EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510512
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.
Unilever Australasia Pty Ltd applied for a TCO in respect of certain Filler and Capper Line on 9 August 2005.
Instrument
TCO No 0510512 was made on 21 October 2005. It declares that those certain Filler and Capper Line 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. 0510512 is taken to have come into force on 9 August 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, establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0510512, introduced to address the need for tariff concessions on specific goods, was enacted to provide a lower rate of customs duty for these goods. This legislative instrument aims to facilitate the import of certain Filler and Capper Line by applying a 0% duty rate, as opposed to the general rate of 5%, provided no substitutable goods are produced in Australia. The instrument was made on 21 October 2005, and it came into force on 9 August 2005, the date the application was lodged. The Chief Executive Officer of Customs was satisfied that the application met the core criteria, and no objections were received from the public during the consultation period. The rights of importers are positively affected, as they may apply for a refund of duty on goods imported since the commencement date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0510512 under the Customs Act 1901 applies to the particular Filler and Capper Line goods for which Unilever Australasia Pty Ltd applied on 9 August 2005. The instrument was made by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria as outlined in the Act. The TCO benefits the specified goods by reducing their customs duty from the general rate of 5% to 0%. This instrument is part of a broader scheme under the Customs Act 1901 that allows for tariff concessions on certain goods, provided they meet specific criteria and are not specified in section 269SJ of the Act. The application of the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, except that it allows for a refund of duty on goods imported since the TCO came into force on 9 August 2005.
Key Provisions
The Customs Act 1901, particularly Part XVA, introduces a mechanism whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). These orders are designed to reduce the customs duty on specific goods. To qualify for a TCO, an applicant must meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The definitions for "substitutable goods" and "ordinary course of business" are detailed in sections 269D and 269E, respectively. If the CEO determines that these criteria are satisfied, a TCO is issued under section 269P(3), specifying the reduced duty rate.
Under the scheme, any individual or entity can apply for a TCO for goods not listed in section 269SJ, which details goods ineligible for tariff concessions. The CEO is obligated to evaluate each application against the core criteria and must make a written order if the application is deemed valid. Furthermore, upon receiving a valid application, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting public submissions on the proposed concession. The TCO, once issued, applies retroactively to the date of the application under subsection 269S(1).
Individuals or entities affected by the TCO must comply with its provisions, including adhering to the specified duty rates for the goods subject to the concession. Importers, in particular, may benefit by applying for duty refunds for goods imported since the TCO's effective date, as stipulated in paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights or liabilities of any person concerning actions taken before the TCO's registration date.
Failure to comply with the requirements of the Customs Act 1901, including the provisions for TCOs, may result in legal consequences. Offences under the Act can lead to both civil and criminal penalties. Civil penalties may include fines up to a maximum of $22,200 for individuals and $111,000 for corporations, depending on the severity and intent of the breach. Criminal penalties can result in imprisonment for up to five years, reflecting the seriousness of non-compliance. The precise penalties are determined based on the specific breach and the circumstances surrounding it.