EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617303
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.
Progressive Group Australia Pty Ltd applied for a TCO in respect of certain bottling lines on 15 September 2006.
Instrument
TCO No 0617303 was made on 15 December 2006. It declares that those certain bottling lines 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 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. 0617303 is taken to have come into force on 15 September 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, facilitates the establishment of a tariff concession scheme where the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs). These orders provide a lower rate of customs duty on specified goods. This scheme was introduced to address the need for flexibility in customs duties, allowing for economic benefits by reducing costs for businesses that import specific goods, provided no substitutable goods are produced in Australia. The policy objective of this legislative framework is to encourage trade and investment by offering tariff concessions on imported goods under certain conditions, ultimately benefiting the economy by making imported goods more competitively priced. TCO No. 0617303, made on 15 December 2006, is an example of this scheme in action, providing a tariff concession on certain bottling lines, reducing the duty from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0617303, made under the Customs Act 1901, applies to goods specified in the instrument, in this case, certain bottling lines, and the entity that applied for the concession, Progressive Group Australia Pty Ltd. The Act provides a framework for the Chief Executive Officer of Customs to grant tariff concessions if specific criteria are met, such as the absence of substitutable goods produced in Australia. The instrument affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force, which is the date the application was lodged. The TCO operates within the national jurisdiction of Australia and does not impose any liabilities on persons other than the Commonwealth. Exclusions apply to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The instrument’s application may be extended or restricted through subordinate instruments, although this particular TCO does not alter the existing rights or impose new liabilities on any person.
Key Provisions
The main sections of the Customs Act 1901 pertinent to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F outlines the process for applying for a TCO, whereby a person can apply to the Chief Executive Officer of Customs (CEO) for a concession. If the application is not in respect of goods specified in section 269SJ, the CEO must determine whether the application meets the core criteria set out in section 269C. This section stipulates that the application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied with the application, they must make a written order (section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying the concessional duty rate.
The Act imposes certain obligations on both the CEO and applicants. The CEO is required to assess whether an application for a TCO meets the core criteria by ensuring that no substitutable goods were produced in Australia in the ordinary course of business. The applicant, on the other hand, must provide sufficient information to substantiate their claim that no substitutable goods are produced in Australia. Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to lodge submissions against the application (subsection 269K(1)). In the case of TCO No. 0617303, no submissions were received in response to this invitation.
In terms of consequences for breach or non-compliance, the Act does not explicitly outline offences or penalties for failing to meet the requirements of a TCO application. However, any incorrect application or misrepresentation of facts in an application could potentially lead to the TCO being revoked or challenged in court. The TCO itself does not impose any liabilities on any person and 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 in respect of anything done or omitted to be done before the date of registration. Importers of goods subject to a TCO may 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, under paragraph 126(1)(r) of the Regulations.