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CUSTOMS AMENDMENT REGULATIONS 2008 (NO. 4) (SLI NO 102 OF 2008)
Select Legislative Instrument 2008 No. 102
Issued by the Authority of the Minister for Home Affairs
Customs Act 1901
Customs Amendment Regulations 2008 (No. 4)
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.
Part XVA of the Act provides for the making of Tariff Concession Orders (TCOs) in certain circumstances; goods that are covered by a TCO may then be imported into Australia free from Customs duty or will be subject to a lower rate of Customs duty. However, subsection 269SJ(1) of the Act provides, in part, that the CEO of Customs must not make a TCO in respect of goods declared by the regulations to be goods to which a TCO should not extend.
Regulation 185 of the Customs Regulations 1926 (the Principal Regulations) provides, that for the purposes of subsection 269SJ(1), a TCO should not extend to goods to which a general rate of Customs duty specified in the Customs Tariff Act 1995 (the Tariff Act) is 10%, unless subregulation 185(2) applies to the good, or to goods classified to a heading or subheading in Column 2 of Schedule 2 to the Principal Regulations, unless the good is listed in column 3 of Schedule 2.
The amending Regulations add petroleum products, which are excise-equivalent goods, to the category of goods to which a TCO should not extend. The amending Regulations ensure that importers of all excise-equivalent goods are not able to avoid paying the excise-equivalent rate of Customs duty on such goods by obtaining a TCO.
Subsection 4(1) of the Act defines excise-equivalent goods as goods prescribed by the regulations. Regulation 1D of the Principal Regulations prescribes as excise-equivalent goods, goods classified under the headings or subheadings of Schedule 3 to the Tariff Act listed in that regulation.
Excise-equivalent goods are subject to Customs duty at a rate which is equal to the rate of excise duty that would have applied to the goods, under the Excise Tariff Act 1921, had the goods been domestically produced in Australia. Excise-equivalent goods are goods such as tobacco, alcohol and petroleum products. Item 6 of Schedule 2 to the Principal Regulations restricts TCOs from extending to tobacco and alcohol products, except ethanol absolute. Prior to the amending Regulations a TCO could have extended to petroleum products which meant that there was inconsistent taxation treatment between locally manufactured and imported petroleum products.
The amending Regulations amend subregulation 185(1) of the Principal Regulations to extend the restriction on the making of a TCO to goods that are excise-equivalent goods. The amending Regulations provide that a TCO is not able to extend to excise-equivalent goods other than:
a) goods listed in Column 3 of item 6 of Schedule 2; or
b) goods classified to subheading 3817.00.10 or 3819.00.00 of Schedule 3 to the Tariff Act.
Column 2 of item 6 of Schedule 2 to the Principal Regulations lists headings 1520.00.00 to 2403 of Schedule 3 to the Tariff Act. A TCO cannot extend to goods classified to a heading or subheading between 1520.00.00 and 2403 inclusively, unless the good is listed in column 3 of item 6 as a good to which the restriction on the making of a TCO does not apply. Goods classified to a heading or subheading covered by item 6 in Schedule 2 may also be excise-equivalent goods. The amending Regulations retain the ability for a TCO to extend to goods listed in column 3 of item 6 of Schedule 2 to the Principal Regulations, even where those goods are also excise-equivalent goods. Ethanol absolute is the only excise-equivalent good listed in column 3.
Subheading 3817.00.10 of Schedule 3 to the Tariff Act covers mixed alkylbenzenes (a type of solvent) and heading 3819.00.00 of Schedule 3 to the Tariff Act covers certain hydraulic brake fluids and other liquids for hydraulic transmission. These products are excise-equivalent goods, but unlike all other excise-equivalent goods are subject to a rate of Customs duty of 5% plus the excise equivalent rate of Customs duty. The amending Regulations retain the ability, under Part XVA of the Act, for a TCO to be made to extend to these goods so that the liability to pay the 5% rate of Customs duty is removed. Under item 50 of Schedule 4 to the Tariff Act, these goods, when the subject of a TCO, are still subject to the excise-equivalent rate of Customs duty.
No consultation was undertaken specifically in relation to the amending Regulations as the amendments are of a machinery nature and are considered to have low impact on business.
The amending Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.