Tariff reductions and changes 1 January 2017

Tariff reductions and changes

Leonie Ferretter and Melissa McCosker explain the changes to tariff rules that will commence in 2017.

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On 23 November 2016, the Customs Tariff Amendment (2017 Harmonized System Changes) Bill 2016 and Customs Amendment (2017 Harmonized System Changes) Bill 2016 received Royal Assent, and on 24 November 2016, the Customs Tariff Amendment (Expanded Information Technology Agreement Implementation and Other Measures) Bill 2016 passed the Senate.

The collective impact of these Bills is to:

  • Bring into Australian law the 2017 changes to the International Convention on the Harmonized Commodity Description and Coding System (i.e. the Australian tariff);
  • Identify the appropriate import duties for biofuels and biofuel blends imported under the China – Australia Free Trade Agreement; and
  • Implement the World Trade Organization’s Expanded Information Technology Agreement (ITA), defining new tariff classifications for certain technology items and reducing duty rates on other items.

Most importers outsource their customs duty compliance obligations to third parties and may not have considered the impact of these changes on their business.

Creating a management plan for the changes

  • The implementation of the Expanded ITA provides further opportunities for reduced customs duty rates for importers of technology.
  • Businesses should plan in advance to take advantage of reduced duty rates effective 1 January 2017.
  • Planning can included delaying importations of non-critical product until after 1 January 2017 or placing goods into bonded warehouses until the duty reductions are implemented.
  • Organisations with in house Global Trade Software will need to accurately determine the tariff changes that come into effect in the Australian tariff on 1 January 2017 or risk misclassification of goods and possible over or under payments of duty.

Tariff advice rulings should be examined to determine whether they require updating to new tariff classifications.

If you have any questions about the changes please contact us.

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