Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008 - 2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
eXCISE tARIFF AMENDMENT (2009 MEASURES No. 1) BILL 2009
customs tARIFF AMENDMENT (2009 MEASURES No. 1) BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by authority of the Treasurer, the Hon Wayne Swan MP and the
Minister for Home Affairs, the Hon Bob Debus MP)
Table of contents
General outline and financial impact 5
Chapter 1 Increased tax on certain alcoholic beverages 7
General outline and financial impact
Increased tax on certain alcoholic beverages
These two Bills amend the Excise Tariff Act 1921 and the Customs
Tariff Act 1995 to increase the excise and excise-equivalent
customs duty rate applying to certain alcoholic beverages not
exceeding 10 per cent by volume of alcohol from $39.36 per litre of
alcohol content to $66.67 per litre of alcohol content.
Date of effect: 27 April 2008.
Proposal announced: On 26 April 2008, excise and customs notices
were published in the Commonwealth Government Special Notices
Gazette No. S87 and No. S88, respectively.
Financial impact: These measures will have these revenue
implications:
|Revenue |2007-08|2008-09|2009-10|2010-11|2011-12|
|Australian |$35m |$225m |$245m |$265m |$290m |
|Taxation | | | | | |
|Office | | | | | |
|Australian |$20m |$120m |$125m |$135m |$145m |
|Customs | | | | | |
|Service | | | | | |
|Impact on |$55m |$345m |$370m |$400m |$435m |
|fiscal | | | | | |
|balance | | | | | |
These revenue impacts include the following estimated increased
goods and services tax (GST) collections:
|Revenue |2007-08|2008-09|2009-10|2010-11|2011-12|
|GST |$5m |$25m |$25m |$30m |$30m |
Compliance cost impact: Minor transitional compliance and
administration costs are expected resulting from the rate change.
Chapter 1
Increased tax on certain alcoholic beverages
Outline of chapter
1. This chapter explains amendments to the respective Schedules of the
Excise Tariff Act 1921 and the Customs Tariff Act 1995 to alter the
excise and excise-equivalent customs duties applying to certain
alcoholic beverages not exceeding 10 per cent by volume of alcohol.
Context of amendments
2. Excise is a tax on certain goods produced in Australia including
alcoholic beverages (other than wine). Imported goods comparable
to those subject to excise, known as 'excise-equivalent goods',
attract customs duty that includes a component at the same rate as
the excise rate so that imports and locally-produced goods are
taxed in an equivalent fashion. This component is commonly
referred to as 'excise-equivalent customs duty'.
3. The Government increased the excise rate applying to 'other
excisable beverages not exceeding 10 per cent by volume of
alcohol', and the relevant excise-equivalent customs duty rates
applying to the equivalent imported products, from $39.36 per litre
of alcohol content to $66.67 per litre of alcohol content which
equates to the applicable rate of other excisable beverages
exceeding 10 per cent, on and from 27 April 2008. The rates for
'other excisable beverages not exceeding 10 per cent by volume of
alcohol' are subject to indexation on a half-yearly basis and are
increased in February and August each year.
4. The intention to alter the Excise Tariff was announced in the
Commonwealth Government Special Notices Gazette No. S87 of
26 April 2008 under section 160B of the Excise Act 1901. The
intention to alter the Customs Tariff was announced in the
Commonwealth Special Notices Gazette No. S88 of 26 April 2008 under
section 273EA of the Customs Act 1901.
5. Excise and Customs Tariff Proposals were introduced into the House
of Representatives on 13 May 2008.
6. These amendments increase the rate for item 2 of the Schedule to
the Excise Tariff Act 1921 and the relevant rates in the Customs
Tariff Act 1995. This approach minimises changes for businesses
and maintains a consistent basis for the collection of statistics,
especially revenue statistics.
7. This measure is one part of the Government's ongoing strategy to
discourage binge-drinking, particularly among young people. The
measure has resulted from Government concerns at the growth in
consumption of alcoholic beverages often known as 'alcopops', or
'ready-to-drink beverages'.
8. Such pre-mixed beverages are broadly described as mixtures of
alcohol (in particular distilled spirits) with fruit juices or
other flavourings.
