EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613061
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.
Techpack Pty Ltd applied for a TCO in respect of certain aluminium laminate foil on 04 August 2006.
Instrument
TCO No 0613061 was made on 27 October 2006. It declares that those certain aluminium laminate foil are goodsis a product 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. 0613061 is taken to have come into force on 04 August 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 enacted by the Australian Parliament to provide a framework for the regulation of customs and excise duties, including the imposition and collection of such duties. It was introduced to address the need for a systematic approach to managing imports and exports, ensuring revenue collection, and protecting domestic industries. Part XVA of the Act establishes the scheme for Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods, provided that specific criteria are met. The policy objective is to encourage the production of goods within Australia by offering tariff relief where no substitutable goods are produced domestically.
The Tariff Concession Instrument No. 0613061, made on 27 October 2006, is an example of this scheme in action. Techpack Pty Ltd applied for a TCO for certain aluminium laminate foil on 4 August 2006, and the CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria. Consequently, the CEO made a TCO that applied a free rate of duty on these goods, down from the general rate of 5%. The instrument does not disadvantage any person other than the Commonwealth and allows importers to apply for a refund of duty paid on imports since the TCO's effective date.
Scope and Application
The Customs Act 1901, as outlined in the Explanatory Statement for Tariff Concession Instrument No. 0613061, applies to any entity or individual seeking tariff concessions for specified goods, such as certain aluminium laminate foil in this case. The Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that lower the rate of customs duty on goods, provided certain criteria are met, including that no substitutable goods are produced in Australia. The application of this legislation is not limited to a specific geographic or jurisdictional area, as it falls under the Commonwealth’s purview. However, it is pertinent to note that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person. This legislation extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty on goods.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0613061 under the Customs Act 1901 (section 269F) require the Chief Executive Officer (CEO) of Customs to consider applications for Tariff Concession Orders (TCOs) that lower the customs duty rate on certain goods. Section 269C outlines the core criteria for determining if an application meets the requirements for a TCO, which includes ensuring no substitutable goods are produced in Australia on the date the application is lodged (section 269D). If the CEO is satisfied that the application meets these criteria, they must make a written TCO as per section 269P(3), specifying the new lower rate of duty for the goods.
The obligations imposed on parties under this Act include the requirement for the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (section 269K(1)). In this case, Techpack Pty Ltd applied for the TCO on 4 August 2006, and no submissions were received opposing the order. Furthermore, the CEO must ensure that the TCO does not affect the rights of any person other than the Commonwealth adversely (section 269S(1)). The TCO is effective from the date the application was lodged, in this instance, 4 August 2006.
Any breaches of the provisions under the Customs Act 1901 may result in both civil and criminal consequences. For example, providing false information in an application for a TCO can result in penalties, including fines up to the statutory maximum as prescribed by the Act. The severity of penalties may depend on the nature and extent of the breach. Additionally, any party that fails to comply with the TCO or other regulations may be subject to further administrative actions, including the imposition of additional duties or forfeiture of the goods involved.