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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
eXCISE tARIFF VALIDATION BILL 2009
customs tARIFF VALIDATION 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 Validation of increased duty on certain alcoholic beverages 7
General outline and financial impact
Validation of increased duty on certain alcoholic beverages
The Excise Tariff Validation Bill 2009 and the Customs Tariff
Validation Bill 2009 provide for the validation of all duties
demanded or collected before 14 May 2009 because of the Excise
Tariff Proposal (No. 1) 2008 and the Customs Tariff Proposal (No.
1) 2008 so that they are taken to have been lawfully imposed and
lawfully demanded or collected.
Date of effect: 14 May 2009.
Proposal announced: On 15 April 2009, in a joint press release
issued by the Treasurer and the Minister for Health and Ageing.
Financial impact: These measures will validate revenues already
collected to the value of:
|Revenue |2007-08 |2008-09 |
|Australian |$21.7m |$139.2m |
|Taxation Office | | |
|Australian Customs|$44.0m |$180.4m |
|and Border | | |
|Protection Service| | |
|Goods and services|$6.6m |$32.0m |
|tax | | |
|Total revenue |$72.3m |$351.6m |
Note: For purposes of the Government's forward estimates the above
figures in the table would be zero as such estimates currently
assume the tariff proposals are supported by Parliament.
Compliance cost impact: No significant compliance and
administrative costs are expected resulting from the validation of
the revenue.
Chapter 1
Validation of increased duty on certain alcoholic beverages
Outline of chapter
1. This chapter explains how the Excise Tariff Validation Bill 2009
and the Customs Tariff Validation Bill 2009 will operate to ensure
the validation of increased duty on certain alcoholic beverages.
Context of the new law
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. This component is commonly referred to as 'excise-
equivalent customs duty'.
3. Excise and excise-equivalent customs duty apply to 'other excisable
beverages not exceeding 10 per cent by volume of alcohol'. Such
beverages are commonly referred to as 'alcopops' or 'ready-to-
drink' beverages or 'RTDs' and are broadly described as mixtures of
alcohol, in particular distilled spirits, with fruit juices or
other flavouring.
4. Under tariff proposals 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.
5. The higher rate under 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 while the
higher rate under the customs tariff was announced in the
Commonwealth Government Special Notices Gazette No. S88 of 26 April
2008 under section 273EA of the Custom Act 1901.
6. The higher rate was contained in the Excise Tariff
Proposal (No. 1) 2008 and the Customs Tariff Proposal (No. 1) 2008
that were tabled in the House of Representatives on 13 May 2008.
7. On 18 March 2009, the Senate negatived Bills that would have
confirmed the ongoing rate of excise or excise-equivalent customs
duty payable on alcopops in accordance with the tariff proposals.
8. Since then, the duty associated with the higher rate applicable
under the tariff proposals has continued to be collected as a
result of the statutory protections offered under section 114 of
the Excise Act 1901 and section 226 of the Customs Act 1901.
9. These sections provide protection to the Australian Taxation Office
and the Australian Customs and Border Protection Service officers
from commencement of legal proceedings for anything done by them
for the protection of the revenue in relation to a tariff
alteration proposed in the Parliament. This protection applies
until the close of the Parliamentary session in which that tariff
alteration is proposed or before the expiration of 12 months after
the alteration is proposed, whichever occurs first.
10. Under such statutory protections the higher rate of duty on
alcopops may be collected until the last moment of 13 May 2009.
11. Validation Bills supported by Parliament can be used to validate
revenue collected under statutory protection to ensure that it has
been lawfully imposed and lawfully demanded and collected.
Summary of new law
12. The Excise Tariff Validation Bill 2009 and the Customs Tariff
Validation Bill 2009 would permit all excise and excise-equivalent
customs duties demanded or collected relevant to the Excise Tariff
Proposal (No. 1) 2008 and the Customs Tariff Proposal (No. 1) 2008
to have been lawfully imposed and lawfully demanded and collected.
This covers the period of collection of duty from 27 April 2008 to
13 May 2009 inclusive.
Detailed explanation of new law
13. The Excise Tariff Validation Bill 2009 and cognate Customs Tariff
Validation Bill 2009 provide for the validation of all duties
demanded or collected as a result of the Excise Tariff
Proposal (No. 1) 2008 and the Customs Tariff Proposal (No. 1) 2008
tabled in the House of Representatives on 13 May 2008. This is so
they are taken to have been lawfully imposed and lawfully demanded
or collected. [Section 3, Excise Tariff Validation Bill 2009 and
section 3 of the Customs Tariff Validation Bill 2009]
14. The Excise Tariff Validation Bill 2009 and the Customs Tariff
Validation Bill 2009 also provide for the validation of all duties
demanded or collected before 14 May 2009 as a result of the
Commonwealth Government Special Notices Gazette No. S87 and No.
S88, published on 26 April 2008, so that such duties are taken to
have been lawfully imposed and lawfully demanded or collected.
[Section 4, Excise Tariff Validation Bill 2009 and section 4 of the
Customs Tariff Validation Bill 2009]
15. The Bills cover a period of collection of revenue from
27 April 2008 to 13 May 2009 inclusive. [Sections 3 and 4, Excise
Tariff Validation Bill 2009 and sections 3 and 4 of the Customs
Tariff Validation Bill 2009]
16. The proposed rate under the Excise Tariff Proposal (No. 1) 2008 and
the Customs Tariff Proposal (No. 1) 2008 of $66.67 per litre of
alcohol content on alcopops increased to $68.54 per litre of
alcohol and again to $69.16 per litre of alcohol content over the
period of the tariff proposals as a result of the indexation of the
duty rate. Indexation occurred on 1 August 2008 and
2 February 2009. To remove any doubt, the Bills validate
collections of excise and excise-equivalent customs duty at the
indexed rates. [Subsection 3(2), Excise Tariff Validation Bill
2009 and subsection 3(2) of the Customs Tariff Validation Bill
2009]
17. The Excise Tariff Validation Bill 2009 and the Customs Tariff
Validation Bill 2009 do not amend or affect the existing Excise Act
1901, the Excise Tariff Act 1921, the Customs Act 1901 or the
Customs Tariff Act 1995. Accordingly, the ongoing rates applicable
to excise and excise-equivalent products remain unaffected by the
Bills.
Application and transitional provisions
18. The Excise Tariff Validation Bill 2009 and the Customs Tariff
Validation Bill 2009 both commence on 14 May 2009. [Section 2,
Excise Tariff Validation Bill 2009 and section 2 of the Customs
Tariff Validation Bill 2009]