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CUSTOMS AMENDMENT REGULATIONS 2004 (NO. 6) 2004 NO. 364
STATUTORY RULES 2004 NO. 364
Issued by the Authority of the Minister for Justice and Customs
Customs Act 1901
Customs Amendment Regulations 2004 (No. 6)
Subsection 270(1) of the Customs Act 1901 (the Act) provides, in part, that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any business relating to the Customs.
The purpose of the amending Regulations is to amend the Customs Regulations 1926 (the Principal Regulations) so that a person may apply for a Tariff Concession Order (TCO) for footwear uppers. If a TCO is made in respect of footwear uppers, a lower rate of customs duty would apply to them.
Part XVA of the Act sets out a scheme under which TCOs may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Paragraph 269SJ(1)(b) of the Act provides that the CEO must not make a TCO in respect of goods declared by the regulations to be goods to which a TCO should not extend. Paragraph 185(1)(b) of the Principal Regulations provides that for the purposes of subsection 269SJ(1) of the Act, a TCO should not extend to goods classified under a heading or subheading in column 2 of an item in Schedule 2 to the Principal Regulations unless the goods are listed in column 3 of the item as goods to which this restriction does not apply.
Item 30 of Schedule 2 to the Principal Regulations prevents a TCO being made in relation to goods classified to heading 6406 of Schedule 3 to the Customs Tariff Act 1995 except parts for ski-boots and cross-country ski footwear and wooden shanks for boots, shoes or slippers.
Heading 6406 covers "parts of footwear (including uppers whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles; gaiters, leggings and similar articles, and parts thereof'.
The amending Regulations include footwear uppers in column 3 of item 30 of Schedule 2 so that an importer of footwear uppers could apply for a TCO in relation to those goods.
The general rate of customs duty on footwear is currently 15% and on footwear uppers is 10%. However, the rate of customs duty on footwear uppers imported from certain developing countries including India and China is 5%. Hence, there is an advantage in importing footwear uppers from those developing countries to manufacture footwear in Australia rather than importing footwear. On 1 January 2005, the general rate for footwear will be reduced to 10% but the rate for footwear uppers from the relevant developing countries will remain at 5%. Hence, the advantage of importing footwear uppers from those countries to manufacture footwear in Australia may be diminished.
By removing the prohibition on applying for a TCO in respect of footwear uppers, a person importing those goods would be able to apply for a TCO and if a TCO is granted, footwear uppers will be able to be imported duty free.
This proposal is consistent with Government policy of encouraging investment and innovation in the footwear industry.
The amending Regulations allow a person to apply for a TCO only in respect of footwear uppers. A TCO may be granted only if on the day on which the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business.
The amending Regulations commence on the date of their notification in the Gazette.