EXPLANATORY STATEMENT
Select Legislative Instrument 2009 No. 216
Issued by the Authority of the Minister for Home Affairs
Customs Act 1901
Customs Amendment Regulations 2009 (No. 4)
Section 270 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.
The purpose of the amending Regulations is to update the list of 'excise-equivalent goods' contained in subregulation 1D(1) of the Customs Regulations 1926 (the Principal Regulations).
The amending Regulations are required as a consequence of amendments to the Customs Tariff Act 1995 (the Tariff Act) by the Customs Tariff Amendment (2009 Measures No. 1) Act 2009 (the Tariff Amendment Act). The amendments to the Tariff Act are part of the Government's strategy to reduce the consumption of alcoholic beverages often know as 'alcopops' or 'ready-to-drink beverages' (RTDs).
'Excise-equivalent goods', which is defined in subsection 4(1) of the Customs Act to mean goods prescribed by the regulations for the purposes of the definition, are imported goods that, if they were produced or manufactured in Australia, would be subject to excise duty. Excise-equivalent goods include goods such as alcohol, petroleum products and tobacco. Excise-equivalent goods are subject to a flat rate of customs duty that are equal to the rates of excise duty applying to their locally manufactured equivalents. Some are also subject to a rate of customs duty that is calculated by reference to the value of the goods.
The Principal Regulations prescribe as 'excise-equivalent goods' goods classified to a subheading of Schedule 3 to Tariff Act which is specified in subregulation 1D(1).
The Tariff Amendment Act has amended the definitions of 'beer' and 'grape wine products' contained in the Tariff Act with the result that products made from beer or grape wine and which mimic spirit based RTDs are subject to the higher rate of customs duty which applies to all other RTDs. In doing so, the Tariff Amendment Act has repealed a number of existing subheadings and creates a number of new subheadings in Schedule 3 to the Tariff Act.
The amending Regulations update the list of subheadings contained in subregulation 1D(1) of the Principal Regulations to reflect the changes made to the subheadings contained in Schedule 3 to the Tariff Act. The amending Regulations have the effect that imported products made from beer or grape wine and which mimic spirit based RTDs are excise equivalent goods and therefore taxed in an equivalent fashion to similar goods which are produced locally.
Relevant industry and industry associations were consulted with regarding the amendments to the Tariff Act in relation to the beer and wine changes.
The amending Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
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Overview
The Customs Amendment Regulations 2009 (No. 4) were enacted to address a legislative gap arising from amendments to the Customs Tariff Act 1995 by the Customs Tariff Amendment (2009 Measures No. 1) Act 2009. These regulations were issued under the authority of the Minister for Home Affairs to update the list of 'excise-equivalent goods' in the Customs Regulations 1926, aligning them with the revised definitions of 'beer' and 'grape wine products' as set out in the Customs Tariff Act 1995. The overarching policy objective of these amendments is to reduce the consumption of alcoholic beverages, specifically 'alcopops' or'ready-to-drink beverages' (RTDs), by ensuring imported products made from beer or grape wine that mimic spirit-based RTDs are subject to the same customs duty as locally produced equivalents. This regulatory update ensures consistency in taxation and regulatory treatment between imported and locally manufactured goods, thereby maintaining a level playing field for industry participants.
Scope and Application
The Customs Amendment Regulations 2009 (No. 4) update the list of 'excise-equivalent goods' under the Customs Act 1901, ensuring that imported goods that would be subject to excise duty if produced or manufactured in Australia are taxed accordingly. These regulations apply to the goods specified in subregulation 1D(1) of the Customs Regulations 1926 and are necessary due to amendments in the Customs Tariff Act 1995, which were themselves altered by the Customs Tariff Amendment (2009 Measures No. 1) Act 2009. This legislative change aims to align the taxation of imported alcoholic beverages, specifically those mimicking spirit-based ready-to-drink beverages (RTDs), with those produced domestically. The Regulations extend across the Commonwealth of Australia, applying to all imported goods that meet the criteria for excise-equivalent goods, thereby ensuring consistency in duty imposition. There are no stated exclusions or exemptions within the scope of these Regulations, as they are designed to comprehensively cover all relevant goods in line with the updated tariff classifications.
Key Provisions
The Customs Amendment Regulations 2009 (No. 4) are designed to update the list of 'excise-equivalent goods' as outlined in subregulation 1D(1) of the Customs Regulations 1926 (paragraph 1). This update is a direct consequence of the changes to the Customs Tariff Act 1995, as amended by the Customs Tariff Amendment (2009 Measures No. 1) Act 2009. These amendments, in turn, reflect the government's strategy to curb the consumption of alcoholic beverages commonly known as 'alcopops' or'ready-to-drink beverages' (RTDs). Excise-equivalent goods are imported products that, if manufactured in Australia, would be subject to excise duty. Examples of such goods include alcohol, petroleum products, and tobacco. These goods are taxed at a flat rate of customs duty equivalent to the excise duty applied to their locally produced counterparts.
The Customs Amendment Regulations 2009 (No. 4) mandate that imported products made from beer or grape wine, which mimic spirit-based RTDs, now fall under the category of excise-equivalent goods. This classification means that these imported products will be subject to a higher rate of customs duty, aligning with the higher rates applied to other RTDs. The regulations achieve this by updating the list of subheadings in subregulation 1D(1) to mirror the revised subheadings in Schedule 3 of the Customs Tariff Act 1995. Such measures ensure that the taxation on imported products is commensurate with that on domestically produced goods.
Under these regulations, parties and entities involved in importing goods classified as excise-equivalent must ensure compliance with the updated subheadings and associated customs duties. Importers, customs brokers, and other stakeholders must be aware of the changes and adjust their practices accordingly. They must correctly classify the imported goods and declare them as excise-equivalent goods when submitting documentation to customs authorities. Failure to do so may result in non-compliance, leading to potential legal and financial repercussions.
Failure to comply with the Customs Amendment Regulations 2009 (No. 4) can result in significant penalties. The Act provides for civil and criminal penalties for breaches, although the specific penalties are not detailed within the explanatory statement. Generally, civil penalties for customs-related offences can include fines up to a substantial amount, depending on the severity and intent of the breach. Criminal penalties may include imprisonment, particularly if the breach is deemed to be intentional or involves significant financial loss to the government. Importers and other relevant parties must therefore ensure they adhere strictly to the regulations to avoid these consequences.