Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)Chapter 1 - Indexation of rates of duty
EXCISE TARIFF AMENDMENT BILL (No. 2) 2001
Outline of chapter
1.1 This chapter explains amendments to the indexation provisions of the Excise Tariff Act 1921 (Excise Tariff Act) that restrict the application of the provisions.
1.2 Item 1 of Schedule 1 to this Bill alters section 6A of the Excise Tariff Act.
Context of reform
1.3 The abolition of indexation of excise duty for all petroleum fuels was announced by the Prime Minister on 1 March 2001 as part of a package of cuts to petrol and diesel fuel excise. Alteration to the Excise Tariff Act will give effect to this decision.
Summary of new law
1.4 Section 6A of the Excise Tariff Act will be amended to remove certain petroleum products from the indexation provisions.
Comparison of key features of new law and current law
| New law | Current law |
|---|---|
| Subsection 6A(1A) is inserted to exclude petroleum products classified to items 11 and 12 of the Schedule to the Excise Tariff Act from the indexation provisions (section 6A). | The indexation provisions (section 6A) include petroleum products classified to items 11 and 12 of the Schedule to the Excise Tariff Act. |
Detailed explanation of new law
1.5 Automatic indexation of rates of excise duty is provided for in section 6A of the Excise Tariff Act. It applies, with certain minor exceptions, to all excisable alcohol, tobacco and refined petroleum products that attract a duty rate other than free.
1.6 Section 6A of the Excise Tariff Act will be amended by inserting a new subsection 6A(1A) to exclude all petroleum products classified to items 11 and 12 of the Schedule to the Excise Tariff Act from the application of the provisions, for the indexation period commencing on 1 August 2001 and any subsequent indexation period.
CUSTOMS TARIFF AMENDMENT BILL (No. 3) 2001
Outline of chapter
1.7 This chapter explains amendments to the Customs Tariff Act 1995 (Customs Tariff Act) that will delete certain excise equivalent imported petroleum fuels from the indexation provisions of the Customs Tariff Act.
1.8 Item 1 of Schedule 1 to this Bill inserts an amended table in subsection 19(1) of the Customs Tariff Act.
Context of reform
1.9 The abolition of indexation of customs duty for all petroleum fuels was announced by the Prime Minister on 1 March 2001 as part of a package of cuts to petrol and diesel fuel excise. Alteration to the Customs Tariff Act will give effect to this decision.
Summary of new law
1.10 The Customs Tariff Act will be amended by repealing and replacing the table in subsection 19(1), thereby removing certain petroleum products from indexation on or after 1 August 2001.
Comparison of key features of new law and current law
| New law | Current law |
|---|---|
| The table in section 19 of the Customs Tariff Act is amended to delete imported petroleum products equivalent to those classified to item 11 of the Schedule to the Excise Tariff Act for the purposes of indexation of duty rates. | The table in section 19 of the Customs Tariff Act includes imported petroleum products equivalent to those classified to item 11 of the Schedule to the Excise Tariff Act for the purposes of indexation of duty rates. |
Detailed explanation of new law
1.11 The table in subsection 19(1) of the Customs Tariff Act contains Customs Tariff subheadings that are paired to equivalent Excise Tariff items for the purposes of indexation of rates of customs duty in line with excise rates of duty under the provisions of section 6A of the Excise Tariff Act.
1.12 The table will be repealed and reinserted without the paired Customs Tariff subheadings and Excise Tariff items for petroleum products, with the result that the customs duty on these products will no longer be subject to indexation on or after 1 August 2001.
Application and transitional provisions
1.13 These amendments will apply in respect of indexation that occurs on or after 1 August 2001.