SUMMARY OF ALTERATIONS

CUSTOMS TARIFF PROPOSAL (No. 1) 2026

Reasons for changes: To repeal the rates of duty for certain tariff classifications and replace with a ‘Free’ rate of duty.

Date of effect: 1 July 2026

Alterations to the Customs Tariff Act 1995

This Proposal advises of alterations to reduce to ‘Free’ the general rate of customs duty and any applicable preferential rates of customs duty applied to approximately 500 tariff headings and subheadings.

Where goods are not the produce or manufacture of a Preference Country and are not originating goods within the meaning of Part VIII of the Customs Act 1901 (Customs Act), the applicable customs duty is worked out by reference to the general rate of customs duty in the third column of the tariff heading or subheading to which the goods are classified in Schedule 3 to the Customs Tariff Act 1995 (Customs Tariff Act). The general rate is the rate of customs duty, other than the rate that applies in relation to a Preference Country, being Papua New Guinea, a Forum Island Country, a Least Developed Country, a Developing Country, Canada or Singapore. Certain goods may be subject to a general duty rate of up to 5 per cent under Schedule 3 to the Customs Tariff Act.

Goods may be subject to a preferential or concessional rate of customs duty that is less than the general rate when they are the produce or manufacture of a Preference Country, are originating under a free trade agreement within the meaning of Part VIII of the Customs Act, or meet the conditions for a concessional duty rate as set out in an item under Schedule 4 to the Customs Tariff Act. Therefore, despite certain goods classified under a number of tariff headings and subheadings being subject to the general rate of duty of 5 per cent in Schedule 3, only a small proportion of these goods are subject to the general rate of duty due to the near universal use of available concessional or preferential rates of customs duty for these goods.

The table in item 1 of Schedule 1 to the Customs Tariff Proposal (No.1) 2026 2026 lists tariff headings and subheadings for which the rates of duty in Schedule 3 to the Customs Tariff Act will be repealed and replaced with a general rate of duty of ‘Free’.

To ensure that preferential rates of customs duty are not greater than the general rate of duty, items 2 to 156 alter the rates of duty for tariff headings and subheadings listed in the table at item 1 that are also included in Schedule 14 to the Customs Tariff Act. Schedule 14 provides the preferential rates of customs duty applicable to goods that are RCEP originating under the Regional Comprehensive Economic Partnership (RCEP) Agreement, and within the meaning of Division 1N of Part VIII of the Customs Act. Aside from Schedule 3, Schedule 14 is the only schedule to the Customs Tariff Act requiring alteration. It is the only free trade agreement schedule for which the preferential customs duty rates have not already been incrementally reduced to ‘Free’ in respect of some of the 500 tariff headings and subheadings affected by this measure. The alterations proposed by these items preserve the phasing down of duty rates that has occurred in accordance with the RCEP Agreement prior to 1 July 2026, and applies a duty rate of ‘Free’ from 1 July 2026.

The amendments apply on and from 1 July 2026.