EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602954
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.
Phillip Morris Ltd applied for a TCO in respect of certain cigarette buffers and/or conveyors parts on 3 March 2006.
Instrument
TCO No 0602954 was made on 5 May 2006. It declares that those certain cigarette buffers and/or conveyors parts 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. 0602954 is taken to have come into force on 3 March 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 provides a framework for the application of Tariff Concession Orders (TCOs) through Part XVA, which was enacted to streamline the process by which certain goods may receive reduced customs duty rates. The legislation was introduced by the Commonwealth Parliament to address the need for a more efficient mechanism to manage tariff concessions, ensuring that the application process is clear and that the rights of all stakeholders are protected. This Act empowers the Chief Executive Officer of Customs to assess and approve applications for TCOs, provided the goods in question meet specific criteria such as the absence of substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0602954, made under this Act, details an instance where Phillip Morris Ltd successfully applied for a tariff concession on certain cigarette buffers and/or conveyors parts, resulting in a duty rate reduction from 5% to 0%. The process involved public consultation, which in this case, did not elicit any objections, thereby facilitating the concession’s enactment from the date of the application.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) mechanism, applies to any person who wishes to import goods that are not currently produced in Australia in the ordinary course of business and are therefore eligible for a lower rate of customs duty. The Act, which is a Commonwealth statute, provides the framework under which the Chief Executive Officer of Customs can make TCOs, thereby granting tariff concessions on specific goods. These concessions are subject to certain core criteria as outlined in the Act, such as the absence of substitutable goods being produced in Australia. The application process includes a public notification step where interested parties can object to the concession if they deem it inappropriate. The TCO No. 0602954, for example, pertains specifically to certain cigarette buffers and conveyor parts and was made effective from the date of application, 3 March 2006, without any submissions against it. This instrument effectively lowers the duty on these specific goods from a general rate of 5% to 0%, benefiting importers who can also apply for refunds on duties paid prior to the TCO's effective date.
Key Provisions
The key operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0602954, establish the framework for granting tariff concessions on specific goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application meets the core criteria outlined in sections 269C and 269P(3), a TCO will be issued. This order declares that the specified goods are subject to a reduced rate of customs duty, as detailed in Schedule 4 of the Customs Tariff Act 1995. In this case, TCO No. 0602954, issued on 5 May 2006, applies a 0% duty rate to certain cigarette buffers and/or conveyors parts, as these goods are now subject to item 50 of Schedule 4.
The Act imposes several obligations on the parties involved. The CEO is required to assess whether the application for a TCO meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). For this particular TCO, no submissions were received, thereby allowing the CEO to proceed with the order. The Act also mandates that the TCO comes into effect on the date the application was lodged (subsection 269S(1)), in this case, 3 March 2006.
In terms of the consequences of non-compliance, the Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for breach of the TCO provisions within the explanatory statement provided. However, breaches of related customs regulations or failure to comply with the terms of the TCO could potentially lead to civil or criminal penalties under other sections of the Customs Act or associated regulations. These penalties might include fines or imprisonment, depending on the severity of the breach. The specifics of such penalties would need to be referred to in the broader legislative context.
Overall, the Tariff Concession Instrument No. 0602954 facilitates a streamlined process for applying and granting tariff concessions on certain goods, ensuring that importers can benefit from reduced customs duties without any retroactive liabilities. The legislative framework ensures transparency and fairness in the application process, while the absence of submissions in this instance underscores the effectiveness of the CEO's decision-making process.