EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613257
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.
Amcor Fibre Packaging applied for a TCO in respect of certain corrugated carton board formers on 8 August 2006.
Instrument
TCO No 0613257 was made on 3 November 2006. It declares that those certain corrugated carton board formers 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. 0613257 is taken to have come into force on 8 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, enacted by the Australian Parliament, provides a framework for administering customs duties and tariffs. One of the key provisions is Part XVA, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duties on specified goods. This legislation was introduced to address the need for flexibility in customs duties to support trade and economic policy objectives, particularly by allowing the reduction of duties on goods for which no suitable Australian-produced alternatives exist. In this context, Tariff Concession Instrument No. 0613257 was made to provide a zero percent duty rate on certain corrugated carton board formers, effective from 8 August 2006, following an application by Amcor Fibre Packaging. This measure was intended to benefit importers by reducing their duty liabilities and aligning with the policy objective of promoting fair trade practices.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, applying to individuals and entities that apply for a concession on customs duty for certain imported goods. This Act applies at the Commonwealth level, and it extends to any goods that are not specified in section 269SJ of the Act, which outlines goods that are ineligible for a tariff concession. The Act specifies that a TCO may be granted if, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business, with detailed definitions provided for key terms such as 'substitutable goods' and 'ordinary course of business'. Additionally, the Act mandates that the CEO must publish a notice in the Gazette after accepting a TCO application as valid, inviting any interested parties to submit objections. The TCO, once registered, does not affect the rights of any person other than the Commonwealth as at the date of registration, and it allows importers to apply for a refund of duty on goods imported since the TCO's effective date. The application and effectiveness of the TCO are further detailed in the subsidiary Customs Tariff Act 1995 and the Customs Regulations 1999, which provide the framework for the imposition of duties and concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0613257 (subsection 269P(3) of the Customs Act 1901) dictate that if the Chief Executive Officer of Customs (CEO) is satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria, they must issue a written order declaring that the goods specified in the application are subject to a lower rate of customs duty. This provision allows for the application of a reduced tariff rate on certain goods, in this case, certain corrugated carton board formers, which are subject to a 0% duty rate instead of the general 5% rate.
The obligations imposed on the parties under this legislation are primarily on the CEO of Customs, who must assess TCO applications to ensure they meet the core criteria. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged (section 269C of the Act). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1) of the Act). For applicants like Amcor Fibre Packaging, the obligation is to provide sufficient information and evidence to satisfy the CEO that the goods qualify for the concession.
In terms of consequences for breach, the Act does not specify explicit offences or penalties related to the making of TCOs. However, any misrepresentation or provision of false information in the application process could potentially lead to legal challenges or administrative reviews if it is found that the application did not genuinely meet the criteria. The legislation ensures that the TCO does not retroactively affect the rights of any person or impose new liabilities on them, safeguarding against any adverse impact on importers or other stakeholders.
The TCO itself, while beneficial to the rights of importers by potentially allowing them to apply for duty refunds on goods imported since the TCO came into effect, does not impose any liabilities on any person. It is designed to provide tariff relief without creating new obligations or disadvantages for individuals or entities other than the Commonwealth.