EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706102
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.
National Resources Pty Ltd applied for a TCO in respect of certain coiled aluminium foil on 26 April 2007.
Instrument
TCO No 0706102 was made on 13 July 2007. It declares that those certain coiled aluminium foils 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. 0706102 is taken to have come into force on 26 April 2007.
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, established a framework for the application and administration of customs duties and tariffs in Australia. The Act provides for the creation of Tariff Concession Orders (TCOs) under Part XVA, which offer reduced customs duties on specific goods, provided certain criteria are met. The 2007 Tariff Concession Instrument No. 0706102 was introduced to address a particular application by National Resources Pty Ltd for tariff concessions on certain coiled aluminium foil. The instrument was made to ensure that the application complied with the core criteria outlined in the Act, specifically that no substitutable goods were produced in Australia, thereby justifying the tariff concession. The instrument was made to benefit the rights of importers, allowing them to apply for refunds of duty paid on imports of these goods since the TCO was deemed to have come into force on the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism allows for the application of lower customs duty rates on certain goods, subject to specific criteria outlined in the Act. To be eligible for a TCO, an applicant must demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The Act defines terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' to clarify the application process. The CEO must make a written order if satisfied that the application meets the core criteria and there are no substitutable goods produced domestically. This order effectively reduces the duty rate on the specified goods, as evidenced by Tariff Concession Instrument No. 0706102, which applies a zero duty rate on certain coiled aluminium foils, reducing the general rate from 5% to free. The TCO does not retroactively affect any existing rights or impose liabilities for actions taken before its registration, although it does allow importers to apply for duty refunds for goods imported since the TCO's effective date. The Act's provisions extend to the Commonwealth and any applicable territories, with the CEO being the primary authority responsible for the issuance and oversight of TCOs.
Key Provisions
The Tariff Concession Instrument No. 0706102, under the Customs Act 1901, introduces a tariff concession order (TCO) concerning specific coiled aluminium foils. Pursuant to section 269F, National Resources Pty Ltd applied for this TCO on 26 April 2007, and it was made effective on the same date it was lodged (subsection 269S(1)). This TCO exempts the specified aluminium foils from the general customs duty rate of 5%, applying instead a duty-free rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995 (subsection 269P(3)).
The Act imposes certain obligations on applicants and the Chief Executive Officer of Customs (CEO). According to section 269C, the CEO must ensure that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D for 'goods produced in Australia' and section 269E for 'ordinary course of business'. If the CEO is satisfied that these conditions are met, they must issue a TCO (subsection 269K(1)). As soon as practicable after accepting a valid application, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties. In this case, no submissions were received, leading to the issuance of TCO No. 0706102 on 13 July 2007.
For breaches of the provisions under this Act, the consequences can vary. If an entity or individual fails to comply with the stipulations for applying for or issuing a TCO, they may face civil or criminal penalties. The Act does not explicitly state penalties for non-compliance, but breaches of customs regulations generally attract fines and, in severe cases, imprisonment. The specific penalties would depend on the nature and severity of the breach. Importers, however, stand to benefit from this TCO by applying for a refund of any duty paid on the goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).