Explanatory Memorandum
(Circulated by authority of the Minister for the Environment and Heritage, Senator the Hon Robert Murray Hill)Customs Tariff Amendment (Product Stewardship for Waste Oil) Bill
Outline
4.1 The purpose of this Bill is to enact amendments to the Customs Tariff Act 1995 which are consequential to the Product Stewardship (Oil) Bill to enable standardisation of the collection of an excise-style levy across relevant imported and domestically produced materials and products. Excise Tariff legislation is also being amended to achieve this standardisation.
Context of reform
4.2 On 28 May 1999, the Prime Minister announced an agreement between the Government and the Democrats to secure passage of key tax reform proposals. Included in the agreement was funding for a "comprehensive product stewardship" arrangement for oil recycling.
Summary of new law
4.3 Under the existing taxation regime, oils are subject to wholesale sales tax, but, with the exception of hydraulic brake fluids of tariff subheading 3819.00.00, are not subject to excise or customs duty. Hydraulic brake fluids are subject to a general rate of customs duty of 5%.
4.4 Excise tariff legislation is being amended to provide for an excise style levy on domestically produced oils and greases. This Bill legislates a customs rate of duty for similar imported oils and greases. The revenue collected through the imposition of excise and customs duties on these goods will fund payments to eligible companies recycling waste oil in environmentally appropriate ways. Payments will be provided under the Product Stewardship (Oil) Bill .
Definition of oils
4.5 For the purposes of these provisions, "oils" include:
- a)
- petroleum based oils (including lubricant base oils; prepared lubricant additives containing carrier oils; lubricants for engines, gear sets, pumps and bearings; greases; hydraulic fluids; brake fluids, transmissions oils; and transformer and heat transfer oils); and
- b)
- their synthetic equivalents.
Notes on clauses
4.6 A Bill for an Act to amend the Customs Tariff Act 1995 , and for related purposes.
4.7 Clause 1 - Short Title - Customs Tariff Amendment (Product Stewardship for Waste Oil) Act 2000 .
4.8 Clause 2 - Commencement of the Act on the day on which this Act receives the Royal Assent, with one exception Schedule 1 commences, or is taken to have commenced on the commencement of Part 2 of the Product Stewardship (Oil) Bill .
4.9 Clause 3 - Schedule (s)
This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in the Schedule is amended in accordance with the applicable items of the Schedule. The clause also provides that the other items of the Schedule have effect according to their own terms.
4.10 Schedule 1 - The amendments in this Schedule commence, or are taken to commence on the commencement of Part 2 of the Product Stewardship (Oil) Bill .
- Item 1
- provides an amendment to section 19(1) of the Customs Tariff Act 1995 toallow the adjustment of the rate of duty to items in Schedule 4 of the Act that are listed in the table of paired customs tariff subheadings and excise items.
- Item 2
- in this Schedule contains changes to the table of paired customs tariff subheadings and excise items in section 19(1) of the Customs Tariff Act 1995 . It allows the customs rate of duty to be adjusted in line with movements in the excise rate of duty for similar goods. This amendment inserts the new excise items and customs tariff subheadings and and fourth schedule item covering oils.
- Item 3
- provides a split in tariff subheading 2710.00.90 to create new subheadings 2710.00.91, 2710.00.92 and 2710.00.99. Petroleum based oils, with the exception of petroleum based greases, covered by this legislation will be classified in subheading 2710.00.91 and attract the levy of $0.05 per litre. Petroleum based greases will be classified in subheading 2710.00.92 and attract a levy of $0.05 cents per kilogram. The remainder of the products previously covered by subheading 2710.00.90 and not covered by this legislation will then be classified in subheading 2710.00.99 and retain their duty free status.
- Items 4 to 6
- inclusive refer to subheadings 3403.11.00, 3403.19.00, 3403.91.00, 3403.99.00 and 3811.21.00 which cover synthetic or mixtures of petroleum based and synthetic oils covered by the Product Stewardship legislation. Each of these subheadings has been split so as to levy duty on solid and semi-solid products at five cents per kilogram and liquid products at five cent per litre.
- Item 7
- of this Bill amends the rate of duty for hydraulic fluids of heading 3819.00.00 which currently attract a rate of duty of 5%. The $0.05 per litre levy is being added to the existing 5% rate of duty.
- Item 8
- provides a technical amendment to the coverage of item 50 in Schedule 4 to the Customs Tariff Act 1995 . Item 50 provides a concessional rate of 3% for goods that are subject to a Tariff Concession Order (TCO). Certain goods classified to heading 3819.00.00 are subject to existing TCOs and are subject to a 3% rate of duty. Under the product stewardship arrangements it is intended to collect the levy on these goods. Item 50 is amended to exclude goods classified to heading 3819.00.00.
- Item 9
- creates new concessional item 50B for goods classified to heading 3819.00.00 which are subject to a TCO issued under item 50 of the Customs Tariff Act 1995 . These goods will be subject to a general rate of duty of 3% and the levy of $0.05 per litre.