EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602379
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.
O I Asia Pacific applied for a TCO in respect of certain glass bottle lehrs on 16 January 2006.
Instrument
TCO No 0602379 was made on 18 April 2006. It declares that those certain glass bottle lehrs 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. 0602379 is taken to have come into force on 16 January 2006.
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 was enacted to regulate the importation and exportation of goods, including the imposition and collection of customs duty. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aimed to address the need for tariff concessions on specific goods that could not be produced in Australia. The enactment body responsible for this legislation is the Parliament of Australia. The policy objective is to provide relief from customs duty on goods for which no suitable Australian-made alternatives exist, thus promoting fair trade and supporting economic efficiency. On 18 April 2006, Tariff Concession Order No. 0602379 was introduced, declaring that certain glass bottle lehrs would benefit from a tariff concession, reducing the duty rate from 5% to free, effective from 16 January 2006. This order was made following an application by O I Asia Pacific and subsequent satisfaction by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a TCO concerning goods, provided those goods are not specified in section 269SJ as ineligible. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. To qualify for a TCO, an applicant must demonstrate that no substitutable goods are produced in Australia at the time of application, as outlined in sections 269C and 269D. Once approved, the TCO provides a reduced or free rate of duty on the specified goods, effective from the date the application was lodged, without retroactively affecting any pre-existing rights or imposing liabilities on individuals or entities, other than the Commonwealth. The CEO is mandated to publish notices in the Gazette to allow for public submissions, although no submissions were received in the case of TCO No. 0602379 concerning glass bottle lehrs, which was approved on 18 April 2006.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are sections 269C, 269F, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question do not fall under the exclusions specified in section 269SJ. The CEO must then determine whether the application meets the core criteria, which are detailed in section 269C. If the application is deemed to meet these criteria, the CEO is required under section 269P to issue a written order declaring the goods to which the prescribed tariff concession applies.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs. Upon receiving a valid TCO application, the CEO must ensure that the application does not pertain to goods excluded under section 269SJ. The CEO is also obligated to verify that the core criteria specified in section 269C are satisfied, particularly ensuring that no substitutable goods are produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. This ensures transparency and provides an opportunity for objections to be raised.
Any breaches of the provisions under the Customs Act 1901 related to Tariff Concession Orders could lead to civil or criminal penalties, depending on the nature and severity of the offence. For instance, misrepresentation or fraudulent applications may be subject to criminal prosecution, which could result in fines or imprisonment. Under the Crimes Act 1914, offences involving deception or fraudulent activities could incur penalties of up to 10 years imprisonment, especially if the deception is substantial. Civil penalties might also be applicable, including fines or other sanctions, if a party fails to comply with the Act or misuses the tariff concessions. These penalties serve to deter non-compliance and ensure the integrity of the tariff concession scheme.