EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508478
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.
Sonoco Composite Cans Pty Ltd applied for a TCO in respect of certain Aluminium Foil on 29 June 2005.
Instrument
TCO No 0508478 was made on 9 September 2005. It declares that those certain Aluminium Foil 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. 0508478 is taken to have come into force on 29 June 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 Tariff Concession Instrument No. 0508478, enacted in 2005 under the Customs Act 1901, aims to facilitate tariff concessions for specific goods by reducing customs duties. This instrument was introduced to address the need for a streamlined process for applying and granting tariff concessions, ensuring that certain goods benefit from reduced duty rates when they are not produced domestically or have no substitutable goods available in Australia. Enacted by the Chief Executive Officer of Customs, the instrument seeks to achieve the policy objective of promoting fair trade practices and economic efficiency by providing duty relief on imported goods that are not domestically produced. The instrument was introduced following an application by Sonoco Composite Cans Pty Ltd for tariff concessions on certain Aluminium Foil, leading to a reduction of the duty rate from 5% to 0%.
Scope and Application
The Tariff Concession Instrument No. 0508478 under the Customs Act 1901 applies to any person or entity that imports specified goods for which a Tariff Concession Order (TCO) has been issued by the Chief Executive Officer of Customs. The Act specifically pertains to goods that qualify for a lower rate of customs duty as determined by the CEO, provided the goods meet the criteria set out in the Act and are not excluded under section 269SJ. The geographic reach of this legislation is national, applying across the Commonwealth of Australia. The application of this Act is not limited by state or territory boundaries, thus encompassing all importers operating within Australia. The Act does not specify any exclusions, exemptions, or thresholds other than those outlined in section 269SJ. The Act’s application may be extended or restricted through subordinate instruments, which could include regulations or further orders made by the CEO in accordance with the Customs Act 1901.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to the Tariff Concession Instrument No. 0508478 (the Instrument) are sections 269C, 269F, and 269P. Section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, while section 269C outlines the core criteria that must be met for the CEO to consider making a TCO. Specifically, section 269C requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, section 269P mandates the CEO to make a written TCO.
The obligations imposed by the Act on the parties governed by it include the requirement for applicants to ensure that their applications are made in accordance with the Act's provisions. For instance, applicants must verify that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated by section 269C. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). The CEO must also decide whether to make a TCO if the application meets the core criteria, as outlined in section 269P. Once a TCO is made, it applies to the goods from the date the application for the TCO was lodged, as per subsection 269S(1).
The Act provides for specific civil and criminal consequences in the event of non-compliance with its provisions. While the Explanatory Statement does not specify detailed penalties for breaches, it is implicit that any actions that contravene the conditions set out in the Act, such as submitting false information in an application for a TCO, could lead to legal repercussions. Typically, under Australian law, such breaches might result in fines or other penalties as prescribed by the relevant legislation. The exact penalties would depend on the nature and severity of the breach, and could potentially involve both civil and criminal liability, depending on the context and the discretion of the court.
The Instrument No. 0508478 specifically addresses the application for a TCO in respect of certain Aluminium Foil by Sonoco Composite Cans Pty Ltd. The Instrument declares that these specific Aluminium Foil are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, with a reduced rate of duty from 5% to 0%. This reduction in duty is effective from the date the TCO application was lodged, 29 June 2005. The CEO’s satisfaction that no substitutable goods were produced in Australia on that date led to the issuance of this TCO, benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.