Bills Digest no. 64 2009–10
Customs Tariff Amendment (Incorporation of Proposals) Bill 2009
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: 22 October 2009
House: House of Representatives
Portfolio: Home Affairs
Commencement: Sections 1 to 3 commence on the day of Royal Assent,
Schedule 1 commences on 1 January 2009, Schedule 2 on 6 March 2009 and Schedule
3 on 28 August 2009.
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 (the Act) to incorporate
- an additional item into Schedule 4 of the Act concerning
concessional rates of duty (Customs Tariff Proposal No. 1) 2009 (motor vehicle
manufacture),
- increased rates of tariff incorporated into Schedule 7 (Chilean
originating goods) contained in the Customs Tariff Proposals (No. 2) 2009 (Alcopops
and tobacco-Chilean goods)
- amendments to rates of duty contained in Customs Tariff Proposals
(No. 4) 2009 (beer and wine).
Alterations proposed to the Customs Tariff Act 1995 and the Excise Tariff Act 1921 are done by means of excise and customs
tariff proposals which are introduced and tabled in Parliament.
The Australian House Practice explains that changes to
customs and excise tariffs require a mechanism whereby changes to the tariffs
can be applied quickly. To initiate changes by means of introducing a bill into
Parliament would be impractical because of the time processes involved in
passing a bill through Parliament. ‘Such measures (proposals) are generally
introduced by way of motion in the form of customs tariff and excise tariff
proposals. These, as proposals dealing with taxation may be submitted to the
House without notice.’[1] The collection of duty commences as the House Practice states, on the authority
of an unresolved motion, and this has been accepted as a convention.[2]
The Bill validating the imposition of the tariff changes
retrospectively apply the changes to the date that the tariff changes commenced
by means of the Customs Tariff Proposal. There has been some controversy
relating to the arrangements of tabling tariff proposals to be later validated
by legislation which is subsequently rejected and requires a return of the
funds collected.
The Customs Tariff Proposal (No. 1) 2008 (alcopops) and the
Excise Tariff Proposal (No. 1) 2008 (alcopops) were tabled on 13 May 2008. The
validating legislation was introduced in February 2009 but was subsequently
rejected in the Senate. For a detailed coverage of the background to these and
the subsequent Bills which ultimately passed see the following:
Customs
Tariff Amendment (2009 Measures No. 1) Bill 2009
Excise
Tariff Amendment (2009 Measures No. 1) Bill – bills digest[3]
Customs
Tariff Amendment (2009 Measures No. 1) Bill [No. 2]
Excise
Tariff Amendment (2009 Measures No. 1) Bill [No. 2] – bills digest[4]
Customs
Tariff Validation Bill 2009
Excise
Tariff Validation Bill 2009– bills digest[5]
Chronology
For a chronology of the customs and excise tariff proposals
and validating legislation see attached appendix.
The Bill has been examined by the Senate Scrutiny of Bills
Committee and the Committee commented in the Alert Digest on the retrospective
commencement provisions. They stated that items 2, 3 and 4 of the commencement
table have retrospective commencement provisions. The Committee as a matter of
practice ‘draws attention to a bill that seeks to have a retrospective impact
and will comment adversely where such a bill has a detrimental effect on
people.’[6] However in the case of this Bill, the Committee commented on the clear
explanation provided by the Explanatory Memorandum of the process employed in
altering the Customs Tariff Act 1995. It explained that because of the
short timeframe for effecting changes to the Act, Customs Tariff Proposals are
used to effect such changes quickly which cannot be done through a Customs
Tariff Amendment Bill.
The explanatory memorandum also explains that the
commencement provisions reflect those of the relevant Customs Tariff Proposal
and, since there is a time lag between the tabling of a Proposal in the House
of Representatives and the passage of the associated bill through the
Parliament, the commencement provisions of the bill are necessarily
retrospective.
The Committee had no further comment to make on the bill.
The Bill proposes to incorporate the changes contained in
Customs Tariff Proposals (No. 1) 2009 (goods for motor vehicle manufacture), Customs
Tariff Proposal (No. 2) (alcopops and tobacco-Chilean goods) and Customs Tariff
Proposal (No. 4) (beer and wine). The majority of the changes proposed in
Schedules 2 and 3 of the Bill concern amendments to the Classification of
goods and general and special rates of duty and Chilean originating
goods.
