EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504353
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.
Techni-Chem Australia Pty Ltd applied for a TCO in respect of certain aluminium food containers on 14 April 2005.
Instrument
TCO No 0504353 was made on 2 September 2005. It declares that those certain aluminium food 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 5%. The rate of duty for the goods subject to the TCO is free.
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. 0504353 is taken to have come into force on 14 April 2005.
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, enacted by the Australian Parliament, provides a framework for the regulation of imports and exports, including the imposition of customs duties. The Act includes provisions for the creation of Tariff Concession Orders (TCOs), which allow for reduced customs duties on specified goods under certain conditions. The Customs (Tariff Concession) Order No. 0504353, enacted in 2005, was introduced to address the issue of imposing lower customs duties on specific goods where there is no domestic production of substitutable goods. This order was created following an application by Techni-Chem Australia Pty Ltd for certain aluminium food containers, which led to a concession that lowered the duty on these goods from 5% to free, effective from the date the application was lodged. The policy objective of this legislation is to facilitate the import of goods where there is no domestic production of similar goods, thereby supporting industry competitiveness and consumer choice.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0504353, facilitates the application of lower rates of customs duty on specified goods, thereby providing economic relief to importers and consumers. This legislation applies to any person or entity that seeks to import goods eligible for a Tariff Concession Order (TCO), provided the goods are not listed in section 269SJ, which excludes certain items from eligibility. The application process requires that the Chief Executive Officer of Customs be satisfied that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D. If these criteria are met, the CEO is mandated to issue a TCO, reducing the duty on the specified goods, in this instance, certain aluminium food containers, from the general rate of 5% to free. This legislative instrument has a national reach across Australia, governed by Commonwealth law, and operates within the broader framework of the Customs Tariff Act 1995. The TCO does not affect existing rights or impose liabilities on any person for actions taken prior to its registration, thereby protecting stakeholders from retroactive disadvantage.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0504353 under the Customs Act 1901 (the Act) include section 269F, which allows an individual to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning certain goods (s. 269F). If the CEO determines that the application is valid and meets the core criteria outlined in sections 269C and 269P(3), a TCO will be issued, granting a reduced rate of customs duty on the specified goods. This is particularly detailed in section 269C, which stipulates that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, they must issue a written order declaring the goods subject to the TCO application.
Under the Act, the CEO has a clear set of obligations and requirements when handling TCO applications. Firstly, the CEO must ensure that the application pertains to goods not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO accepts the application as valid, they must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (s. 269K(1)). If no submissions are received, the CEO must decide whether the application meets the core criteria (s. 269C and s. 269P(3)). Once a decision is made, a written order must be issued, and the TCO will come into force on the day the application was lodged (s. 269S(1)).
In terms of consequences for non-compliance, the Act does not explicitly outline offences or penalties for breaches of the TCO provisions. However, any failure to adhere to the requirements or conditions of a TCO could potentially lead to civil or criminal consequences depending on the broader context of the Customs Act 1901 and related regulations. The specifics of any penalties would depend on the nature and severity of the breach, but it is clear that the Act aims to ensure that the benefits of a TCO are not unfairly exploited, and any misuse could result in legal action.