EXPLANATORY STATEMENT

By-law No. 0604883

Customs Act 1901

Section 271 of the Customs Act 1901 (the Act) provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Chief Executive Officer of Customs may make by-laws for the purposes of that item.  A Customs Tariff is defined in section 4 of the Act to mean an Act imposing duties of customs, that is the Customs Tariff Act 1995 (the Customs Tariff Act).

On 14 December 2004, the Customs Tariff Amendment (Textile, Clothing and Footwear Post-2005 Arrangements) Act 2004 received the Royal Assent (Act No. 147, 2004).  This Act inserted new item 73 into Schedule 4 to the Customs Tariff Act to enable the operation of a Product Diversification Scheme (the PDS) for certain clothing and finished textiles. 

Item 73 applies to goods that are prescribed by by-law and are entered for home consumption between 1 July 2006 and 30 June 2017 (inclusive).  The item enables eligible clothing and textile manufacturers to apply duty credits owned under the PDS against imports of prescribed finished clothing and finished textile products.  The amount of duty payable on these goods will be reduced by the amount of duty credit applied to the importation

New By-law 0604883 prescribes the goods to which item 73 applies.  These goods are clothing and finished textiles:

a)         defined in the Product Diversification Scheme as at 20 December 2005; and

b)         which are goods that, if imported, would be classified to a tariff heading, subheading or classification of Schedule 3 to the Customs Tariff Act 1995 specified in Table 1 or 2 in the by-law.

The tariff headings, subheadings and classifications specified in Table 1 apply to finished clothing and the tariff headings, subheadings and classifications specified in Table 2 apply to finished textile articles.

The by-law takes effect on and from 1 July 2006.