Bills Digest no. 181 2008–09
Customs Tariff Amendment (2009 Measures No. 1) Bill 2009
[No. 2]
WARNING:
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
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Contact officer & copyright details
It should be noted that the name of the Bill as
introduced on 22 July 2009 is Customs Tariff Amendment (2009
Measures No. 1) Bill 2009.
The Bill is not identical to the earlier bill of the
same name, introduced in the House of Representatives on 11
February 2009, but is identical to the bill (which included
amendments made by the Government in the House of Representatives
on 25 February 2009) which was rejected by the Senate on 18 March
2009. The addition of the reference [No. 2] has been made by the
Department of the House of Representatives Table Office to indicate
that the Bill is introduced for a second time.
Passage history
Date
introduced: 22
June 2009
House:
House of Representatives
Portfolio:
Home Affairs
Commencement:
Sections 1–3 on the
day of Royal Assent; Schedule 1 on 27 April 2008; Schedule 3 on the
later of the day after Royal Assent or 1 July 2009; and Schedule 2
on the latest of the day after Royal Assent, the day after the
Excise Tariff Amendment (2009 No. 1) Act 2009 receives
Royal Assent or 1 July 2009. However the provisions contained
in Schedule 2 will not commence if the Excise Tariff Amendment
(2009 No. 1) Act 2009 does not receive Royal
Assent.
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The purpose of the Bill is to
amend the Customs Tariff Act 1995 (the Customs Tariff Act)
to:
- increase the excise-equivalent customs duty rate applying to
‘other excisable beverages not exceeding ten per cent by
volume of alcohol’ from $39.36 to $66.67 per litre of alcohol
from 27 April 2008 and
- ensure that products which mimic spirit-based ready-to-drink
beverages (RTDs) are subject to the same tax rate as RTDs.
For all information about the background to the Bill see the
Bills
Digest for the Excise Tariff Amendment (2009 Measures No. 1)
Bill 2009 [No. 2].[1]
As with the Excise Tariff Amendment (2009 Measures No. 1) Bill
2009 the original form of this Bill was amended in the House of
Representatives by the Government on 25 February 2009. The
amended form of this Bill was debated in the Senate during the
period 11–18 March 2009. On 18 March 2009 the Senate
rejected the amended Bill.
The current Bill is in identical terms to the amended Bill which
was debated in and rejected by the Senate on 18 March 2009.
According to the Explanatory Memorandum financial implications
of the increased tax on certain alcoholic beverages not exceeding
10 per cent by volume of alcohol (both through excise and
excise-equivalent customs tariff increases) is predicted to
be:[2]
|
|
|
|
|
|
|
|
Australian Taxation Office
|
Nil
|
$31.79m
|
$254.68m
|
$259.89m
|
$264.96m
|
|
Australian Customs Service
|
Nil
|
$36.65m
|
$144.26m
|
$109.61m
|
$132.94m
|
|
Impact on fiscal balance
|
Nil
|
$68.44m
|
$398.93m
|
$369.5m
|
$397.9m
|
Similarly, financial implications of the amendment to the
definition of beer and grape wine product is predicted to
be:[3]
|
|
|
|
|
|
|
|
Impact on fiscal balance
|
Nil
|
Nil
|
$30m
|
$30m
|
$30m
|
Schedule 1
Items 1–11 of Schedule 1 of the Bill
amend Column 3 (the rates of duty column) in Schedule 3 of the
Customs Tariff Act so that the rates accord with the Excise
Tariff Act 1921 (Excise Tariff Act).
Items 12–22 amend Column 3 in Schedule 5
of the Customs Tariff Act to show that the rate of duty for various
beverages originating from the US is $66.67 per litre of
alcohol.
Items 23–33 amend Column 3 in Schedule 6
of the Customs Tariff Act to show that the rate of duty for various
beverages originating from Thailand is $66.67 per litre of
alcohol.
Item 3 of Schedule 2 of the
Bill repeals the existing Additional Notes in Chapter 22 of
Schedule 3 of the Customs Tariff Act and substitutes the proposed
definition of ‘beer’ which is
in the same terms as the proposed definition to be substituted in
the Excise Tariff Act. This amendment is intended the achieve
the purpose of ensuring that products which mimic spirit-based RTDs
are subject to the same tax rate as RTDs.
The proposed definition sets a combination of minimum limits on
bitterness and maximum limits on sugar content that must be present
in the final beverage. Amongst other things,
‘beer’:
- can contain hops, extracts of hops or other bitters such that
it has international bitterness units of not less than 4.0:
proposed paragraph (b)
- but only must not contain more than 4 per cent weight
of sugars:[4]
proposed paragraph (c)
- must not have had artificial sweetener added to it:
proposed paragraph (d)
- may have added to it at any time other substances, including
flavours[5] but any
substance which contains alcohol must not add more than 0.5 per
cent to the total volume of the final beverage:
proposed paragraph (e), and
- will contain more than 1.15 per cent by volume of alcohol:
proposed paragraph (g).
