EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612052
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.
Auscap Pty Ltd applied for a TCO in respect of certain aluminium foil on 18 July 2006.
Instrument
TCO No 0612052 was made on 13 October 2006. It declares that those certain aluminium foil 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. 0612052 is taken to have come into force on 18 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 Customs Act 1901 was amended to include Part XVA, which provides the framework for Tariff Concession Orders (TCOs), enabling the Chief Executive Officer of Customs to apply a lower rate of customs duty to certain goods, as enacted by the Australian Parliament. This amendment was introduced to address the need for a mechanism that allows for the tariff relief on specific goods under certain conditions, thereby facilitating trade and potentially encouraging production or import of particular goods. The policy objective, as stated in the explanatory statement, is to ensure that when a TCO application is deemed to meet the core criteria, the CEO is mandated to issue a written order that effectively reduces the duty on the specified goods. This particular instrument, Tariff Concession Instrument No. 0612052, was made on 13 October 2006, providing a zero percent duty rate on certain aluminium foil, effective from 18 July 2006, following Auscap Pty Ltd's application and the CEO's determination that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901 applies to all persons and entities involved in the import and export of goods in Australia, governing the process of customs duty application and tariff concession orders. Specifically, under Part XVA of the Act, the Chief Executive Officer of Customs has the authority to make Tariff Concession Orders (TCOs) for goods, which reduce the customs duty rate for those goods. This process is applicable to all goods except those specified in section 269SJ of the Act, which cannot be subject to a TCO. For a TCO to be issued, the CEO must be satisfied that the application meets the core criteria, notably that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The geographic reach of the Act is national, applying uniformly across all states and territories of Australia. The instrument TCO No. 0612052, concerning certain aluminium foil, was made under this framework, reducing the duty rate from 5% to 0% after a successful application by Auscap Pty Ltd. The TCO does not impose any liabilities on any person and ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) concerning Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application meets the core criteria, which are defined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed tariff concession (section 269P). Section 269S governs the coming into force of the TCO, which is deemed to have commenced on the day the application was lodged. This means that the tariff concessions are effective from the date of application, not from the date of the order itself.
The Act imposes specific obligations on both applicants and the CEO. For applicants, the obligation is to ensure that their application for a TCO meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, on the other hand, is obligated to assess the application against these criteria and, if satisfied, make a TCO. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0612052, no submissions were received, and the TCO was issued accordingly.
The Act does not explicitly outline specific offences or penalties for breaches of the TCO provisions within the explanatory statement. However, it is implied that non-compliance with the terms of a TCO, or misrepresentation in an application, could potentially lead to administrative consequences. These could include the revocation of the TCO, fines, or other penalties as prescribed under the relevant customs or administrative laws. Additionally, any failure to adhere to the conditions of the TCO could result in civil or criminal liability under broader provisions of the Customs Act or other applicable legislation, although such penalties are not detailed in this explanatory statement.
TCO No. 0612052 specifically applies to certain aluminium foil, reducing the customs duty rate from 5% to 0%. This tariff concession is effective from 18 July 2006, the date the application was lodged. The TCO does not retroactively affect any transactions that occurred before this date, ensuring that the rights of importers are beneficially affected from the commencement date. Importers can apply for a refund of duty on goods imported since this effective date under the provisions of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth.