EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605223
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.
Burgopak Asia Pacific Pty Ltd applied for a TCO in respect of certain packing containers on 14 March 2006.
Instrument
TCO No 0605223 was made on 2 June 2006. It declares that those certain packing containers 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. 0605223 is taken to have come into force on 14 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, enacted by the Parliament of Australia, provides a framework under which the Chief Executive Officer of Customs may make Tariff Concession Orders (TCOs), which apply lower rates of customs duty to specified goods. This legislative instrument, F2006L01752, addresses the need to provide tariff concessions on certain goods to promote economic efficiency and competitiveness. In this case, the instrument grants a zero percent duty rate on specific packing containers, recognising that these goods are not produced domestically and thus do not have substitutable alternatives available in Australia. The policy objective is to facilitate the import of these goods by reducing the duty burden, thereby encouraging trade and economic activity. The instrument became effective on the date the application was lodged, 14 March 2006, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) mechanism, applies to any person or entity seeking to import goods into Australia that are subject to a TCO, with the aim of reducing the duty payable on those goods. The Act operates within the national jurisdiction of the Commonwealth, and its application extends to any goods for which a TCO has been granted by the Chief Executive Officer of Customs (CEO) under section 269F. A TCO is applicable to goods that are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions, and where the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business, as per sections 269C and 269D of the Act. The application of the Act can be extended or refined through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to various goods. The TCO in question, No. 0605223, applies specifically to certain packing containers, reducing the customs duty from the general rate of 5% to 0%. This order came into force on the date the application was lodged, 14 March 2006, and does not impose any liabilities or adversely affect the rights of any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0605223 (the Instrument) under the Customs Act 1901 (the Act) are sections 269C, 269F, and 269P(3). Section 269F of the Act allows for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (the CEO) for certain goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order (a TCO) specifying the goods to which the concession applies, under section 269P(3). The Instrument itself declares that certain packing containers are subject to a 0% duty rate, which is a reduction from the general rate of 5%, effective from the date the application was lodged, 14 March 2006.
The Act imposes specific obligations on the CEO regarding the assessment and processing of TCO applications. The CEO must determine whether an application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. This assessment ensures that the concession is granted only when it is justified. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO. This transparency mechanism ensures that all stakeholders have the opportunity to voice their concerns before the TCO is granted.
Failure to comply with the provisions of the Act and the Instrument may lead to civil or criminal consequences. While specific penalties are not detailed in the explanatory statement, breaches of customs laws generally can result in fines and other penalties. For example, providing false or misleading information in a TCO application could lead to substantial fines under the Customs Act 1901. Additionally, any person found to be engaging in fraudulent activities related to the importation of goods may face criminal charges, which could result in imprisonment. The seriousness of the penalties underscores the importance of adhering to the legal requirements set out in the Act and the Instrument.
The Instrument also ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO. Specifically, it states that the TCO does not impose any new liabilities on any person and does not disadvantage anyone regarding actions taken before the TCO was registered. Importers of the affected goods can apply for a refund of duties paid on those goods since the effective date of the TCO, further protecting their interests. This provision ensures that the concession benefits are fairly distributed and does not unfairly burden any party.