EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411497
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Ausker Pacific Pty Ltd applied for a TCO in respect of certain flexible intermediate bulk containers on 3 November 2004.
Instrument
TCO No 0411497 was made on 21 January 2005. It declares that those certain flexible intermediate bulk containers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 10%. The rate of duty for the goods subject to the TCO is 3%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0411497 is taken to have come into force on 3 November 2004.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to regulate the importation and exportation of goods in Australia and to provide for the collection of customs duty. In addressing the need for tariff concessions for specific goods, the Act introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0411497, introduced in 2005, exemplifies this scheme by reducing the customs duty on certain flexible intermediate bulk containers from 10% to 3%. The instrument was developed in response to an application by Ausker Pacific Pty Ltd, and it aims to provide tariff concessions for goods not produced in Australia, thereby benefiting importers without imposing liabilities on others. The process involves consultation as outlined in the Act, though no submissions were received in response to the published notice. The TCO took effect on the date of application, 3 November 2004, and does not disadvantage any person other than the Commonwealth, allowing importers to seek duty refunds for imports made since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0411497, established under Part XVA of the Customs Act 1901, applies to specific goods, in this case, certain flexible intermediate bulk containers, for which Ausker Pacific Pty Ltd applied on 3 November 2004. This Instrument was enacted to provide a lower rate of customs duty for these goods, reducing the general rate from 10% to 3%. The primary criterion for the application of a Tariff Concession Order (TCO) is the absence of substitutable goods produced in Australia in the ordinary course of business, as per section 269C of the Act. The Instrument ensures that the concessional tariff applies only when no such Australian-made substitutes exist. The TCO's geographic reach is aligned with the national application of the Customs Act 1901, thus it applies throughout Australia. The Act does not specify any exclusions or exemptions related to this particular TCO, and its effect is limited to the goods specified in the order, commencing on the date the application was lodged. The Chief Executive Officer of Customs is required to publish a notice in the Gazette to invite objections, although no submissions were received for this particular TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0411497, issued under the Customs Act 1901, relate to the establishment of a Tariff Concession Order (TCO) for certain flexible intermediate bulk containers. Specifically, section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO, and section 269C outlines the criteria for the CEO to consider when deciding whether to grant the application. If the CEO is satisfied that the application meets the core criteria, as defined in section 269C, they must issue a TCO under section 269P(3). This TCO, in this case, applies a reduced rate of duty to the specified goods.
The obligations imposed by this Act on the parties it governs are primarily on the CEO of Customs. The CEO must ensure that any TCO application is assessed against the criteria specified in the Act. This includes verifying that no substitutable goods are produced in Australia at the time of application, as defined by sections 269D and 269E. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as required by section 269K(1). In this instance, no submissions were received in response to the notice, indicating that the CEO proceeded with the TCO based on the available information.
The Act also outlines potential consequences for non-compliance with its provisions. Although specific offences, penalties, or consequences are not detailed in this excerpt, the general framework of the Customs Act 1901 implies that breaches of its provisions could lead to civil or criminal penalties. These may include fines, imprisonment, or other sanctions as stipulated by the broader legislative context. The exact penalties would depend on the nature and severity of the breach, as well as any relevant case law and statutory provisions.
It is also important to note that the TCO does not adversely affect the rights of any person other than the Commonwealth. This is outlined in section 269S(1), which states that a TCO comes into force on the date the application was lodged, not the date of registration. This means that importers can apply for a refund of duty on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations. This provision ensures that the rights of importers are not prejudiced by the application of the TCO, thereby maintaining fairness and legal certainty within the customs regime.