EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505971
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 foil on 20 May 2005.
Instrument
TCO No 0505971 was made on 23 September 2005. It declares that the certain aluminium foil is a product 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. 0505971 is taken to have come into force on 20 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 the legal framework for the administration of customs duties and other taxes. Specifically, Part XVA of the Act introduces the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This scheme was designed to address the need for flexible tariff arrangements that can respond to specific economic and trade circumstances, particularly in cases where no substitutable goods are produced domestically. The Explanatory Statement for Tariff Concession Instrument No. 0505971 details the process and criteria for making such orders, including the requirement that no substitutable goods be produced in Australia for the goods in question. In this instance, Techni-Chem Australia Pty Ltd applied for a TCO for certain aluminium foil, and the CEO determined that a TCO was warranted as no substitutable goods were produced in Australia. The resulting Tariff Concession Instrument No. 0505971 effectively granted a duty concession on these goods, which were otherwise subject to a 5% duty rate, by applying a free rate under the specified item in the Customs Tariff. The policy objective underpinning this instrument is to facilitate trade by reducing the duty burden on imported goods where no domestic alternatives exist, thus promoting economic efficiency and competitive neutrality.
Scope and Application
The Tariff Concession Instrument No. 0505971 is an instrument under Part XVA of the Customs Act 1901, which facilitates the application of lower customs duty rates to certain goods through the creation of Tariff Concession Orders (TCOs). This instrument specifically applies to Techni-Chem Australia Pty Ltd's application for certain aluminium foil, which was accepted by the Chief Executive Officer of Customs, leading to a declaration that this type of aluminium foil is subject to a free rate of duty instead of the general rate of 5%. The Act applies to any person or entity that seeks to import goods eligible for a TCO, provided that the goods are not specified in section 269SJ of the Customs Act, which lists those ineligible for tariff concessions. The application of this Act is national in scope, as it is an instrument of the Commonwealth and applies uniformly across Australia. The Act's application may be further refined or extended through subordinate instruments, such as regulations or further orders, although the primary application remains governed by the terms of the Customs Act 1901 and the specific criteria set out for making TCOs.
Key Provisions
The primary sections of the Customs Act 1901, particularly sections 269C, 269F, 269P, and 269S, outline the process and criteria for granting Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods. Section 269C stipulates that an application meets the core criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these core criteria, they must issue a TCO, as outlined in section 269P. Section 269S provides that a TCO is considered to have come into force on the day the application was lodged.
The obligations imposed on parties by this legislation are primarily on the CEO of Customs. The CEO must assess TCO applications to ensure they meet the core criteria specified in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who might oppose the granting of a TCO. If no submissions are received, the CEO must proceed to grant the TCO. This process ensures transparency and allows stakeholders to voice their concerns.
In terms of consequences for breach, the Customs Act 1901 does not explicitly state offences, penalties, or civil or criminal consequences for failing to comply with the provisions regarding TCOs. However, non-compliance with customs regulations generally can result in penalties such as fines or legal action. The specific penalties would depend on the nature and severity of the breach, and would be governed by broader customs and administrative laws rather than this specific piece of legislation. The Act ensures that the rights of individuals and entities are protected by stipulating that the TCO does not affect any pre-existing rights or impose new liabilities on anyone other than the Commonwealth.