EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613834
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.
Techni-Chem Australia Pty Ltd applied for a TCO in respect of certain aluminium foil on 17 August 2006.
Instrument
TCO No 0613834 was made on 10 November 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. 0613834 is taken to have come into force on 17 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 the administration of customs and excise duties in Australia. Specifically, it introduces the mechanism for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. This legislative instrument was introduced to address the need for tariff relief on goods for which no substitutable Australian-made alternatives exist, thereby promoting competition and facilitating the importation of goods essential for various industries. The Tariff Concession Instrument No. 0613834, made on 10 November 2006, exemplifies this mechanism by granting a tariff concession on specific aluminium foil, reducing the customs duty from 5% to 0%. This legislative instrument was designed to ensure that Australian industries have access to necessary imported materials without the burden of high tariffs, thus aligning with the broader policy objective of supporting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0613834 applies to goods specified in the Instrument, namely certain aluminium foil, and the entities involved in their importation, such as importers and traders. It operates within the framework of the Customs Act 1901 and the Customs Tariff Act 1995, specifically under section 269F and Schedule 4, respectively. This legislation is applicable nationally and operates at a Commonwealth level. It is pertinent to note that the Instrument does not apply to goods specified in section 269SJ of the Act, which are those that cannot be subject to a Tariff Concession Order (TCO). The application of this Act can be extended or restricted through subordinate instruments, which may include regulations or further orders made by the Chief Executive Officer of Customs. The rights of any person other than the Commonwealth are not adversely affected by this Instrument, ensuring that it does not impose any liabilities on any individual or entity, nor does it disadvantage any person by retroactively applying to actions taken before its registration.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0613834 include section 269C (3) (referenced in parentheses), which sets out the core criteria for a Tariff Concession Order (TCO) application to be accepted by the Chief Executive Officer of Customs (CEO). According to this section, a TCO application is valid if, on the day the application was lodged, no goods that are substitutable for the goods in question were produced in Australia in the ordinary course of business. Additionally, section 269P (3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written TCO order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. This specific instrument, TCO No. 0613834, applies to certain aluminium foil, declaring that it is subject to item 50 of Schedule 4 of the Tariff, with a rate of duty reduced from 5% to 0%.
The obligations imposed by this Act on the parties it governs are primarily concerned with the application process for a TCO. The applicant must ensure that their application meets the core criteria as specified in section 269C (3) of the Customs Act 1901, which involves demonstrating that no substitutable goods are being produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO if they believe it should not proceed, as outlined in section 269K (1). In this particular case, the CEO did not receive any submissions against the TCO for certain aluminium foil.
In terms of offences, penalties, or civil/criminal consequences for breach, the Customs Act 1901 does not specify any particular sanctions for failing to comply with the conditions of a TCO. However, general provisions within the Act may apply to cases of non-compliance with customs regulations, potentially resulting in civil or criminal penalties. For example, section 247 of the Customs Act 1901 provides for a civil penalty of up to 10 penalty units for each offence where a person contravenes a provision of the Act. Additionally, section 248 imposes criminal penalties, including fines of up to 5,000 penalty units and imprisonment for up to five years, for serious breaches of the Act. However, it is important to note that these general penalties are not specifically related to TCOs and may not be directly applicable to breaches of the terms of a TCO.