EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615760
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 Packaging (Australia) Pty Ltd applied for a TCO in respect of certain aluminium slugs on 12 October 2006.
Instrument
TCO No 0615760 was made on 22 December 2006. It declares that those certain aluminium slugs 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. 0615760 is taken to have come into force on 12 October 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 and provides a framework for managing customs and excise duties, among other things. To address the need for flexibility in the application of customs duties, Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This mechanism allows for the application of a lower rate of customs duty on specified goods, provided certain criteria are met. The Act specifically empowers the CEO to issue TCOs if an application is made and the application satisfies the core criteria, such as the absence of substitutable goods produced in Australia. This legislative framework aims to ensure that the application of tariff concessions is both fair and economically beneficial, as demonstrated by the case of Tariff Concession Instrument No. 0615760, which was enacted to provide a zero percent duty rate on certain aluminium slugs, thereby reducing the financial burden on the importer, Amcor Packaging (Australia) Pty Ltd.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on certain goods. The Act applies to entities or individuals seeking tariff concessions for goods not produced in Australia, provided the application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for such concessions. The scope of the Act is national, impacting importers of the specified goods across Australia. The Act’s application can be extended or restricted through subordinate instruments, ensuring that the regulatory framework is flexible enough to adapt to various economic and industrial needs. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it does not impose any new liabilities on these persons.
Key Provisions
The main operative sections of the Customs Act 1901, as referenced in this Tariff Concession Order (TCO) No. 0615760, include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order, as outlined in section 269P(3), specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This means that if the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C, a TCO may be issued. Additionally, sections 269B, 269D, and 269E define terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods," which are essential in evaluating whether the core criteria are met.
The Act imposes several obligations and requirements on the parties involved. For instance, section 269K(1) mandates that the CEO publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions in response to this invitation. Furthermore, section 269S(1) specifies that a TCO is taken to have come into force on the day the application for the TCO was lodged. In the context of TCO No. 0615760, this means it came into force on 12 October 2006. Additionally, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or imposed liabilities for actions taken before the TCO's effective date.
In terms of offences, penalties, and consequences for breach, the Act does not specify any criminal offences directly related to the issuance or application of a TCO. However, non-compliance with the conditions or misrepresentation in the application process could lead to civil consequences, such as the revocation of the TCO. While the Act does not explicitly state maximum penalties, breaches of related customs regulations, such as incorrect declarations or fraudulent claims, can result in substantial fines and, in severe cases, imprisonment. For example, under the Customs Act, misleading or false statements can lead to penalties of up to $22,000 or imprisonment for up to five years, depending on the severity of the offence. Therefore, it is crucial for applicants to ensure their submissions are accurate and truthful to avoid any adverse consequences.