EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620096
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 applied for a TCO in respect of certain bottling lines on 28 December 2006.
Instrument
TCO No 0620096 was made on 16 March 2007. 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. 0620096 is taken to have come into force on 28 December 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 Tariff Concession Instrument No. 0620096, enacted under the Customs Act 1901, addresses the need for tariff concessions for specific goods that are not produced in Australia, thus ensuring that importers are not subject to higher customs duties for goods that have no local substitutes. This legislative instrument facilitates the application process by which a lower rate of customs duty can be applied to particular goods, provided they meet the core criteria as stipulated in the Act. The instrument was introduced to streamline the process by which businesses can apply for tariff concessions, thereby ensuring they are not disadvantaged due to the lack of local production of certain goods.
The Tariff Concession Instrument No. 0620096 was made by the Chief Executive Officer of Customs, who is mandated under section 269F of the Customs Act 1901 to process applications for tariff concessions. The objective of this particular instrument was to provide tariff relief for certain bottling lines, as requested by Progressive Group Australia, by applying a zero duty rate instead of the general rate of 5%. The instrument came into effect on 28 December 2006, the date the application was lodged, and does not affect the rights of persons or impose any liabilities on anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901, under Part XVA, governs the creation of Tariff Concession Orders (TCOs) which are administered by the Chief Executive Officer of Customs. This legislation applies to individuals and entities that apply for tariff concessions for specific goods, ensuring these goods are not produced in Australia in the ordinary course of business, and are not the types of goods listed in section 269SJ that cannot be subject to a TCO. The Act operates on a national level and its provisions are enforced by the CEO of Customs, who must decide whether an application meets the core criteria for a TCO as outlined in sections 269C, 269B, and 269D of the Act. The TCO No. 0620096, made on 16 March 2007, is a specific instance where a tariff concession was granted to Progressive Group Australia for certain bottling lines, reducing the duty rate from 5% to free. This concession came into effect on 28 December 2006, the date the application was lodged. The TCO does not impose any liabilities on individuals or entities and does not affect existing rights, but it does provide benefits to importers who can now apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) under which Tariff Concession Orders (TCOs) can be made, is governed by Part XVA. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (the CEO) for a TCO on goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these core criteria, a TCO must be issued under section 269P(3), specifying the applicable rate of duty.
The obligations imposed by the Act on the parties involved are detailed in section 269K(1), which requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes there are reasons why the TCO should not be made, to lodge a submission with the CEO. The CEO is also required to consider any submissions received in response to this notice. In the case of TCO No. 0620096, no submissions were received.
Breaching the provisions of the Act can lead to civil or criminal consequences. Although the explanatory statement does not specify penalties for breach, section 271 of the Customs Act 1901 generally outlines penalties for breaches of the Act, which can include fines up to $22,200 for individuals and $111,000 for bodies corporate, depending on the severity of the offence. Additionally, section 271A of the Act provides for imprisonment as a penalty for certain offences. The Act also includes provisions for the confiscation of goods and the recovery of duty.