Senate

Supplementary Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 1 - Duty rates for certain beer

Excise Tariff Amendment Bill (No. 1) 2001

Outline of chapter

1.1 Schedule 1, Part 6, item 18 will amend Excise Tariff subitem 1(C) of the Schedule to the Excise Tariff Act to provide for reduced rates of duty on certain beer.

Context of reform

1.2 The Prime Minister announced in a Media Release of 3 April 2001 that the Government will introduce tariff proposals to change the rates of excise and customs duty on draught beer with effect from 4 April 2001.

1.3 This amendment is identical to, and ratifies, the Excise Tariff proposal that gives effect to the Prime Ministers announcement.

Summary of new law

1.4 Excise Tariff subitem 1(C) of the Schedule to the Excise Tariff Act will be repealed and substituted with new subitem paragraphs and rates of excise duty for beer packaged in an individual container of 48 litres or less, and beer packaged in an individual container exceeding 48 litres.

Detailed explanation of new law

1.5 The Schedule to the Excise Tariff Act will be altered by repealing subitem 1(C) and substituting the subitem 1(C) with 2 new paragraphs and tiers of rates as follows:

•

beer packaged in an individual container not exceeding 48 litres, with the rates of duty based on alcohol content (i.e. for low strength, mid strength and full strength beer) introduced on 1 July 2000 that have since been subject to indexation increases in August 2000 and February 2001; and

•

beer packaged in an individual container exceeding 48 litres, with 3 rates of duty for the differing alcoholic content of low, mid and full strength.

1.6 The substituted subitem and rates will take effect on and from 4 April 2001.

CUSTOMS Tariff Amendment Bill (No. 2) 2001

Outline of chapter

1.7 Part 4 of the Schedule amends tariff subheadings 2203.00.8 and 2206.00.7 to provide for reduced rates of customs duty on certain beer.

Context of reform

1.8 The Prime Minister announced in a Press Release of 3 April 2001 that the Government will introduce tariff proposals to change the rates of excise and customs duty on draught beer with effect from 4 April 2001.

1.9 This amendment is identical to, and ratifies, the Customs Tariff proposal that gives effect to the Prime Ministers announcement.

Summary of new law

1.10 Customs Tariff subheadings will be repealed and substituted with new subheadings and rates of customs duty for beer packaged in an individual container of 48 litres or less, and beer packaged in an individual container exceeding 48 litres.

Detailed explanation of new law

1.11 Item 23 of Part 4 of the Schedule amends the table to section 19(1) of the Customs Tariff Act to reflect the new paired tariff subheadings and excise items. Section 19 allows the customs rates of duty to be automatically adjusted in line with movements in the Consumer Price Index, which are reflected in the excise rates of duty for similar goods.

1.12 Items 24 and 25 of Part 4 of the Schedule amend the Customs Tariff to separately identify beer in an individual container exceeding 48 litres and to apply the reduced rates of duty based on alcohol content (i.e. for low strength, mid strength and full strength beer).

1.13 Beer packaged in an individual container not exceeding 48 litres, retains the rates of duty introduced on 1 July 2000 that have been subject to indexation increases in August and February 2001.

1.14 The new tariff subheadings and rates took effect on and from 4 April 2001.