EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509832
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.
Gradual Pty Ltd applied for a TCO in respect of certain aluminium foil on 27 July 2005.
Instrument
TCO No 0509832 was made on 21 October 2005. It declares that those certain aluminium foils 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. 0509832 is taken to have come into force on 27 July 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 Parliament of Australia, provides a framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce the customs duty on certain goods. This legislative mechanism was introduced to address the need for tariff concessions to support specific sectors of the economy, particularly those where local production does not exist or where the importation of goods at a lower duty rate could benefit consumers and industries. The policy objective behind the TCO scheme is to ensure that Australian businesses and consumers can access goods at a reduced cost when there are no domestic alternatives, thus promoting competition and potentially lowering prices. The explanatory statement for Tariff Concession Instrument No. 0509832 outlines the process and criteria for making such concessions, specifically in the case of certain aluminium foils, where the duty rate was reduced from 5% to free, effective from the date the application was lodged, 27 July 2005.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia and is enforced by the Chief Executive Officer of Customs. This Act allows for the creation of Tariff Concession Orders (TCOs) that provide reduced rates of customs duty on specific goods, provided certain criteria are met. A TCO may be applied for under section 269F of the Act, and if approved, it effectively reduces the duty on the specified goods from the general rate to a rate specified in the TCO. This application process is governed by section 269C, which stipulates that a TCO can be issued only if no substitutable goods are produced in Australia at the time of the application. Section 269SJ of the Act excludes certain goods from being subject to a TCO. The application process also requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this particular TCO. The commencement date of the TCO is the date on which the application was lodged, and it does not retroactively affect any transactions before this date. The application of TCOs can be further detailed or modified through subordinate instruments as required.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine if the application meets the core criteria set out in section 269C. This requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must make a written TCO order declaring that the specified goods are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily centred around the application and review process for TCOs. The CEO is required to assess the validity of TCO applications, ensuring they meet the core criteria outlined in section 269C. Once an application is accepted, the CEO must publish a notice in the Gazette inviting any objections to the TCO, as stipulated in subsection 269K(1). Additionally, the CEO must consider any submissions received and make a final decision on whether to grant the TCO. In this case, the CEO did not receive any submissions opposing the TCO for certain aluminium foils.
Under the Customs Act 1901, breaches of the provisions regarding TCOs can lead to various penalties and consequences. However, the specific offences, penalties, or civil/criminal consequences are not detailed in this explanatory statement. It is likely that any breaches would be dealt with under the general administrative and compliance provisions of the Customs Act 1901, which could include fines or other penalties for non-compliance. The precise nature of these penalties would depend on the specific breach and relevant sections of the Act.
In summary, the Customs Act 1901 provides a framework for the creation of Tariff Concession Orders through applications to the CEO, subject to specific criteria. The CEO is tasked with assessing these applications and ensuring that the rights of all parties are protected. While the explanatory statement does not detail specific penalties for breaches, it is clear that compliance with the Act's provisions is crucial for all involved parties.