EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515676
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.
Tetra Pak Marketing Pty Ltd applied for a TCO in respect of certain paperboard or plastic food and/or beverage containers cappers on 07 November 2005.
Instrument
TCO No 0515676 was made on 23 January 2006. It declares that those certain paperboard or plastic food and/or beverage containers cappers 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. 0515676 is taken to have come into force on 07 November 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. 0515676 was enacted in 2006 as part of the Customs Act 1901, with the purpose of providing tariff concessions on specific goods. This legislation was enacted by the Australian Government to address a gap in the existing customs duty framework, ensuring that certain imported goods are subject to reduced or no customs duty if they are not being produced domestically and there are no substitutable goods available in the Australian market. The policy objective is to facilitate the importation of goods that are not produced locally, thereby promoting competition and providing cost benefits to consumers. The instrument was created in response to an application by Tetra Pak Marketing Pty Ltd for tariff concessions on paperboard or plastic food and/or beverage containers cappers, following the prescribed process outlined in the Customs Act 1901.
The instrument was made by the Chief Executive Officer of Customs, who is responsible for deciding whether to grant tariff concession orders based on the criteria set out in the Act. This particular tariff concession order, No. 0515676, was made on 23 January 2006 and declared that the certain paperboard or plastic food and/or beverage containers cappers are goods to which a specific item in the Customs Tariff Act 1995 applies, with a resulting reduction in the general duty rate of 5% to free. The order came into effect on the date the application was lodged, 7 November 2005, and does not affect the rights of any person other than the Commonwealth. Importers of the affected goods will be able to apply for a refund of duty on goods imported since the date the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0515676 made under the Customs Act 1901 applies to specific paperboard or plastic food and/or beverage containers cappers, which are subject to a reduced rate of customs duty as declared by the Chief Executive Officer of Customs. This Act facilitates the application of tariff concessions to goods that are not produced in Australia and for which no substitutable goods are produced domestically, thus ensuring that Australian industries are not unduly disadvantaged. The instrument is effective from 07 November 2005, the date the application for the tariff concession order was lodged, and it applies nationally across Australia. Notably, the application of this concession does not affect any pre-existing rights or impose new liabilities on any person other than the Commonwealth, and it specifically benefits importers by allowing them to apply for refunds on duties paid on these goods since the commencement date of the concession. The CEO is required to publish notices in the Gazette to invite any interested parties to submit objections to the concession, although no objections were received in this instance. The scope of this Act is further extended and refined through subordinate instruments, which provide detailed criteria and definitions relevant to the application and interpretation of the concession.
Key Provisions
The Customs Act 1901 (the Act) includes provisions that allow for the creation of Tariff Concession Orders (TCOs) under section 269F. When a person applies for a TCO in respect of goods under this section, the Chief Executive Officer of Customs (the CEO) must consider whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring that the goods are subject to a prescribed rate of duty in the Customs Tariff Act 1995 (section 269P(3)). For example, in TCO No. 0515676, the CEO declared that certain paperboard or plastic food and/or beverage containers cappers are subject to a free rate of duty as no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must assess the application to determine if it meets the core criteria for a TCO, which involves verifying the absence of substitutable goods in Australia on the application date (section 269C). Secondly, the CEO must make a written order if the criteria are met and publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO. The TCO must also be backdated to the date the application was lodged (subsection 269S(1)).
Failure to comply with the requirements of the Act or the TCO may result in civil or criminal penalties. For instance, individuals or entities who do not adhere to the provisions regarding the application and processing of TCOs may face legal consequences. However, the explanatory statement does not specify the exact penalties for breach of the TCO provisions. The Act generally provides for fines and imprisonment for serious breaches, but the specific penalties depend on the nature and severity of the offence. The TCO itself, however, does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration to disadvantage that person or impose liabilities for actions taken before the registration date.