Items 5, 6, 8 and 9 of Schedule
2 of the Bill make consequential amendments so that
references to ‘beer’ in other
parts of the Customs Tariff Act reflect the proposed
definition.
Section 19 of the Customs Tariff Act allows customs rates of
duty for certain alcohol and tobacco products to be adjusted
automatically, twice yearly. The section contains a table of
customs headings which correspond to the excise item for the same
product. The table therefore, links the excise rate to the
excise-equivalent customs rate for each of those
products.
Items 7, 11, 13 and 15 of Schedule
2 amend customs headings so that the excise-equivalent
rate of customs duty for certain beverages is increased to $69.16
per litre of alcohol. The Government increased the excise and
excise-equivalent customs duty rate applying to ‘other
excisable beverages not exceeding 10 per cent by volume of
alcohol’ (alcopops) from $39.36 per litre of alcohol
content’ to $66.67 per litre of alcohol content on and from
27 April 2008. This rate was increased to $68.54 per litre of
alcohol content on 1 August 2008 and increased again to $69.16
per litre of alcohol
content on 2 February 2009 as a result of the
bi‑annual indexation of excise and excise‑equivalent
customs duty rates.
The Customs Tariff Act does not contain a definition of
‘wine’. Instead that
term is defined in section 33–1 of the A New Tax System
(Wine Equalisation Tax) Act 1999 (WETA). That Act
broadly provides that ‘wine’ includes beverages
fermented from any fruit or vegetable and includes alcoholic
products such as fruit wines or vegetable wines, cider, perry,
mead, sake, grape wine and grape wine products.
The term ‘grape wine
products’ is also defined at section 31–3
of the WETA so that it is a beverage containing 70 per cent
grape wine. The remaining amount (up to 30 per cent) can
contain flavours, although there are some limits on the type and
use of ethyl alcohol. The Customs Tariff Act contains a
definition of ‘grape wine
products’ in the same terms.
Some examples of ‘grape wine products’ are wine
cocktails, flavoured wines and Irish style cream drinks, including
wine creams. According to the Explanatory Memorandum,
with a combination of flavourings or
ingredients a grape wine product could be produced to resemble a
spirit-based ready-to-drink beverage product… [which] could
be subject to significantly less tax than the RTD product.[6]
Item 2 repeals the Additional Note in Chapter
22 of Schedule 3 of the Customs Tariff Act which contains that
definition and substitutes the proposed definition of
‘grape wine products’.
Amongst other things a ‘grape wine product’ will be a
grape wine-based beverage that:
- has not had added to it the flavour of any alcoholic beverage
(other than wine): proposed paragraph 4(a),
and
- if the beverage has had ethyl alcohol added, the ethyl alcohol
must comply with certain statutory requirements including that the
ethyl alcohol must not add more than one percentage point to the
alcoholic strength by volume of the beverage: proposed
paragraph 4(b).
Item 2 also inserts a definition of
‘wine’ which will encompass
grape wine, cider or perry, fruit or vegetable wine, mead and sake:
proposed Additional Note 4A.
Proposed Additional Note 4B contains a
definition of ‘grape wine-based
beverage’ which:
- is not grape wine, but contains at least 700 ml of grape wine
per litre: proposed paragraph 4B(a)
- has not had ethyl alcohol from any source except grape spirit
or alcohol used in preparing vegetable extracts added to it:
proposed paragraph 4B(b), and
- has an alcoholic strength by volume of at least 8 per cent
volume but not exceeding 22 per cent volume: proposed
paragraph 4B(c).
The effect of these definitional changes is that certain
imported beverages which were previously subject to the WETA, will
instead be subject to rates of customs duty equivalent to those
applicable under the Excise Tariff Act.
Items 3–6 update the rate of duty payable
to $69.16 per litre of alcohol content to reflect the
bi‑annual indexation of excise and excise‑equivalent
customs duty rates.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2434.
Paula Pyburne
24 June 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
This work is copyright. Except to the extent of uses permitted
by the Copyright Act 1968, no person may reproduce or transmit any
part of this work by any process without the prior written consent
of the Parliamentary Librarian. This requirement does not apply to
members of the Parliament of Australia acting in the course of
their official duties.
This work has been prepared to support the work of the Australian
Parliament using information available at the time of production.
The views expressed do not reflect an official position of the
Parliamentary Library, nor do they constitute professional legal
opinion.
Feedback is welcome and may be provided to: web.library@aph.gov.au. Any
concerns or complaints should be directed to the Parliamentary
Librarian. Parliamentary Library staff are available to discuss the
contents of publications with Senators and Members and their staff.
To access this service, clients may contact the author or the
Library’s Central Entry Point for referral.
Back to top