EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700804
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 0700804 was made on 16 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. 0700804 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 Australian Parliament, provides for a system of Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs. These orders allow for reduced customs duty rates on certain goods. Tariff Concession Instrument No. 0700804, made under this Act, specifically addresses the concession of a 0% duty rate for certain aerosol cans, reducing the general rate of 5% that applies to such goods. This instrument was enacted to ensure that no substitutable goods were being produced in Australia at the time the application was lodged, thereby justifying the tariff concession. The aim is to facilitate the import of these specific goods without imposing any disadvantages or liabilities on importers or other persons.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs. This legislation applies to individuals and entities seeking tariff concessions for goods, ensuring that such applications are considered only if they meet the criteria outlined in the Act. A TCO can only be granted if the goods in question are not specified in section 269SJ, which excludes certain goods from eligibility, and if the core criteria are satisfied, primarily that no substitutable goods are produced in Australia at the time of application. The Act applies nationally, impacting all jurisdictions within Australia by regulating the tariff concessions for imported goods. The scope of the Act is further extended through subordinate instruments, such as the Customs Tariff Act 1995, which provides the specific duty rates applicable to goods subject to a TCO. The explanatory statement for Tariff Concession Instrument No. 0700804 exemplifies this, as it applies to certain aerosol cans, reducing their duty from 5% to 0%, effective from the date the application was lodged. This legislation ensures a streamlined process for tariff concessions while maintaining clear guidelines and exclusions to govern its application.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0700804 under the Customs Act 1901 include section 269F, which allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C sets out the core criteria for the CEO to consider in making a decision on the application, which includes ensuring that no substitutable goods are 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 criteria, section 269P(3) mandates that the CEO must issue a written order (TCO) declaring the goods subject to the application as those to which a specified item in Schedule 4 of the Customs Tariff Act 1995 applies. In this case, the CEO issued TCO No. 0700804 on 16 January 2007, declaring that certain aerosol cans are goods to which item 50 of Schedule 4 applies, with a duty rate of 0% instead of the general rate of 5%.
The Act imposes several obligations on the parties it governs. Firstly, any person can apply for a TCO under section 269F, provided the goods are not specified in section 269SJ of the Act. The CEO must then determine if the application meets the core criteria outlined in section 269C. Furthermore, as per section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO must also ensure that the TCO does not affect the rights of any person as at the date of registration, nor impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.
In terms of offences, penalties, or civil/criminal consequences for breach, the Customs Act 1901 does not explicitly state penalties for non-compliance with the provisions of a TCO. However, general provisions within the Act provide for penalties for breaches such as incorrect declarations, fraudulent activities, or failure to comply with customs regulations. The maximum penalties can include fines and imprisonment, depending on the severity of the offence. It is important to note that the TCO itself does not impose any liabilities on any person, ensuring that its implementation does not disadvantage anyone or create new liabilities retroactively.