Customs & excise update

Korea-Australia Free Trade Agreement Implementation

The Customs Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014 proposes to amend the Customs Act 1901 to introduce new rules of origin for goods that are imported into Australia from Korea, to implement the Korea-Australia Free Trade Agreement. The amendments will enable goods that satisfy the  rules of origin to enter Australia at preferential rates of customs duty. Complementary amendments to give effect to the Agreement will also be made to the Customs Tariff Act 1995 by Customs Tariff Amendment (Korea-Australia Free Trade Agreement Implementation) Bill 2014. The amendments will be operative from the later of 1 December 2014 or the day on which the Agreement comes into force for Australia.

Goods which principally functioned as electrical transformers were not entitled to a tariff concession

In Becker Vale Pty Ltd and Chief Executive Officer of Customs, the Administrative Appeals Tribunal (AAT) held that certain goods which had the principal function of transforming electricity, were properly classified under heading 8504.34.00 in Schedule 3 of the Customs Tariff Act 1995. Accordingly, the applicant could not benefit from TCO 0918490, as the tariff concession order did not apply to goods classified under that heading.

Review of border fees, charges and taxes

The Minister for Immigration and Border Protection has announced a review of border fees, charges and taxes and the release of an Industry Consultation Paper. The review will cover current major charging arrangements at the border, including Import Processing and 

Passenger Movement Charges, certain import related fees and charges recovered by the Department of Agriculture, and visa application charges. However, a number of other fees, charges and taxes will not form part of the review, such as customs duty (including refunds, tariff concessions and drawbacks), GST and other indirect taxes that Customs and Border Protection collects.

New rates of excise and customs duty for tobacco products

Substituted rates of excise and customs duty were released in respect of certain tobacco products with effect from 1 September 2014. Following recent legislative changes, excise and excise equivalent customs duty on tobacco and tobacco products are indexed based on average weekly ordinary time earnings instead of the Consumer Price Index, with indexation of rates scheduled to occur on 1 March and 1 September.