House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Immigration and Border Protection, the Honourable Alex Hawke MP)

Schedule 1 - Amendments

Customs Act 1901

Part VAA of the Customs Act deals with the treatment of imported excise-equivalent goods in the manufacture of excisable goods. Excise-equivalent goods are those goods that, if they were produced or manufactured in Australia, would be subject to excise duty under the Excise Tariff Act 1921. This Part contains special rules for the treatment of biofuels and biofuel blends.

The amendments in the HS2017 Customs Bill make minor amendments to maintain the collection of the correct import duties for biofuels and biofuel blends imported under ChAFTA, and to implement changes required as part of the fifth review of the HS.

Item 1 - Subparagraph 105B(3)(b)(ii)

Item 1 omits the term "or 11" and substitutes with ", 11 or 12" in subparagraph 105B(3)(b)(ii).

This amendment inserts a reference to Schedule 12 to the Customs Tariff Act to maintain the collection of the correct import duties for biofuels and biofuel blends imported under ChAFTA.

Item 2 - Subsection 105B(4) (paragraph (a) of the definition of biofuel blend )

Item 2 omits the reference to subheadings 3824.90.50 and 3824.90.60, and substitutes these with a reference to subheadings 3824.99.30 and 3824.99.40 in paragraph (a) of the definition of "biofuel blend" in subsection 105B(4).

This amendment implements consequential changes resulting from the fifth review of the HS by the WCO, to ensure the effective continuing operation of the provisions in

Part VAA in relation to these products. Subheading 3824.90 in Schedule 3 to the Customs Tariff Act was subdivided into subheadings 3824.91 and 3824.99. Subheading 3824.91 separates certain substances controlled under the Chemical Weapons Convention from other goods of subheading 3824.99. Goods from current subheadings 3824.90.50 and 3824.90.60 are now classified to new subheadings 3824.99.30 and 3824.99.40 respectively.

Item 3 - Subsection 105B(4) (paragraph (b) of the definition of biofuel blend )

Item 3 omits the term "or 11" and substitutes with ", 11 or 12" in paragraph (b) of the definition of "biofuel blend" in subsection 105B(4).

This amendment inserts a reference to Schedule 12 to the Customs Tariff Act to maintain the collection of the correct import duties for biofuels and biofuel blends imported under ChAFTA.