreviation for
Poland, specified in Division 1 of Part 4 of Schedule 1 to the Customs
Tariff. The amendment aligns this code with that used by the International
Organization for Standardization, in this case “PL”.
This
amendment does not effect the Customs duty applicable to goods imported from
Poland or the margins of tariff preference accorded Poland.
Item 2
– Division 2 of Part 4 of Schedule 1 (table item dealing with Wake Island,
column 2)
This item amends the country code abbreviation for
Wake Island, specified in Division 2 of Part 4 of Schedule 1 to the Customs
Tariff. The amendment aligns this code with that used by of the International
Organization for Standardization, in this case “XC”.
This
amendment does not effect Customs duty applicable to goods imported from Wake
Island or the margins of tariff preference accorded Wake Island.