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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
IMPORT PROCESSING CHARGES AMENDMENT BILL 2005
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Justice and Customs,
Senator the Honourable Christopher Martin Ellison)
IMPORT PROCESSING CHARGES AMENDMENT BILL 2005
OUTLINE
The purpose of this Bill is to amend the Import Processing Charges Act 2001 (the IPC
Act) to restructure the import declaration processing charge and warehouse
declaration processing charge. This Bill is one of two in the legislative package to
restructure the cost recovery regime for import related services.
The IPC Act introduces new cost recovery arrangements to support changes in the
management and processing of cargo by the Australian Customs Service (Customs)
implemented under the Customs Legislation Amendment and Repeal (International
Trade Modernisation) Act 2001 (the ITM Act). The amended IPC Act replaces the
current cost recovery regime in the Import Processing Charges Act 1997.
The new cost recovery arrangements proposed under this Bill give continuing effect to
the Government's decision to fully recover the cost of import processing by Customs.
The IPC Act and the ITM Act were enacted in 2001 but the charging provisions of
these Acts have not commenced and are due to commence in the second half of
2005.
Under the IPC Act the charging structure for both import declaration and warehouse
declaration processing charges is based on the value of the imported goods,
irrespective of the method of importation. This charging structure is different from the
charges contained in the Import Processing Charges Act 1997, which are based on
the mode of importation of goods into Australia (sea, air or post).
Since the enactment of the IPC Act, the importing environment has changed
substantially as reflected by charge increases to recover the costs for increased
quarantine inspection and container examination logistics. Quarantine processing
predominantly takes place in the air and post environments and container examination
occurs predominantly in the sea environment.
The charging structure proposed by this Bill imposes charges based on the method of
importation, either by sea, air or post without reference to the value of the imported
goods. This recognises the cost differences between each mode of importation. The
low value charges have been amalgamated into the charges on electronically lodged
declarations, as declarations for low value items will be lodged almost exclusively
through electronic means in the new cargo management environment. The proposed
charges for electronically lodged declarations are $49.50 for sea imports (currently
$44) and $30.10 for air and post imports (currently $27.10). The base charges for
manually lodged declarations are to be the same as those currently charged under the
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Import Processing Charges Act 1997, that is $65.75 for sea imports and $48.85 for air
and post imports.
The new charges are set to allow full recovery of costs associated with import
processing, increased quarantine inspection costs and Container Examination Facility
logistics costs. The import processing costs to be recovered include costs associated
with compliance assurance. The additional costs will be small in proportion to overall
importing costs with the increase in charges for importations by sea equating to 0.1%
of transport, insurance and brokers fees. The increase in charges for importations by
air and post principally relates to the recovery of approximately $9.2 million that would
be collected from the charges on low value consignments that are to be repealed.
Taking the amalgamation of the low value consignment charges with air and post
charges into account, the proposed new charges generate an overall aggregate
reduction of 4% in costs in the air and post import environments.
The importing industry agrees with the need to implement a charging structure that is
simple and transparent and that does not cross-subsidise between different modes of
importation. Industry also supports the amalgamation of the current charges for low
value items, which are being repealed by the Customs Legislation Amendment (Import
Processing Charges) Bill 2005, into the import and warehouse declaration processing
charges.
FINANCIAL IMPACT STATEMENT
It is projected that approximately 222,000 importers will generate 3.6 million customs
import and warehouse declarations in the financial year 2005-06. More than 99% of
these declarations are expected to be lodged electronically. The new charges will
collect an additional $12.4 million in 2005-06.
Page 3 Import Processing Charges Amendment Bill 2005
IMPORT PROCESSING CHARGES AMENDMENT BILL 2005
NOTES ON CLAUSES
Clause 1 Short title
1. This clause provides for the Bill, when enacted, to be cited as the Import Processing
Charges Amendment Act 2005.
Clause 2 - Commencement
1. Subclause (1) provides that each provision of this Act specified in column 1 of the
table in that subclause commences or is taken to have commenced on the day or at
the time specified in column 2 of the table.
2. Item 1 of the table provides that sections 1 to 3 and anything in this Act not elsewhere
covered by the table will commence on the day on which the Act receives the Royal
Assent.
3. Item 2 of the table provides that Schedule 1 commences immediately after the
commencement of sections 3 to 6 of the Import Processing Charges Act 2001 (the
IPC Act). The IPC Act will commence on the day fixed by Proclamation under
subsection 2(3) of the Customs Legislation Amendment and Repeal (International
Trade Modernisation) Act 2001 (the ITM Act). This day is expected to be in the
second half of 2005.