9. This measure will raise $1.6 billion over the forward estimates.
Summary of new law
10. This measure amends the Schedule to the Excise Tariff Act 1921 to
increase the rate under item 2 from $39.36 to $66.67 and amends
Schedules 3, 5 and 6 to the Customs Tariff Act 1995 so that the
rates in those Schedules accord with changes to the Schedule to the
Excise Tariff Act 1921. It is noted that the rates for item 2 of
the Schedule to the Excise Tariff Act 1921 and Schedules 3, 5 and 6
to the Customs Tariff Act 1995 are subject to indexation on a half-
yearly basis.
11. The ad valorem component of the customs duty on these beverages,
where applicable, has not been changed by this measure.
Comparison of key features of new law and current law
|New law |Current law |
|Excise duty rate |
|Item 2 of the Schedule to|Item 2 of the Schedule to|
|the Excise Tariff Act |the Excise Tariff Act |
|1921 has a rate of |1921 has a rate of |
|$66.67. |$39.36. |
|Excise-equivalent customs duty rate |
|Subheadings 2203.00.31; |Subheadings 2203.00.31; |
|2204.10.23; 2204.10.83; |2204.10.23; 2204.10.83; |
|2204.21.30; 2204.29.30; |2204.21.30; 2204.29.30; |
|2205.10.30; 2205.90.30; |2205.10.30; 2205.90.30; |
|2206.00.52; 2206.00.62; |2206.00.52; 2206.00.62; |
|2206.00.92; and |2206.00.92; and |
|2208.90.20 in Schedules |2208.90.20 in Schedules |
|3, 5 and 6 of the Customs|3, 5 and 6 of the Customs|
|Tariff Act 1995 have a |Tariff Act 1995 have a |
|non-ad valorem component |non-ad valorem component |
|of $66.67. |of $39.36. |
Detailed explanation of new law
12. Other excisable beverages not exceeding 10 per cent by volume of
alcohol are classified to item 2 of the Schedule to the Excise
Tariff Act 1921. Goods classified to item 2 are defined as any
beverage containing more than 1.15 per cent alcohol by volume but
not exceeding 10 per cent alcohol by volume, but not including beer
or wine.
13. 'Beer' is defined in the Excise Tariff Act 1921 and 'wine' is
defined in the A New Tax System (Wine Equalisation Tax) Act 1999.
An excisable product not meeting these definitions and with an
alcohol content not exceeding 10 per cent by volume falls into the
category of other excisable beverages.
14. Imported alcoholic beverages not exceeding 10 per cent by volume of
alcohol are classified under several subheadings in Schedule 3 to
the Customs Tariff Act 1995, as well as items in Schedules 5 and 6.
The subheadings that receive equivalent tax treatment to item 2 of
the Schedule to the Excise Tariff Act 1921 include: 2203.00.31;
2204.10.23; 2204.10.83; 2204.21.30; 2204.29.30; 2205.10.30;
2205.90.30; 2206.00.52; 2206.00.62; 2206.00.92; and 2208.90.20.
15. The amendment set out in the Excise Tariff Amendment (2009 Measures
No. 1) Bill 2009 alters the Schedule to the Excise Tariff Act 1921
to increase the rate applicable under item 2, from $39.36 to
$66.67. [Schedule 1, item 1 of the Excise Tariff Amendment (2009
Measures No. 1) Bill 2009]
16. Additionally, Schedules 3, 5 and 6 to the Customs Tariff Act 1995
are altered by the Customs Tariff Amendment (2009 Measures No. 1)
Bill 2009 so that the relevant rates of excise-equivalent customs
duty accord with changes to the Schedule to the Excise Tariff Act
1921. [Schedule 1, items 1 to 33 of the Customs Tariff Amendment
(2009 Measures No. 1) Bill 2009]
Application and transitional provisions
17. In accordance with subsection 5(2) of the Excise Tariff Act 1921,
these excise tariff amendments are taken to have effect on 27 April
2008. [Section 2 of the Excise Tariff Amendment (2009 Measures No.
1) Bill 2009]
18. The amendments to the Customs Tariff Act 1995 are taken to have
commenced on 27 April 2008. In addition, the amendments apply to
goods imported into Australia on or after 27 April 2008 and to
goods imported before 27 April 2008 that, in effect, have not been
entered or delivered into home consumption before that date.
[Schedule 1, item 34 of the Customs Tariff Amendment (2009 Measures
No. 1) Bill 2009]