SUMMARY OF ALTERATIONS

CUSTOMS TARIFF PROPOSAL (No. 1) 2024

Reasons for changes: To repeal the rates of duty for certain tariff classifications and replace with a ‘Free’ rate of duty.

Date of effect: 1 July 2024

Alterations to the Customs Tariff Act 1995

This Proposal advises of alterations to reduce to ‘Free’ the general rate of customs duty and any applicable preferential rates of customs duty applied to 457 tariff headings and subheadings.

Where goods are not the produce or manufacture of a Preference Country and are not originating goods within the meaning of Part VIII of the Customs Act 1901, the applicable customs duty is worked out by reference to the general rate of customs duty in the third column of the tariff heading or subheading to which the goods are classified in Schedule 3 of the Customs Tariff Act 1995 (Customs Tariff Act). The general rate is the rate of customs duty, other than the rate that applies in relation to a Preference Country, being Papua New Guinea, a Forum Island Country, a Least Developed Country, a Developing Country, Canada or Singapore. Certain goods classified in Schedule 3 of the Customs Tariff Act may be subject to a general rate of up to 5 per cent.

Goods may be subject to a preferential or concessional rate of customs duty that is less than the general rate where they are the produce or manufacture of a Preference Country, are originating under a free trade agreement and Part VIII of the Customs Act, or meet the conditions of an item in Schedule 4 to the Customs Tariff Act. Therefore, there are a number of tariff headings and subheadings that despite having a general rate of duty of 5 per cent in Schedule 3, the near universal use of available concessional or preferential rates of customs duty results in only a small proportion of goods classified to these headings and subheadings being subject to the general rate of duty.

The table in item 1 of Schedule 1 lists tariff headings and subheadings for which the rates of duty in Schedule 3 will be repealed and replaced with a general rate of duty of ‘Free’.

To ensure that preferential rates of customs duty are not greater than the general rate of duty, items 2 to 180 alter the rates of duty for tariff headings and subheadings listed in the table at item 1 that are also included in the table at Schedule 14 of the Customs Tariff Act. Schedule 14 provides the preferential rates of customs duty applicable to goods that are RCEP originating under the Regional Comprehensive Economic Partnership (RCEP) Agreement and within the meaning of Division 1N of Part VIII of the Customs Act. Aside from Schedule 3, Schedule 14 is the only schedule to the Customs Tariff Act in which the preferential customs duty rates have not already been incrementally reduced to ‘Free’ in respect of some of the 457 tariff headings and subheadings affected by this measure. The alterations proposed by these table items preserves the phasing down of duty rates that has occurred prior to 1 July 2024 and applies a duty rate of ‘Free’ from 1 July 2024.

The amendments were first made by Notice of Intention to Propose Customs Tariff Alteration2024. The amendments apply from 1 July 2024.