4. Subclause (2) provides that Column 3 of the table contains additional information that
is not part of the Act.
Clause 3 - Schedule(s)
5. This clause is the formal enabling provision for the Schedule to the Bill, providing that
each Act specified in a Schedule is amended in accordance with the applicable items
of the Schedule. In this Bill, the IPC Act is being amended.
6. The clause also provides that the other items of the Schedules have effect according
to their terms. This is a standard enabling clause for transitional, savings and
application items in amending legislation.
Page 4 Import Processing Charges Amendment Bill 2005
SCHEDULE 1 - AMENDMENTS
Import Processing Charges Act 2001
Item 1 - Paragraphs 5(3)(a) and (b)
7. This item repeals paragraphs 5(3)(a) and (b) of the IPC Act and substitutes new
paragraphs 5(3)(a) to (f). The new paragraphs set out the new amounts of import
declaration processing charge for an electronic and a documentary import declaration
that relates to goods to which section 68 of the Customs Act 1901 (the Customs Act)
applies i.e. imported goods that are intended to be entered for home consumption.
8. Paragraph 5(3)(a) provides that for an electronic import declaration that relates to
goods imported into Australia by air (other than goods imported through the post), the
amount of import declaration processing charge is $30.10 or such other amount (not
exceeding $45.00 as is prescribed).
9. Paragraph 5(3)(b) provides that for a documentary import declaration that relates to
goods imported into Australia by air (other than goods imported through the post), the
amount of import declaration processing charge is $48.85 or such other amount (not
exceeding $73.30 as is prescribed).
10. Paragraph 5(3)(c) provides that for an electronic import declaration that relates to
goods imported into Australia through the post, the amount of import declaration
processing charge is $30.10 or such other amount (not exceeding $45.00 as is
prescribed).
11. Paragraph 5(3)(d) provides that for a documentary import declaration that relates to
goods imported into Australia through the post, the amount of import declaration
processing charge is $48.85 or such other amount (not exceeding $73.30 as is
prescribed).
12. Paragraph 5(3)(e) provides that for an electronic import declaration that relates to
goods imported into Australia by sea (other than goods imported through the post), the
amount of import declaration processing charge is $49.50 or such other amount (not
exceeding $74.00 as is prescribed).
13. Paragraph 5(3)(f) provides that for a documentary import declaration that relates to
goods imported into Australia by sea (other than goods imported through the post), the
amount of import declaration processing charge is $65.75 or such other amount (not
exceeding $98.60 as is prescribed).
Page 5 Import Processing Charges Amendment Bill 2005
Item 2 - Paragraphs 5(6)(a) and (b)
14. This item repeals paragraphs 5(6)(a) and (b) of the IPC Act and substitutes new
paragraphs 5(6)(a) to (f). The new paragraphs set out the new amounts of warehouse
declaration processing charge for an electronic and a documentary warehouse
declaration that relates to goods to which section 68 of the Customs Act 1901 (the
Customs Act) applies i.e. imported goods that are intended to be entered for
warehousing.
15. Paragraph 5(6)(a) provides that for an electronic warehouse declaration that relates to
goods imported into Australia by air (other than goods imported through the post), the
amount of warehouse declaration processing charge is $30.10 or such other amount
(not exceeding $45.00 as is prescribed).
16. Paragraph 5(6)(b) provides that for a documentary warehouse declaration that relates
to goods imported into Australia by air (other than goods imported through the post),
the amount of warehouse declaration processing charge is $48.85 or such other
amount (not exceeding $73.30 as is prescribed).
17. Paragraph 5(6)(c) provides that for an electronic warehouse declaration that relates to
goods imported into Australia through the post, the amount of warehouse declaration
processing charge is $30.10 or such other amount (not exceeding $45.00 as is
prescribed).
18. Paragraph 5(6)(d) provides that for a documentary warehouse declaration that relates
to goods imported into Australia through the post, the amount of warehouse
declaration processing charge is $48.85 or such other amount (not exceeding $73.30
as is prescribed).
19. Paragraph 5(6)(e) provides that for an electronic warehouse declaration that relates to
goods imported into Australia by sea (other than goods imported through the post), the
amount of warehouse declaration processing charge is $49.50 or such other amount
(not exceeding $74.00 as is prescribed).
20. Paragraph 5(6)(f) provides that for a documentary warehouse declaration that relates
to goods imported into Australia by sea (other than goods imported through the post),
the amount of warehouse declaration processing charge is $65.75 or such other
amount (not exceeding $98.60 as is prescribed).
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