EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611085
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.
Pharmapac Pty Ltd applied for a TCO in respect of certain cylindrical aluminium aerosol containers on 03 July 2006.
Instrument
TCO No 0611085 was made on 22 September 2006. It declares that those certain cylindrical aluminium aerosol 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 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. 0611085 is taken to have come into force on 03 July 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 Tariff Concession Instrument No. 0611085, enacted under the Customs Act 1901, was introduced to address the issue of granting tariff concessions for specific goods that are not produced in Australia, thereby ensuring fair competition and accessibility for these products. This instrument was developed in response to applications such as the one submitted by Pharmapac Pty Ltd for certain cylindrical aluminium aerosol containers, aiming to reduce the customs duty on these items from the general rate of 5% to free, facilitating easier access to these goods. The Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the administration of customs and excise duties, including the mechanism for tariff concession orders. The policy objective of this legislation is to ensure that imported goods that do not have domestic alternatives are subject to a lower customs duty, promoting economic efficiency and consumer access.
Scope and Application
The Tariff Concession Instrument No. 0611085 under the Customs Act 1901 applies specifically to certain cylindrical aluminium aerosol containers, which have been granted a tariff concession order by the Chief Executive Officer of Customs. The instrument pertains to entities and individuals involved in the importation of these containers, offering them a concession by reducing the customs duty from the general rate of 5% to free. The application of this tariff concession is governed by the core criteria outlined in section 269C of the Act, ensuring that no substitutable goods were produced in Australia on the date the application was lodged. The instrument’s jurisdictional reach is national, applying throughout Australia as it is a Commonwealth Act. The concession does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities. Additionally, the instrument extends its application through subordinate instruments, specifically referencing item 50 of Schedule 4 to the Customs Tariff Act 1995, which details the specific goods and their duty rates.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that the Chief Executive Officer (CEO) of Customs can issue. Under section 269F, an individual can apply to the CEO for a TCO concerning certain goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, they must then decide if the application meets the core criteria outlined in section 269C. To qualify, the application must demonstrate that, as of the date it was submitted, no substitutable goods were produced in Australia in the ordinary course of business. This is further defined in sections 269B, 269D, 269E, and 269P(3). If the CEO finds that the application meets these criteria, they must issue a written order (the TCO) that specifies the goods the application pertains to and declares that they are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties involved primarily revolve around the application process for a TCO. An applicant must ensure their application is valid and meets the specified criteria, particularly demonstrating that no substitutable goods were produced in Australia. The CEO has the responsibility of reviewing applications, making determinations based on the provided evidence, and issuing TCOs if the criteria are met. Moreover, the CEO must publish notices in the Gazette inviting submissions from any interested parties and consider these submissions in their decision-making process.
Failure to comply with the provisions of the Customs Act 1901 or any TCO may lead to various civil or criminal consequences. The Act does not explicitly outline specific offences or penalties for breaches of TCOs; however, general penalties for breaches of the Customs Act 1901 can include fines and imprisonment. For instance, under section 235, a person who knowingly or recklessly makes a false statement in a customs document can face a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, failure to comply with TCOs could potentially lead to financial penalties related to the duty owed on the goods if they were imported under incorrect tariff conditions.