House of Representatives

Explanatory Memorandum

(Circulated by the Authority of the Minister for Industry, Science and Technology Senator the Honourable Peter Cook)

GENERAL OUTLINE

This Bill proposes the introduction of a new Customs Tariff based on the Harmonized Commodity Description and Coding System (HCDCS) which is the international tariff system sponsored by the World Customs Organization (WCO) in Brussels. Australia has been a signatory to the HCDCS since 1987. The Customs Tariff Act 1987, which is repealed by this Bill, was also based on the HCDCS.

The Bill comprises 23 sections and 4 Schedules.

Many of the sections contained in the Customs Tariff Act 1987 have been redrafted to ensure greater clarity or to incorporate ad hoc changes made since 1987 in a more logical sequence. The sections have also been renumbered. The changes to the previous provisions contained in the 23 sections are of an administrative nature and their intent has not been altered by these amendments.

Schedule 1

Classes of countries and places in relation to which preferential rates of duty apply

This Schedule lists those countries and places which, for the purposes of the Bill, are Forum Island Countries or Developing Countries and Places treated as Developing Countries. The changes made in this Bill are to categorise countries which are eligible for similar preferential rates of duty in like groups.

Schedule 2

Rules for the Interpretation of Schedule 3

These internationally applicable rules are used to determine the tariff classification of goods within Schedule 3.

Schedule 3

This is the Schedule used to determine the classification and rates of duty applicable to imported goods. The systematic structure of the Schedule follows that of the HCDCS done at Brussels in 1983. The first six figures of any classification are taken from the international system with the seventh and eighth figures inserted by Australia. This provides for a separate structure for goods within the same tariff groupings; by this means Australia is able to impose different rates of duty for domestic purposes.

The main amendments are the incorporation of approximately 350 classification changes agreed by signatory countries to the HCDCS. Most member countries will introduce the changes on 1 January 1996, however, with the current Australian tariff phasing regime reaching its completion on 1 July 1996, it was decided to delay implementation in Australia until that date. The Government has decided to maintain the existing tariff levels. To achieve this, it has been necessary to provide some additional 200 national tariff splits to those recommended by the WCO.

The changes to Schedule 3 are further explained in the Summary of Amendments issued in conjunction with the tabling of this Bill and should be read as one with this Explanatory Memorandum.

The Government will provide an administrative appeals mechanism by which interested parties may appeal situations where the rate of duty on goods changes as a result of the enactment of the Bill. The appeals will be accepted for twelve months after the implementation of this Act (up to 30 June 1997).

Schedule 4

Schedule 4 of the Customs Tariff provides concessional rates of duty for goods imported by prescribed persons and authorities, prescribed classes of goods and goods for use in certain industries or certain end uses. The text of some of the items in this Schedule has been reworded to provide better defined and administerable concessions.

These changes are explained in the Summary of Amendments issued in conjunction with the tabling of this Bill and should be read as one with this Explanatory Memorandum.

FINANCIAL IMPACT STATEMENT

The amendments provided in the legal provisions and Schedules 1 and 3 are revenue neutral. There appear to be unquantifiable revenue savings through the changes to Schedule 4.