EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602770
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 aerosol container propellant fillers on 20 January 2006.
Instrument
TCO No 0602770 was made on 7 April 2006. It declares that those certain aerosol container propellant fillers 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. 0602770 is taken to have come into force on 20 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, enacted by the Australian Parliament, was amended to include the scheme for Tariff Concession Orders (TCOs) through Part XVA. This scheme was introduced to address the need for reducing customs duty on specific goods under certain conditions, thereby encouraging trade and economic efficiency. The core objective of this legislative framework is to provide a mechanism for businesses to apply for tariff concessions on imported goods, provided that no substitutable goods are produced in Australia. The Customs Act empowers the Chief Executive Officer of Customs to grant these concessions, subject to the criteria set out in sections 269C, 269B, and 269D. The policy objective is to facilitate smoother trade operations and lower costs for businesses by potentially eliminating or reducing customs duty on specified goods, thereby fostering a competitive business environment.
Scope and Application
The Tariff Concession Instrument No. 0602770 under the Customs Act 1901 applies to specific aerosol container propellant fillers for which Unilever Australasia Pty Ltd applied for tariff concessions. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods if certain criteria are met. The application for this TCO was lodged on 20 January 2006, and the instrument was made on 7 April 2006. The TCO applies to the goods from the date the application was lodged, effectively reducing the duty rate from 5% to 0%. This Act applies to any entity or person involved in the importation of the specified goods, and its application is national in scope, administered under Commonwealth law. However, it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. The CEO must consult with the public when accepting a TCO application, although in this case, no submissions were received in response to the published notice. The Act's application may be extended or modified through subordinate instruments, ensuring its adaptability to changes in trade practices and economic conditions.
Key Provisions
The Tariff Concession Order No. 0602770, made under section 269F of the Customs Act 1901, applies to certain aerosol container propellant fillers and specifies that these goods are subject to a 0% duty rate, as opposed to the general 5% duty rate (section 269P(3)). This concession is contingent on the Chief Executive Officer (CEO) of Customs being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as outlined in section 269C. The application must also not pertain to goods specified in section 269SJ, which are ineligible for such concessions.
The Act imposes certain obligations on parties applying for a Tariff Concession Order (TCO). An applicant must ensure that the goods in question do not have substitutable alternatives produced in Australia (section 269C). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions if any party believes the TCO should not proceed (subsection 269K(1)). The CEO must then consider any submissions received and decide whether to proceed with the TCO based on the core criteria. In this instance, no submissions were received, allowing the CEO to proceed with the order.
Failure to comply with the requirements of the Customs Act 1901 or the Tariff Concession Order could result in civil or criminal penalties. Although specific penalties are not detailed in the explanatory statement, breaches of the Customs Act generally can result in substantial fines and, in severe cases, imprisonment. The precise penalties depend on the nature and severity of the breach, with the Act providing a framework for enforcement actions to be taken against those who do not comply with its provisions.
The Tariff Concession Order No. 0602770 came into effect on 20 January 2006, the date the application was lodged (subsection 269S(1)). This means that from that date, the specified aerosol container propellant fillers are eligible for the concessional duty rate of 0%. Importantly, this order does not retroactively affect the rights of any person, including importers, who may now apply for duty refunds on goods imported since the effective date (paragraph 126(1)(r) of the Regulations). Furthermore, the TCO does not impose any new liabilities on any person, ensuring that only the rights of importers are beneficially affected.