1. Lesson 12 Tariffs and Customs Li, Jialong 2011-2-26

2. Australia ’ s WTO (World Trade Organisation) Tariff Schedule The Schedule of Concessions on Goods (pdf - 306 pages) contains Australia’s commitments under the WTO on tariffs and tariff quotas, as well as Australia’s commitments on export subsidies and domestic support for agricultural products. This is a consolidation of commitments entered into by Australia in past negotiations under the GATT and WTO, including the Uruguay Round. It lists obligations Australia has undertaken not to raise tariffs above levels agreed in trade negotiations and upper limits for government expenditure for specified types of subsidies in the agriculture sector. Tariffs actually imposed on goods when they are imported into Australia will normally be less than the WTO commitments set out in the consolidated schedule.

3. Customs Tariff Goods imported into Australia require classification under Customs Tariff Act 1995. Customs import entry procedures are based upon self-assessment by importers, including self-assessment of the correct classification of goods. Importers should be aware of all their obligations in this regard. Penalties may be imposed for the submission of incorrect or misleading information

4. Customs Tariff While it is not a requirement, it is recommended that importers unsure of their ability to accurately classify goods, consider employing the services of a customs broker. Brokers are not part of Customs, but are professionals who specialise in the clearance of imported goods and are licensed by Customs. They may be contacted by reference to the yellow pages of local telephone directories under "Customs Brokers", or by contacting the local branch of the Customs Brokers Council of Australia.

5. The Tariff comprises the Act and eight Schedules Schedule 1 is a list of countries and places whose originating goods may receive a preferential rate of duty. Schedule 2 contains the Interpretative Rules for classifying goods in Schedule 3. Schedule 3 is the list of tariff classifications and applicable rates of duty. Schedule 3 is divided into 21 sections and 97 chapters. The sections and chapters in Schedule 3 also contain legal Notes, including Australian Additional Notes that make legal direction about the classification of some goods, and must be used where relevant. Schedule 4 lists those classes of goods for which a concessional rate of duty applies. Schedule 5 is a list of tariff classifications under which US-originating goods are NOT entitled to a free rate of duty and the duty rates which apply. Schedule 6 is a list of tariff classifications under which Thai-originating goods are NOT entitled to a free rate of duty and the duty rates which apply. Schedule 7 is a list of tariff classifications under which Chilean originating goods are NOT entitled to a free rate of duty and the duty rates which apply. Schedule 8 is a list of tariff classifications under which AANZ originating goods are NOT entitled to a free rate of duty and the duty rates which apply.

6. What is the Australian Harmonized Export Commodity Classification? An Australian Harmonized Export Commodity Classification (AHECC) is an eight-digit code used to classify goods for export. The first six digits are part of an international classification standard (“the Harmonized System”) maintained by the World Customs Organization. The final two digits are specific to Australian exports and are used for statistical purposes. See PDF file

7. Tradex Scheme? The Tradex Scheme allows an importer to gain an up-front exemption from Customs duty and GST on eligible imported goods that are intended for export. The goods may be exported in the same condition as imported, subjected to a process or treatment after importation, then exported or incorporated in other goods which are exported. Export may be carried out by the importer or a third party.

8. Tradex Scheme? Tradex provides an alternative to the Customs Drawback Scheme which requires an up-front payment of Customs duty and GST and then the subsequent recovery of these taxes when the goods have been exported. The Tradex Scheme can, therefore, provide a significant cashflow benefit. The goods must be exported within 12 months of importation, although approval can be sought to extend this period. Customers are required to complete an application form for entrance into the Scheme.

9. Review Questions Customs Duty WTO Harmonisation Codes

10. Exercises Exercise 12.1

11. Reading and Resources Student Notes Lesson 12

12. The End of Lesson 12