The Explanatory Memorandum explains
that the Customs Tariff Amendment (Australia-Chile Free Trade Agreement
Implementation) Act 2008 was assented to on 27 November 2008 and commenced
on 6 March 2009. The passing of that legislation implemented Australia’s tariff
commitments under the Australian-Chile Free Trade Agreement.[7]
The Explanatory Memorandum
states that the measures in the Bill have no financial impact.[8]
Schedule
1—Customs Tariff Proposal (No. 1) 2009
Item 1 incorporates a new item 41H into
Schedule 4 of the Customs Tariff Act 1995 (proposed in Customs Tariff Proposal
(No. 1)). Schedule 4 relates to concessional rates of duty and this change will
provide for a concessional rate to apply to goods used in motor vehicle design
or engineering relating to testing, quality control, manufacturing evaluation
or engineering development.
Items 1 to 53 increase the rates of duty in
accordance with Customs Tariff Proposal (No. 2) which implements increases in
rates of duty as a result of movements in the February 2009 Consumer Price
Index. The Explanatory Memorandum states that these increased rates apply to ‘increased
rates of excise equivalent customs duty applicable to certain spirit-based
alcoholic beverages, also known as ‘ready-to-drink’ beverages or ‘alcopops.’’ These
changes also ensure that the customs duty on alcohol and tobacco products imported
from Chile are in line with duty imposed on these types of products from other
countries. The Customs Tariff Amendment (2009 Measures No. 1) Act 2009 which
received Royal Assent on 27 August 2009, allowed the higher rates of duty to be
incorporated in the Customs Tariff Act 1995.
Customs Tariff Proposal (No. 4) proposes the following changes
to the Customs Tariff Act 1995:
- Schedule 3–Classification of goods and general and special rates
of duty items 1-8,
- Schedule 5–US originating goods items 9-16,
- Schedule 6–Thai originating goods items 16-24, and
- Schedule 7–Chilean originating goods items 25-32.
The Explanatory Memorandum states that the Government
announced in the 2009-10 Budget that ‘it would alter the taxation definitions
of beer and grape wine product to ensure that these goods that mimic spirit
based products are taxed as a spirit product.[9]
Movements in the CPI in relation to these products rose in
the June quarter. These increases took effect as from 1 August 2009. At that
point the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 was still
being debated in Parliament.[10] This Bill now proposes to amend the Customs Tariff Act 1995 in relation
to those increases.
2008
Customs Tariff Proposal (No. 1 alcopops) 2008
Excise Tariff Proposal (No. 1 alcopops) 2008 Tabled on 13/5/08.
2009
Customs Tariff Proposal (No. 1 motor vehicle goods) Tabled 11/2/09
Customs Tariff Proposal (No. 2 alcopops –Chilean goods Feb09
CPI) Tabled 25/2/09
Customs Tariff Proposal (No. 3 alcopops- June09 CPI) Tabled 12/5/09
Excise Tariff Proposal (No. 1 alcopops) Tabled 12/5/09
Customs Tariff Proposal (No. 4 definitions of beer and grape
wine product ) Tabled 16/9/09
Customs Tariff Amendment (2009 Measures No. 1) Bill 2009
Excise Tariff Amendment (2009 Measures No. 1) Bill 2009
House of Representatives Introduced 11/2/09 Passed
25/2/09
Senate Introduced
11/3/09 Negatived at 3rd reading
Rejected by the
Senate 18/3/09
Customs Tariff Validation Bill 2009
This Bill proposed the validation of customs duties demanded
or collected before 14 May 2009 to ensure that the duties were lawfully imposed
and collected.
House of
Representatives Introduced 12/5/09 Passed 12/5/09
Senate Introduced
12/5/09 Passed 13/5/09
Assent
13/5/09 Act No. 29 2009
Customs Tariff Amendment (2009 Measures No. 1) Bill 2009
(No. 2)
Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 (No.
2)
House of
Representatives Introduced 22/6/09 Passed 22/6/09
Senate Introduced 23/6/09 Passed
13/8/09
Assent
27/8/09 Act No. 74 2009 (Customs Tariff)
Assent 27/8/09 Act
No. 73 2009 (Excise Tariff)
Members, Senators and
Parliamentary staff can obtain further information from the Parliamentary
Library on (02) 6277 2784.
Moira Coombs
17 November 2009
Bills Digest Service
Parliamentary Library
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