EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505906
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.
Amcor St Regis Bates Australasia applied for a TCO in respect of certain flexible intermediate bulk food grade packaging containers on 16 May 2005.
Instrument
TCO No 0505906 was made on 23 September 2005. It declares that the certain flexible intermediate bulk food grade packaging 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 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. 0505906 is taken to have come into force on 16 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 Commonwealth Parliament, establishes a framework for the application of customs duties on imported goods, among other things. This framework includes the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that can lower the rate of customs duty on certain goods. Tariff Concession Instrument No. 0505906 was introduced to address the need for a concession on customs duties for specific goods, in this case, certain flexible intermediate bulk food grade packaging containers, to support Australian businesses in accessing competitively priced packaging solutions. The Tariff Concession Order was made after it was determined that no substitutable goods were produced in Australia, and no objections were raised against the concession, ensuring that the policy objective of providing tariff relief without disadvantaging existing rights or imposing new liabilities is met.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on specific goods imported into Australia. The scope of this legislation is confined to the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act allows for a lower rate of customs duty on goods specified in a TCO, provided that the application meets the core criteria stipulated in the Act. The process involves an application from a person to the CEO, who then determines if the application is valid and meets the criteria set out in sections 269C and 269SJ of the Act. Importantly, the Act excludes certain goods from TCO consideration, specifically those outlined in section 269SJ. The application of this legislation is national in scope, applying across all states and territories of Australia. The Tariff Concession Order No. 0505906, made on 23 September 2005, is an example of how the Act functions, providing tariff concessions for certain flexible intermediate bulk food grade packaging containers. The order came into force on the date the application was lodged, 16 May 2005, and does not affect any pre-existing rights or liabilities of individuals or entities, except to the benefit of importers who can apply for duty refunds.
Key Provisions
The main operative sections of this legislation, under the Customs Act 1901, pertain to Tariff Concession Orders (TCOs) as outlined in sections 269C, 269F, 269B, and 269P. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO, which is considered if the goods are not specified in section 269SJ. Section 269C stipulates that a TCO application must meet core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', while section 269P mandates the CEO to make a written order if the application meets the core criteria, declaring that the goods in question apply to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that the TCO application does not pertain to goods specified in section 269SJ of the Act and must verify that the core criteria are met. Once an application is accepted as valid, the CEO is obligated to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. In the case of TCO No. 0505906, the CEO did not receive any submissions in response to this notice. Furthermore, the CEO must consider the implications of the TCO on the rights of importers, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
The Act outlines several potential consequences for breach of its provisions. While the explanatory statement does not specify particular offences or penalties related to the issuance of TCOs, the Customs Act 1901 and related regulations may impose penalties for non-compliance with customs duties or for fraudulent activities. The general rate of duty on the goods subject to the TCO is 10%, and the TCO No. 0505906 reduces this rate to free, which could be subject to scrutiny and enforcement actions if not adhered to correctly. The rights of importers are protected, and any disadvantage caused to a person other than the Commonwealth would be avoided. The Act ensures that the TCO does not impose any liabilities on any person for actions taken before the TCO came into effect.