Bills Digest No. 173 2004–05
Import Processing Charges Amendment Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
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Processing Charges Amendment Bill 2005
Introduced: 26 May
House: House of Representatives
Portfolio: Justice and Customs
The procedural clauses of
the Import Processing Charges Amendment Bill 2005 will commence
with Royal Assent. The substantive items contained in Scheduel 1
will commence immediately after the commencement of sections 3 to 6
of the Import Processing Charges Act 2001.
The Import Processing Charges
Amendment Bill 2005 (the Bill) will amend the Import Processing
Charges Act 2001 to increase the import declaration and the
warehouse declaration processing charges.
This Bill is one of a package of two Bills to restructure import
processing charges that are paid by people importing goods into
Australia. The Bill will increase the amount of the import
declaration and the warehouse declaration processing charges. The
other Bill, the Customs Legislation Amendment (Import Processing
Charges) Bill 2005, repeals the self-assessed clearance declaration
and the screening charge. It is discussed in a separate Bills
An import processing charge has been levied since
1997.(2) Its purpose is to recover all charges relating
to the commercial Customs activities required to process imports.
The services covered by the import processing charge are cargo
reporting and import entry processing. The charges are levied on
the range of activities involved in the processing of import
transactions. The charges do not apply to the processing of export
transactions, nor to the activity associated with Customs community
protection functions relating to border protection and the
detection and interception of prohibited imports and drugs.
The import processing charge was restructured by the Import
Processing Charges Act 2001 ( IPC Act ) which was introduced
as part of the package of international trade modernisation
legislation.(3) The IPC Act provided for a differential
charge to be levied on importers of high-volume low-value cargo,
such as bulk consignments of documents and consolidated mail orders
that are transported to Australia by specialist operators such as
Instead, the proposed restructure of the cost recovery charges
will make a distinction between imports arriving by air or post,
and imports arriving by sea. This new structure will be the same as
the original charging structure currently operating under the
Import Processing Charges Act 1997.
The Bill will increase import processing charges for goods
arriving by air, sea and post. It will amalgamate the current
charges for low-value items (which are being repealed by the
Customs Legislation Amendment (Import Processing Charges) Bill
2005), into the import and warehouse declaration processing
charges. According to the Explanatory Memorandum, the Government
estimates that the new charges will collect an additional $12.4
million in 2005 06.(5)
The increased charges take account of additional costs that have
been incurred by Customs. These relate primarily to quarantine
processing for foot and mouth disease (the IQI
initiative),(6) and container examination
logistics.(7) The increases also take into account the
increasing costs of the Cargo Management Re-engineering (CMR)
project. According to information provided to a Senate Estimates
Committee on 24 May 2005, the capital side of CMR (an amount of
about $170 million depreciated over a ten-year period) will be
taken into account in the new import processing
charges.(8) Only about fifty per cent of the
depreciation is attributed to import processing because the balance
of the system is used for other functions like export processing,
intelligence and border protection activities, which are not part
of the cost recovery regime.(9)
Schedule 1 amends the Import Processing
Charges Act 2001 to increase import processing charges. It
does this by increasing the charges for import declarations and for
warehouse declarations. Item 1 deals with import
declarations and provides that the minimum charges for
electronically lodged declarations are to be $49.50 for sea imports
(currently $44) (proposed subparagraph 5(3)(e))
and $30.10 for air and post imports (currently $27.10)
(proposed subparagraphs 5(3)(a) and
5(3)(c)). These amounts may not exceed $74 in the
case of sea imports, and $45 in the case of imports by air or post.
The minimum charge for manually lodged declarations are to be
$65.75 for sea imports (proposed subparagraph
5(3)(f)) and $48.85 for air and post imports
(proposed subparagraphs 5(3)(b) and
5(3)(d)). These amounts may not exceed $98.60 for
sea imports and $73.30 for air and post imports.
Item 2 substitutes new charges for warehouse
declarations. These are the same amounts as the import
declarations, namely for declarations lodged electronically, $49.50
for sea imports and $30.10 for air and post imports. For
declarations lodged manually, the base charges are $65.75 for sea
imports and $48.85 for air and post imports.
Commencement of these increased charges is to
occur immediately after the commencement of section 3 to 6 of the
Import Processing Charges Act 2001. Sections 3 to 6 of the
IPA Act are to commence on the day fixed by Proclamation under
subsection2(3) of the Customs Legislation Amendment and Repeal
(International Trade Modernisation) Act 2001.
R. Bell and T. John, Customs Legislation Amendment (Import
Processing Charges) Bill 2005 , Bills Digest, No. 172,
2004 05, Parliamentary Library, Canberra.
Australian Customs Notice 1996/44, 10 September 1996.
This measure was first announced in the August 1996 Budget. The
Import Processing Charges Act 1997, Customs Amendment
Act (No. 1) 1997 and Customs Depot Licensing Charges Act
1997 provide the legislative framework for the Customs Cost
Customs Legislation Amendment and Repeal (International
Trade Modernisation) Act 2001.
The Customs Legislation Amendment (Import Processing Charges)
Bill 2005 will repeal that part of the IPC Act (which is not due to
come into effect until the second half of 2005), so that the import
processing charge will no longer relate to the value of the goods
coming in. R. Bell and T. John, op. cit.
Explanatory Memorandum, Import Processing Charges Amendment Bill
2005, p. 3.
Increased Quarantine Intervention (IQI) initiative.
Explanatory Memorandum, op. cit., p. 2.
Senate Legal and Constitutional Legislation Committee, Estimates
Hearings, Australian Customs Service, 24 May 2005, p. 115.
Rosemary Bell and Thomas John
1 June 2005
Bills Digest Service
Information and Research Services
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© Commonwealth of Australia 2005
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Published by the Parliamentary Library, 2005.
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