EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617925
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.
Pharmapac Pty Ltd applied for a TCO in respect of certain aerosol cans on 25 October 2006.
Instrument
TCO No 0617925 was made on 5 January 2007. It declares that those certain aerosol cans 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. 0617925 is taken to have come into force on 25 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, enacted by the Commonwealth Parliament, establishes a framework for the imposition of tariffs on imported goods. It allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. This mechanism was introduced to address the issue of ensuring that Australian industries remain competitive by reducing the tariff burden on certain imported goods that cannot be produced domestically. The Tariff Concession Instrument No. 0617925, made on 5 January 2007, is an example of this process in action, whereby Pharmapac Pty Ltd successfully applied for a TCO on certain aerosol cans, reducing the duty from 5% to 0%. This concession does not affect any existing rights or liabilities and is effective from the date the application was lodged, 25 October 2006, benefiting the rights of importers who can claim duty refunds for imports made since that date.
Scope and Application
The Tariff Concession Instrument No. 0617925 applies to goods that are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, it applies to the aerosol cans for which Pharmapac Pty Ltd made an application. This Act applies to persons or entities that are directly involved in the import of these specified goods, and it affects the rate of customs duty applicable to them. The instrument is part of a broader scheme under which the CEO of Customs can make TCOs, allowing for lower rates of customs duty on certain goods if they meet specific criteria. The instrument has a national reach, as it is enacted under Commonwealth legislation. The exclusions are limited to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on anyone. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework through which the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) (sections 269C and 269F). These orders allow for a lower rate of customs duty on specific goods. An application for a TCO must be made by a person to the CEO, who then assesses whether the application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions for key terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D, 269E, and 269B. If the application meets these criteria, the CEO must make a written order that specifies the goods subject to the concession and the applicable duty rate.
The obligations imposed on the CEO under the Act include accepting a TCO application, determining whether it meets the core criteria, and publishing a notice in the Gazette if the application is accepted as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0617925, no submissions were received in response to the published notice. Additionally, the Act requires that a TCO does not affect the rights of any person, other than the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO's effective date (subsection 269S(1)).
In terms of legal consequences, while the Act does not explicitly state civil or criminal penalties for breaching the provisions regarding TCOs, failure to comply with the conditions or obligations could potentially lead to disputes or legal actions regarding the duty rates and rights of importers. For example, an incorrect application or the issuance of a TCO without meeting the core criteria could result in disputes over the duty rates or eligibility for refunds, as importers may seek remedies under section 126 of the Regulations. The penalties and consequences for such breaches would depend on the specific nature of the non-compliance and the judicial interpretation of the Act in such contexts.