EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505158
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.
British American Tobacco Australia Ltd applied for a TCO in respect of certain Cigarette Filter Rod Makers on 4 May 2005.
Instrument
TCO No 0505158 was made on 16 September 2005. It declares that those certain Cigarette
Filter Rod Makers 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 0%.
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. 0505158 is taken to have come into force on 4 May 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 duty on imported goods. To address specific economic and trade policy objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the customs duty on certain imported goods, provided certain criteria are met. The Tariff Concession Instrument No. 0505158, made on 16 September 2005, is an example of such an order. It was introduced in response to an application by British American Tobacco Australia Ltd for a concession on certain Cigarette Filter Rod Makers, which resulted in a reduction of the duty rate from 5% to 0%. The instrument was made after determining that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a TCO. The policy objective behind this concession is to encourage the import of goods that are not domestically produced, thereby benefiting importers and potentially stimulating competition in the market.
Scope and Application
The Customs Act 1901, as amended, applies to all individuals and entities involved in the importation of goods into Australia, including businesses and importers. The Act establishes a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to reduce the rate of customs duty on certain goods. These orders are applicable to specific items specified in the Customs Tariff Act 1995, and in this case, relate to Cigarette Filter Rod Makers, as exemplified by Tariff Concession Instrument No. 0505158. This legislation has a national reach as it pertains to Commonwealth law. Exclusions apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act also allows for the extension and restriction of its application through subordinate instruments, although no such actions are mentioned in this particular context. The TCOs do not retroactively affect the rights of any person other than the Commonwealth and do not impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0505158, under the Customs Act 1901, focuses on the implementation of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not those specified in section 269SJ, which excludes certain items from concession eligibility. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, such as the absence of substitutable goods produced in Australia, a written TCO is issued. This particular TCO, number 0505158, applies to certain Cigarette Filter Rod Makers, reducing the customs duty from 5% to 0%, effective from the date the application was lodged, 4 May 2005, as per subsection 269S(1).
In terms of obligations, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties once a TCO application is accepted as valid, as per subsection 269K(1). This step ensures transparency and allows stakeholders to voice any concerns regarding the TCO. For this specific TCO, no submissions were received. The TCO also ensures that no existing rights of persons, other than the Commonwealth, are adversely affected by retroactively applying the concession. Importers, however, benefit from being able to apply for a refund of duties on goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Offences and penalties under the Customs Act 1901 for breaches related to TCOs are not explicitly detailed in the provided text. However, general provisions within the Act outline that any failure to comply with the terms of the TCO or misrepresentation in the application process could result in civil or criminal penalties. These penalties could include fines or imprisonment, depending on the severity and intent of the breach. The specific maximum penalties would be defined under other sections of the Act and associated regulations, but they are not specified in the provided text. The Act ensures that the TCO does not impose any new liabilities on individuals or entities, protecting them from any disadvantage arising from the concession.